Many legal minds making NZ LAW work

We are an association of independent legal practices, proactively sharing ideas and expertise for the benefit of our clients.

Option A & B? That is the question

Published: 26th February 2018

Author: Greg Kelly, Greg Kelly Law Ltd

Published in: Trust e.Speaking | Issue 26

Entitlements under your spouse or partner’s will

When your spouse or partner dies you will need to make a very important decision between your entitlements under their will and potential claims against their estate. We discuss the implications of that decision, some of the issues that it raises and the consequences of the choice that you make.

In 2002 the law in New Zealand was changed so that when one of the spouses to a marriage or one of the partners in a de facto relationship of more than three years dies, the death for most purposes is treated the same as separation. Under the Matrimonial Property Act 1976, when a married couple separated the general rule was that their matrimonial property was split 50/50.

The changes to the law in 2002 extended this division to the situation where one of the spouses or de facto couples dies leaving a surviving spouse or partner. For practical purposes, death is treated the same as a separation under the Property (Relationships) Act 1976, known as the PRA.

Making a choice

There are specific provisions in part 8 of the PRA dealing with the division of relationship property on death. In essence, the surviving spouse has to make the following choice within six months of probate being granted:

  • Option A - which is to make an application to the court under the PRA for a division of relationship property, or
  • Option B - which is to elect not to make an application under the PRA for division of relationship property but to accept the provision made for them under their partner or spouse’s will and in any other way by the deceased.

Significantly, if Option A is chosen then the surviving spouse loses all gifts made to him or her in the deceased’s will. It needs to be remembered, however, that when applying to court for the division of the relationship property, as part of the court application, the surviving spouse can ask the court for an order that the gifts under the will be reinstated.

If the surviving spouse or partner does not make an election within six months of the date of probate being granted then he or she is deemed to have chosen Option B – that is accept what they receive under the will. This is, in effect, the default option.

The options

  1. If Colin and Diane are married (or in a de facto relationship of more than three years) and Colin dies leaving most or all of his estate to Diane, then Diane does not have to do anything in terms of electing Option A or B. In this situation Diane is better off taking what she receives under Colin’s will (Option B). If she does not choose one of the options, then six months after probate being granted she will be deemed to have chosen Option B anyway.
  2. On the other hand, if Colin’s will gives 50% or more of his estate to his children of his first marriage then Diane may very well be better off to get advice about choosing Option A. When she applies to the court under the PRA, she will ask the court to reinstate the provisions in Colin’s will for her.

A further important point to bear in mind is that quite separate from the division of relationship property, when a person dies he or she has duties to make provision for the maintenance and support of a surviving spouse or de facto partner. This is totally separate from a PRA claim and this obligation specifically applies to the deceased’s separate property.

Therefore in example (2) on page 2 Diane can claim one half of her and Colin’s relationship property by choosing Option A and, at the same time, she can also pursue a claim under the Family Protection Act 1955 for further provision for her maintenance and support from Colin’s estate. In determining the claim for maintenance and support the court will take into account what Diane has received under Colin’s will and/or what she will receive from a division of relationship property. The court will also take into account factors such as the length of their relationship, the competing claims and whether Colin has made provision for Diane through, for example, a family trust.

Deciding on A or B?

To make an informed decision about which option to choose, it’s very important that surviving spouses or partners obtain full details of the deceased’s assets, copies of all relevant documents and get prompt legal advice.

To make a valid and enforceable choice of Option A or B, it’s necessary for a document in a prescribed form to be signed and this document must be accompanied by a certificate signed by a lawyer who certifies that the effect and implications of the notice have been explained to the surviving spouse or partner. The document must then be lodged with the administrator of the estate.

Timeframe

Claims against estates are usually subject to specific time limits; not complying with these restrictions will often mean that legal rights disappear. For example, if Option A is not chosen in time and the estate has been fully and finally distributed, it may not be possible to belatedly pursue a PRA claim. Prompt advice is, therefore, essential.

 

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • Coromandel
  • Gisborne
  • Hawke's Bay
  • Kapiti Coast
  • Manawatu - Wanganui
  • Marlborough
  • Nelson
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

Daniel Overton & Goulding

We offer a wide range of legal services and advice to our clients who come to us with a number of different legal issues. In all instances we strive to get our clients the best advice and outcome. Come to our experienced and knowledgeable team about any legal issue and if we cannot find the answer we will be able to get you the right expert who will get you the right advice, and get you the best result. This is a vital part of our client care.

Region: Auckland

Phone: 09 6222 222

Sandford & Partners Lawyers

We are a medium sized Rotorua law firm practicing in areas of business and property law, public law and personal legal services.

We are professionals who listen, who seek to understand your needs, and give practical and usable advice. We thrive on the challenge of providing excellent legal work and aim to give you the highest level of service. For us, working for you means dealing with the little details as well as the big picture.

Region: Bay of Plenty

Phone: 07 348 6039

RSM Law

RSM Law is considered one of the most client focused law firms in South Canterbury. Established in 1883, the firm has played an integral part in the growth and development of South Canterbury, and beyond.

