Understanding Inheritance Rights When a Partner Moves In

When a person dies without a will, questions often arise about the distribution of their estate, particularly regarding property ownership. Recent inquiries highlight a scenario involving a father whose partner moved into his home, leading to concerns about inheritance rights for his children.

Justine Wood, a specialist trustee at Public Trust, provided clarity on this matter. In the case outlined, if the father passes away without a will, he is considered to have “died intestate.” This legal status triggers specific legislation that dictates how his estate will be divided. According to Wood, the partner may be entitled to a significant portion of the estate, including personal items like vehicles and furniture, the first $155,000 of the estate, and a third share of the remainder.

The distribution of assets will largely depend on whether the couple qualifies as being in a de facto relationship at the time of the father’s death. The Property (Relationships) Act defines a de facto relationship as a couple living together, both at least 18 years old, who are not married or in a civil union. Factors such as the length of the relationship, financial interdependence, and shared responsibilities are taken into account.

Wood emphasizes the importance of having a will to ease the administrative burden on surviving family members. “Administering an estate when there is no will can be costly and take longer,” she stated. A will provides clear instructions on how an individual wishes their estate to be managed after their passing, potentially preventing disputes among heirs.

In addition to a will, there are legal considerations that may affect the partner’s rights. Even with a valid will, the partner may still have rights under the Property (Relationships) Act. To ensure the property is left to the children, the father and his partner may need to sign a contracting out agreement.

Another question posed relates to the management of KiwiSaver funds post-retirement. When individuals reach retirement age, they often wonder about the benefits of withdrawing or retaining their savings. According to financial experts, there is no disadvantage to leaving funds in KiwiSaver after retirement if it aligns with the individual’s financial strategy.

It is advisable for retirees to seek guidance on their investment options. Depending on the total amount in their KiwiSaver, a diversified investment approach may be beneficial. This could involve maintaining some funds in conservative or cash investments for immediate needs, while allocating a portion to balanced or growth funds for long-term benefits. Growth funds, although they may experience fluctuations, typically offer higher returns, enhancing the longevity of retirement savings.

As the new podcast, “No Stupid Questions with Susan Edmunds“, prepares to launch next month, listeners are encouraged to submit their inquiries about financial matters. Questions can be sent in written form or as voice memos to [email protected], facilitating a community dialogue about important economic topics.

Understanding the complexities of inheritance law and retirement savings is essential in navigating financial futures effectively. Individuals are urged to consider their unique circumstances and seek professional advice to safeguard their assets and ensure their wishes are honored.