NEW ZEALAND Trends and Developments Contributed by: Brent Wicks, Violet Yu, Jonathon Russell and Sandy Chen, Cone Marshall Limited
Cone Marshall Limited Floor 3/32 Mahuhu Crescent Auckland Central Auckland 1010 New Zealand Tel: +64 9307 3950 Email: info@conemarshall.com Web: www.conemarshall.com
Introduction New Zealand is currently refining existing legislative frameworks affecting private clients to better reflect contemporary societal values on estate planning and corporate governance. Many of these legislative frameworks were established decades ago, which may no longer align fully with modern expectations of society. Recent developments in case law are shap - ing trust and relationship property disputes, while the government is implementing reforms to enhance New Zealand’s accessibility for overseas investment. Succession Law The government is in the process of reviewing suc - cession law in New Zealand. Many of the statutes codifying the law of succession were enacted in the previous century; however, the needs and values of contemporary society can be vastly different. The New Zealand Law Commission has submitted a report recommending repealing a number of statutes including the Family Protection Act 1955, Family Pro - ceedings Act 1980 and some parts of the Adminis - tration Act 1969, as well as enacting a new Act – the Inheritance (Claims Against Estates) Act. Below are some examples of significant changes to succession law. Under the Family Protection Act 1955, families may argue that a deceased had a “moral duty” to provide maintenance and support and, if the deceased failed to do so, the court should order the estate be distrib - uted to provide the claimant with a justifiable amount. The wording of the current legislation was deemed not clear enough by modern legislative drafting stand -
ards. The imposition of a moral duty is also seemingly restrictive of the deceased’s testamentary freedom. The report provided the government with options to consider whether or not to restrict eligible claimants to only those who are under the age of 25 and those with disabilities. Current relationship property laws give the surviving spouse or partner of the deceased two options to choose between when claiming against the estate. The first option is that the surviving spouse or partner elects to receive their entitlement under the deceased’s will, or via the rules of intestacy under the Administra - tion Act 1969. The second option is to elect to divide and take the surviving spouse or partner’s portion of the relationship property. The recommended change is that the surviving spouse or partner will continue to be entitled to choose to receive the division of rela - tionship property, but will receive first the inheritance under the deceased’s will/intestacy rules and subse - quently receive the balance of the full value of their entitlement. Couples maintain the ability to contract out of the default relationship property provisions. The intestacy rules of how an intestate estate should be distributed under the Administration Act 1969 are deemed to be outdated and the Law Commission recommended these be rewritten with entitlements of families and beneficiaries having different proportions. The Law Commission recommended mechanisms allowing courts to recover property owned during the deceased’s lifetime but excluded from their estate, effectively clawing it back if it is proven the deceased transferred the property to defeat claims against the
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