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Why you need a will

Nobody wants to think about dying, but how do you know your business and assets will be in safe hands should you no longer be around to care for it? That’s why it’s important to have a will, advises Martelli McKegg Associate Polina Kozlova

Dying without a will is far more expensive than paying a lawyer to have your will sorted. All that is required to administer an estate of a person who died leaving a will is to apply to a High Court for probate of the will. Dying without a will involves an application for intestacy, which is more complicated and costly than a probate application.


Intestacy involves a search for a will and, if the deceased is a male, also a paternity search. If a person dies leaving a spouse/partner, the surviving spouse/partner is required to obtain independent advice on his/her entitlement under intestacy provisions and potential claims against the estate under the Property (Relationships) Act 1976. Until such advice from an independent lawyer has been obtained, the application for letters of administration on intestacy cannot be submitted to the court. Obtaining such independent advice prior to lodging an application is not a requirement for a probate application (when a person dies leaving a will).

It takes at least three weeks longer to get the intestacy application ready to be sent to the court as opposed to a probate application. Time delays mean family members may not be able to access your assets for a significant period of time.

Unpredictability/surprise element

Many people assume their assets will automatically go to their partner/spouse. Instead, your partner/spouse will receive the first $155K (this amount is prescribed by the legislation and subject to change) + 1/3 of your estate and your children will receive 2/3.

This is particularly important for blended families. If your asset pool is modest, any children from a first relationship may be left with nothing. And, on the other hand, if your estate is large, your children may end up receiving more than your partner/spouse (which may not be what you intend).

If you die leaving no children or parents, your partner/spouse takes all of your estate. If you die leaving no children but leaving parents, your partner/spouse takes $155K + 2/3, with your parents receiving the remaining 1/3. This often comes as a surprise.

Cross border issues

Issues often arise with succession involving assets in different countries or assets located in one country and the deceased having lived and died in another country.

For example, if you live and die in Italy (and have acquired a habitual residence there) while most of your assets are in New Zealand, it is likely that all of your moveable assets (ie, bank accounts, shares, KiwiSaver etc) will be distributed under Italy's laws. Not only may this be very different from what you intended, it can also be very costly. An application for letters of administration to the New Zealand High Court will be required (since the assets are located in NZ) which is more complicated to begin with.

However, because a person died overseas and overseas law applies to moveable assets situated worldwide, the New Zealand court will require an affidavit from a lawyer practicing in the country where the deceased person died as well. This requires multiple lawyers from different jurisdictions to be involved and can quickly become very expensive.

This additional cost and stress for those you leave behind can easily be avoided by making a will in New Zealand before heading overseas.


If you have young children, it is really important that you nominate someone to be their guardian in the event that you and your partner/spouse die. If you don't do that, you have no certainty over who will look after your young children and be involved in important decisions relating to their upbringing.

Trusts and wills

A lot of people who have a trust believe that they don't need a will because their assets are owned by the trust. Although it is true that most valuable assets will be owned by the trust, some (inevitably) will still be in your name – for example, KiwiSaver, personal bank accounts, vehicles, jewellery, etc.

It is still important to have a will even if most of your assets are owned by a trust.

It is also important to remember and understand that assets owned via a trust do not form part of personal estate and to plan accordingly with respect to having sufficient funds in your personal estate to pay for funeral, leave sufficient funds available for immediate use by guardian of a minor child and so on.

Separation when married

If you are married and you have separated, your spouse stands to inherit your assets until the moment you have a marriage dissolution order (which takes two years to obtain). Should you die or your spouse die within that period (from the date of separation until the date the dissolution is granted) the survivor and/or the children (depending on the terms of the will if any or otherwise depending on intestacy provisions) will inherit the estate.

The only way to avoid this is to update your will (or make a will if you don't have one) as soon as you separate from your spouse.

Business implications

Succession and personal asset planning is often one of the last things business owners think about – usually, because they are too busy running their business. Unfortunately, the failure to properly plan for what would happen to your business in the event of your unexpected death can simply shift the burden to your business partners and your loved ones, leaving them to pick up the pieces.

If your business operates through a company, you will need to consider whether the business is likely to continue to operate after your death, or whether it is more likely to be wound down or sold. Also, it means you do not own the business assets, and so cannot deal with them in your will. Instead, you own the shares in the company, and must consider what should happen to the shares after your death.

If you are a sole trader, upon your death there is no distinction between your personal assets (like your home) and your business assets (for example, vehicles and tools). As a result, you can deal with your business assets in your will, just as you would deal with any other assets that you own.

To learn more about the importance of succession planning for business owners, revisit Emma Foster at Martelli McKegg’s prior article summarising some of the primary matters that you, as a small business owner, should consider when it comes to your will. It can be found under ‘Legal’ on

Polina Kozlova is an Associate who specialises in trusts, estates and relationship property (including separation and divorce) in the Auckland firm Martelli McKegg.

Her phone number is (09) 3007635 and e-mail

This article is not intended to be relied upon as legal advice.


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