A Guide to Deceased Estates

What a deceased estate is

A deceased estate is everything a person owned at the time of their death — property, money, bank accounts, shares, vehicles, personal possessions, and also their debts and other obligations. An estate is not a person in its own right, so someone must be given the authority to deal with it, collect what is owed to it, pay what it owes, and pass what remains to the people entitled to it.

Who administers the estate

If the person left a valid will, their executor carries out the administration — the person they chose to do this job. If there is no valid will, or no executor is able to act, a family member (or another suitable person) can apply to become the administrator. The administrator has broadly similar duties to an executor. Our guides on choosing an executor and executor duties and powers explain the role in more detail.

The first steps after someone dies

In the early days, the practical priorities are usually to:

• find the original will and any related documents;
• register the death, if that has not been done;
• notify banks, insurers, employers and other relevant organisations;
• secure property and keep it safe — pets, homes, vehicles and valuables included;
• check for pre-paid funeral plans or funeral wishes; and
• keep receipts and records of everything spent or done on behalf of the estate.

Avoid paying out money or distributing belongings in the first weeks. Debts and claims against the estate need to be understood first, and rushing can create problems.

Probate and letters of administration

Before most organisations will deal with the estate — closing a bank account, transferring property or selling shares — they want to see formal authority. For a person named in a valid will, that authority is a grant of probate from the High Court. When there is no will, the administrator instead receives letters of administration.

Applying involves lodging the original will (where there is one) with supporting documents and paying a fee. The process usually takes several weeks or months. Some small or simple assets can be dealt with without probate, but it is important to check what each organisation requires.

Debts must be paid before distribution

An estate’s debts are paid from the estate before beneficiaries receive anything. Common obligations include funeral costs, unpaid taxes, loans, credit cards, rates, utilities and mortgages. The person administering the estate is responsible for making sure valid debts are paid — and can be personally liable if they distribute assets to beneficiaries while leaving creditors unpaid.

Distribution

Once debts and expenses are settled and the estate’s value is clear, the remaining estate is distributed according to the will. If there is no valid will, the Administration Act 1969 sets out who inherits and in what shares — a partner and children first, then wider family. Our guide on whether you need a will covers those intestacy rules in more detail.

Gifts to charities or organisations need the correct full legal names, and gifts of specific items should be matched carefully to what the will says. Everything distributed should be recorded, because executors and administrators may need to account for what they did.

Common complications

Estates become more complicated when any of the following arise:

• claims under the Family Protection Act 1955, the Property (Relationships) Act 1976 or the Law Reform (Testamentary Promises) Act 1949;
• disagreements or disputes between family members;
• a missing will, a later will, or questions about which will is valid;
• overseas assets or beneficiaries living overseas;
• a business, company or farm;
• a family trust;
• Māori land or succession interests;
• significant debts, insolvency or tax issues; or
• questions about capacity or undue influence at the time the will was made.

When to get professional help

You can administer a straightforward estate yourself in New Zealand, but professional help is usually worth it when the estate is anything but simple — especially if there are disputes, claims, a business, trusts, overseas assets, Māori land or significant tax. A lawyer or accountant experienced in estates can guide you through probate, debts, tax and distribution, and their reasonable fees are generally paid from the estate.

The bottom line

A deceased estate is simply the person’s assets and debts after death, and someone must administer it before anything can be distributed. The process works best when the will is found early, debts are handled before gifts, authority is obtained in the right order, and records are kept throughout. When in doubt, ask for professional help — it is usually an estate expense and can save far more than it costs.