RSM Law's expertise covers all areas of the law, with particular emphasis on business law (including company law, small business and compliance); property law (rural and commercial property, and home buying and selling); litigation; resource management issues,(Carbon Accounting and Emissions Trading) estate planning, wills and trusts; infrastructure and syndication; and personal legal services.

Region: Canterbury

Phone: 03 687 9777

Purnell Lawyers

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Lawyers have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

Phone: 07 868 8680

Woodward Chrisp

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham and Jeff Allen.

Region: Gisborne

Phone: 06 869 0900

NZ LAW Limited

NZ LAW Limited is an association of independent legal practices with member firms located throughout New Zealand. There are currently 57 member firms practising in a wide range of legal disciplines ranging from business law, home buying and selling, immigration law and intellectual property to aviation law and viticulture.

The group was established in 1992 when about five law firms met in Auckland to find a way to benefit their clients by replicating the conviviality and the sharing of ideas and expertise that occurs in larger law firms, but still be able to retain client confidentiality and their own independence.

Region: Hawke's Bay

Phone: 06 835 5299

Breaden McCardle Lawyers

Breaden McCardle Lawyers is the largest full service legal practice in the Kapiti Region.

We are here to help you and pride ourselves on providing practical, solutions based advice to clients in an approachable and straightforward manner.

Region: Kapiti Coast

Phone: 04 296 1105

Horsley Christie

Horsley Christie is a successful law firm based in Whanganui which offers a diverse range of legal services to the Whanganui Region and beyond and has done for over 100 years.

When you deal with Horsley Christie you do so in the knowledge that the firm is one of many law practices nationwide who are members of NZ LAW.

Region: Manawatu - Wanganui

Phone: 06 349 0090

Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

Region: Nelson

Phone: 03 544 7888

Law North Limited

We pride ourselves on being a "general store" for most legal issues but also have several in-house experts in specialised areas including trusts, relationship property, business and property law.  No matter what your issue is - whether you are looking for trusted legal advisers to steer you through life, or you have a one-off problem to sort out - we would be pleased to help.

Law North Ltd provides a broad range of legal services across the Far North district from our base in Kerikeri.   We have operated in the area for over 100 years and have a long-standing history of providing legal services to a diverse client base, including businesses and private clients.   Our directors and their families have been part of the Bay of Islands community for several generations and remain committed to the area and its people.  We often call upon strong local knowledge to resolve issues for clients whilst remaining vigilant about client confidentiality.

Region: Northland

Phone: 09 407 7099

Wilkinson Rodgers Lawyers

Our specialists work together to provide clients with the full range of advice they need to achieve their desired results. If you're looking for specialist knowledge and advice, are a company or individual we can help you by making it easier for you to achieve your objectives.

Our area of expertise include, but not limited to;

  • Commercial
  • Community
  • Family Law
  • Home, Asset & Employment
  • Wills & Estates

Region: Otago

Phone: 03 477 9844

Cruickshank Pryde

We are proud to provide a full suite of legal services to the regions of Southland and Central Otago. With our offices, located in Invercargill, Gore and Queenstown, equipped with the latest modern technology, we can service wider New Zealand and international clients with ease. Our areas of expertise include commercial, rural, business, employment, family, criminal, property, resource management and estate planning law.

Region: Southland

Phone: 03 214 4069

Welsh McCarthy

Welsh McCarthy practises in Hawera, South Taranaki. Predominant industries in the South Taranaki district are dairy farming, oil and gas. The South Taranaki area also has the largest one-site multi product milk processing facility in the world

We deal with company and commercial transactions, commercial and family law, farm and residential sales and purchases, estate planning and family and charitable trusts. A large part of the firm also deals in the area of family law.

Region: Taranaki

Phone: 06 278 5039

David O'Neill

Region: Waikato

Phone: 07 839 1745

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

Phone: 06 370 0000

Gillespie Young Watson

We specialise in Property, Commercial and Trust Law. When it comes to law firm size we are bigger than smaller and smaller than big. By limiting the work we do to our specialist areas, we like to think we bring together the best of big firm skill sets with the personal care, attention and relationships of small firms.

We expect our clients to receive clear, practical and timely advice. We place a premium on accessibility and convenience to our clients. We value and appreciate all of our clients and want to do the best possible job for each of them. When we close a file we want the client to feel they have received exceptional advice, service and value.

Region: Wellington

Phone: 04 569 3997

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

All the information published on this website, or in any article herein is true and accurate to the best of the authors' knowledge. Information on this site should not be a substitute for legal advice. No liability is assumed by NZ LAW Limited, or individual NZ LAW member firms for losses suffered by any person or organisation relying directly or indirectly on information published on this site. Views expressed in any article are the views of the authors individually and do not necessarily reflect the view of NZ LAW or their member firms. Information appearing on this site may only be reproduced with prior approval from NZ LAW Limited Head Office, and credit being given to the source. © NZ LAW Limited