Dying without a will

New Zealand law sets out what happens when someone dies without a valid will. The estate is distributed under statutory intestacy rules, which allocate it in a fixed order among a surviving partner, children, parents and other relatives, in shares set by legislation. The specific amounts and proportions are prescribed and change from time to time, so anyone dealing with an intestate estate needs current advice rather than a remembered figure.

What is consistent is that the rules are blunt. They do not know that one child has already been helped with a house deposit, that a step-child was raised as your own, that a partner of eighteen months is not who you would have provided for, or that you had specific intentions about a family business. They apply a formula.

They are also slower. With a will, the named executor applies for probate. Without one, somebody has to apply to be appointed administrator, which takes longer, costs more, and can itself become a point of dispute in a family that does not agree.

• Nobody has authority to act until the court appoints an administrator, so bank accounts, KiwiSaver and estate-directed insurance proceeds all wait.
• The order of entitlement is fixed by statute, and the shares are prescribed rather than chosen.
• Step-children and unmarried partners in shorter relationships can be in a much weaker position than people assume.
• Guardianship arrangements for children are not addressed, because a will is where you would normally express your wishes about that.
• Claims against the estate — under family protection or relationship property law — are more likely, not less.
• The costs of sorting all of this out come out of the estate, reducing what anyone receives.

Why a nomination matters more when there is no will

A beneficiary nomination on a life policy operates on the policy, not on the estate. It is unaffected by the absence of a will. Where the rest of an estate is stuck waiting for letters of administration, a nominated payout can still be made to the person named — which may be the only money the household sees for months.

That is not an argument for skipping a will. It is an argument for making sure your nominations are current, because they are the one part of your affairs that will still function exactly as you intended if everything else is unresolved.

1. 1Make a will. It is inexpensive relative to what it prevents, and it is the only way to direct your estate.
2. 2Check every beneficiary nomination on every policy, and update the ones that are stale.
3. 3Make sure someone knows the policies exist and where the documents are.
4. 4Put an enduring power of attorney in place at the same time — it covers the situation where you are alive but unable to act.
5. 5Review all of it whenever your family circumstances change.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• That intestacy shares are prescribed by legislation and change — do not rely on a figure you remember.
• That someone has to apply to be administrator, and that this can itself become contentious.
• That step-children and shorter de facto relationships can be treated very differently from what families expect.
• That an estate-directed insurance payout waits for administration, while a nominated one does not.
• That costs of administering an intestate estate come out of what beneficiaries would have received.
• That a will and current nominations solve most of this cheaply, in advance.

Every New Zealand insurer writes life cover to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser will check nominations as a matter of routine, which is the part of your affairs that keeps working when the rest is unresolved.
• They can structure cover so a household has immediate money even where an estate is going to take months.
• They will tell you plainly to see a solicitor about a will rather than pretending insurance solves the problem.
• They keep a record of policies that whoever administers your estate can actually find.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.