Challenges to your will after you die
Relationship property laws and how they can affect wills
How does the Property (Relationships) Act affect my property after I die?
The Property (Relationships) Act 1976 provides for your surviving spouse, civil union partner or de facto partner to choose whether to apply for a division of relationship property under the Act (see the chapter “Relationships and break-ups”) or to take what is left to them under your will, or, where there is no will, under the laws of intestacy (see the chapter “A death in the family”, under “Dealing with the deceased’s property”).
If your surviving spouse or partner makes a claim under the Act, this comes before any other person’s claim under inheritance law. This recognises that one spouse or partner should not be able to give away the other spouse’s or partner’s share of relationship property in their will.
If your surviving spouse or partner chooses to elect a division under the Act, then usually they will no longer be treated as a beneficiary under the will or under the laws of intestacy. In limited circumstances, the court may allow your surviving spouse or partner to take their share of relationship property as well as their inheritance. The court may do this in order to avoid injustice or if it is clear that you intended your surviving spouse or partner to take the gifts left in the will regardless.
How is my property divided under the Property (Relationships) Act?
The property division rules that apply on death under the Act are largely the same as those that apply on separation. If your relationship has lasted at least three years, the general rule is that your surviving spouse or partner will get a half share of the relationship property (see the chapter “Relationships and break-ups”).
However, there are two significant presumptions in favour of your surviving spouse or partner under the Act. It is presumed that, if there is no evidence to the contrary:
- all property owned by you at the time of your death is relationship property
- all property acquired by your estate is relationship property.
Some property will not be presumed relationship property. This includes:
- property that you dealt with in a contracting-out agreement (unless the agreement is set aside)
- property that you inherited or that was gifted to you in some way (including from a trust), unless that property has become intermingled with relationship property. It will therefore be up to your surviving spouse or partner to prove that the property is relationship property.
What is the procedure for choosing property division under the Property (Relationships) Act?
A surviving spouse or partner must make their choice by giving written notice in the correct way. This requires a signed certificate from a lawyer stating that the effect and implications of the surviving spouse or partner’s choice has been explained to them. The notice must then be delivered to the executor or administrator of the estate (see “Who’s who: Executors and other key people” in this chapter) or in the appropriate registry of the High Court, if administration of the estate has not been granted in New Zealand.
Once a choice has been made, it is not usually changed. However, the court can set aside a choice if it would be unjust to enforce it.
What is the time limit for making a choice?
A surviving spouse or partner must choose whether to make a claim under the Property (Relationships) Act or to inherit property under the deceased’s will or the laws of intestacy:
- within six months of the date of death, if the estate is small enough not to require a grant of probate or letters of administration, or
- within six months after a grant of probate or letters of administration, if the estate is larger.
Proceedings must be commenced within 12 months of the death of the deceased spouse or partner or the grant of administration, whichever is applicable.
If no choice has been made, or if the surviving spouse has chosen a division of relationship property but has not begun court proceedings within the time limit, the executors or administrators (see “Who’s who: Executors and other key people” in this chapter) may distribute the estate according to the will or the laws of intestacy, whichever is applicable.
Note: The court may extend the time limits, provided the estate has not been finally distributed, but the court will not undo any partial distribution that has been made before it received a notice of extension of time.