The Government has responded to the Law Commission’s proposed changes for both relationship property and succession law, saying its work to update the laws will take years.
Under the Law Commission’s relationship property recommendations, it has called for a replacement to the Property (Relationship) Act 1976.
Some key changes to the Act include the family home not automatically being deemed relationship property, meaning it may not be divided equally between partners and spouses. Other recommendations include widening the Court’s power over trusts, enabling it to make orders over trust property in some circumstances.
The Commission also concluded that succession law—that deals with the way that a person’s property is distributed when they die—needs reform to be “simple, accessible and reflect New Zealanders’ reasonable expectations”.
Alongside a number of proposed key changes to achieve this, one option is that only those aged under 25 or disabled people would be able to make a claim against parents’ wills.
The Government’s plans to update the succession law comes after the Law Commission completed its review of New Zealand’s succession law in December 2021, following the review of relationship property laws which was released in July 2019.
Proposed key changes to the Property (Relationships) Act 1976 include:
That the family home will not automatically be deemed to be relationship property.
That the Court’s power over trusts is widened where Court can make orders over trust property in some circumstances. This is due to bringing in Section 182 of Family Proceedings Act.
Section 182 of the Family Proceedings Act which allows the court to revisit the terms of settlements (including trusts) and which are considered “nuptial” in nature would be revoked.
Introducing Family Income Sharing Arrangements (FISAs), where partners would share income for a specified period, taking into account the partners’ incomes before separation and the length of the partners’ relationship. This is replacing spousal maintenance.
The existing express aim to encourage a “clean break” will not be carried on; this would be one factor to consider, to be balanced with other factors, particularly the best interests of any child.
The main succession law recommendations include:
Family Protection claims–a new regime for making family protection claims has been proposed with two options for consideration by the Government. The first option is that all children and grandchildren could make a claim for family provision. The second is that only those aged under 25 or disabled would be able to make a claim.
Relationship property entitlements—create a regime where a surviving partner keeps any gifts in the will and then receives from the estate whatever further property is needed to ensure they receive the full value of their relationship property entitlement.
Testamentary Promises and other contribution claims—a testamentary promise cause of action should be available under a new Act, with other claims at common law or equity arising from contributions made towards a person who has since died continuing to operate outside the new Act.
Intestacy—fixed proportions rules regardless of the size of the estate, so that:
- where an intestate is survived by a partner, no descendants but one or more parent, the intestacy regime should provide that the partner takes the entire estate;
- where all the intestate’s children are of that relationship, a surviving partner of an intestate should take the whole of the estate; and
- where one or more of the intestate’s children are of another relationship, the intestate’s partner should take the family chattels and 50 per cent of the remaining estate, and the intestate’s children should share evenly in the remaining 50 per cent.
Wills – review the validation powers in section 14, including whether the High Court should have the power to validate audio or visual recordings as a will or other expression of testamentary wishes, permit the use of ōhākī, a type of oral will usually given and validated in the presence of the whānau, and repeal section 18, which revokes a will in its entirety when a person marries.
Until the above changes are enacted, the current law remains. We will provide further updates as any information is released. If you have any questions about relationship property or succession laws, please contact a member of our family and relationship team.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.