INDEPENDENT NEWS

Govt Now Under Pressure To Raise Financial Threshold For Requiring High Court Paperwork To Release Funds To Loved Ones

Published: Mon 13 May 2024 09:09 PM
‘We recommend to the Government that an adjustment be made as soon as possible to the threshold for grants of administration that matches inflation since 2009,’ says Parliament’s Petitions Select Committee (7 May 2024).
This was in response to Kiwilaw’s petition last year that asked Parliament to allow financial institutions to release funds up to $25,000 without needing High Court paperwork.
The petition gained 515 signatures, with little effort, and was presented in August 2023.
Kiwilaw’s director, Cheryl Simes, is now urging the Government to action yesterday’s recommendation no later than 1 October this year. It requires a short, simple, regulation.
If enacted today, to match inflation to March 2024, the threshold would be about $22,000*.
The Select Committee also recommended ‘that a mechanism be established that would regularly adjust the threshold for inflation in future years’. No such mechanism currently exists.
The Select Committee agreed that none of this needs to wait for the outcome of the Law Commission’s general review of the law of succession. These recommendations stand alone.
Background
Currently, if a loved one has more than $15,000 in any one financial institution when they die, their executor or family must obtain High Court approval before the funds can be released. That approval is called ‘probate’ (if there is a valid will, with executors to do the work) or ‘letters of administration’ (if there is no valid will, or if there is a valid will but no executor).
Unless they made separate financial provision for their funeral expenses, that $15,000 includes the funeral costs, as well as any debts.
The $15,000 limit was set in 2009**.
Kiwilaw provides a cost-effective, nationwide, online alternative to other law firms, by preparing documents for people to submit on their own behalf to the High Court. Usually Kiwilaw’s fees are low enough that $1000 is more than enough to cover Kiwilaw’s fees, GST, and the $200 High Court fee. However, even Kiwilaw’s fees can exceed $1000 for complicated applications when there is no will. Most other law firms charge considerably more than that.
Links:
Select Committee report (7 May 2024)- https://selectcommittees.parliament.nz/v/SelectCommitteeReport/b3ca58d6-463b-4013-efc8-08dc6d5e2638
Submission by Kiwilaw (14 Dec 2023): https://www.parliament.nz/en/pb/sc/submissions-and-advice/document/54SCPETI_EVI_079a449c-4e2b-48d7-2ae8-08db3ebbf9f3_PETI288/kiwilaw-probate-and-estates-ltd
Submission by Ministry of Justice (4 March 2024) - https://www.parliament.nz/en/pb/sc/submissions-and-advice/document/54SCPETI_EVI_079a449c-4e2b-48d7-2ae8-08db3ebbf9f3_PETI579/ministry-of-justice-petition-of-kiwilaw-probate-estates
*Reserve Bank inflation calculator, accessed 7 May 2024.
**Administration (Prescribed Amounts) Regulations 2009 r 4.

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