New Zealand’s estate administration rules have recently been updated, making it easier in some situations for families to wind up a loved one’s affairs without applying for probate. These changes aim to reduce unnecessary time and cost for smaller or straightforward estates, while keeping important safeguards in place for more complex matters.
WHAT HAS CHANGED?
The most notable reform is the increase of the threshold from $15,000 to $40,000. This threshold determines when banks, KiwiSaver providers and other financial institutions may release funds held in the deceased’s sole name without requiring a formal grant of probate or letters of administration.
The new threshold reflects the growth in common account balances over time and means that a meaningful number of smaller estates can now be administered informally.
However, this threshold does not apply to all asset types. Real property (such as a house or land held solely by the deceased) will still require probate. Assets held jointly or held within a trust follow their own legal rules and are not treated under the $40,000 limit.
WHO CAN NOW USE INFORMAL ADMINISTRATION?
More families may now be able to rely on informal processes, particularly where:
- The deceased’s sole-name assets held with each individual institution are $40,000 or less
- The estate does not include a property held solely in the deceased’s name
- The will is clear and uncontested
- There are no disagreements among beneficiaries
- The estate consists mainly of balances such as bank accounts, KiwiSaver, unclaimed bill payments or prepaid funds
In these cases, an adult child, spouse or partner may be able to finalise the estate without applying to the High Court – although documentation proving identity and entitlement will still be needed.
PRACTICAL IMPLICATIONS FOR EXECUTORS AND FAMILIES
Faster Access to Funds
Where the threshold applies, some estates may be completed more quickly, providing families with earlier access to funds for funeral costs, bill payments or ongoing obligations.
Lower Costs
Avoiding the probate process can reduce court fees and, in some cases, the extent of legal assistance required – though professional guidance remains advisable.
Duties Still Apply
Even when probate is not required, the person administering the estate must still fulfil the same core responsibilities: collecting assets, paying debts, keeping clear records and distributing funds correctly.
Institution Policies Still Differ
The law sets the threshold, but each bank or provider may have its own policy. Some institutions will release funds readily under $40,000; others may request further documentation or still prefer probate in borderline situations.
Complex Estates Still Require Probate
Estates involving real property, trusts, overseas assets or multiple beneficiaries with competing interests will generally still need probate. In many cases, probate remains the safest option to protect executors and ensure the estate is administered correctly.
UPDATING YOUR WILL AND ESTATE PLANNING
The increased threshold is a useful reminder to review your estate planning. We recommend ensuring that:
Your will is up to date and clearly appoints your executor;
Your KiwiSaver, insurance and investment beneficiary nominations are current;
Your financial information is organised so your executor can locate assets easily;
Your executor knows where you keep important documents.
Good planning helps your family manage your estate more smoothly – whether probate is required or not.
IMPORTANT: HOW THE $40,000 THRESHOLD WORKS
Per Institution, Not Per Estate
The $40,000 limit applies to each bank or provider individually, not to the total value of all assets in the estate.
Example:
$18,000 at Bank A
$15,000 at Bank B
$12,000 in KiwiSaver
All may be eligible for informal release, because each balance is under $40,000.
But: If the deceased held $42,000 with a single bank, that bank will likely require probate, even if the overall estate is small.
NEED HELP OR UNSURE WHETHER PROBATE IS REQUIRED?
We can advise you on whether an estate qualifies for informal administration and help ensure the process is handled correctly and efficiently. If you are preparing your own estate plan, we can also help you structure your affairs so things are simpler for your family in the future.
Please contact us if you would like tailored advice or assistance with estate administration or will-making.
