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Estate Planning

Trusts can protect assets

Criminal Law, Estate, Estate Planning, Property Law, Trust Law, Wills & Estates
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But they cannot ring fence assets derived from fraud

On 26 March 2021, John Bracken was convicted of New Zealand’s largest GST fraud having fraudulently obtained $17,311,262.29 in GST refunds over a period of four years.

On 23 February 2026, the Commissioner of Police applied to the High Court for a profit forfeiture order over property in which Mr Bracken had an ‘interest.’ In other words, the Commissioner sought to recover assets unlawfully obtained from Mr Bracken’s criminal activities.

The most valuable assets acquired from Mr Bracken’s criminal activities, however, were held by the Bracken Family Trust and not himself personally.

Despite this, under the Criminal Proceeds (Recovery) Act 2009 (CPRA), the court determined that the trust must forfeit $13 million of its own assets in response to Mr Bracken’s offending as he had an ’interest’ in the trust property.

 

Criminals may not profit from their actions

For the court to make a profit forfeiture order, it had to be satisfied that Mr Bracken had ‘unlawfully benefited from significant criminal activity’ and that he had ’interests’ in property.

It was quite clear that Mr Bracken had unlawfully benefitted from a significant criminal activity, so the question turned to whether he had an ‘interest’ in the trust’s property.

Discretionary beneficiaries cannot usually be said to have an ‘interest’ in trust property, because the property is legally owned and controlled by the trustees, not the beneficiaries. Discretionary beneficiaries do not have a legal right to the trust’s property, only a hope that the trustees might decide to distribute something to them, or that they will receive what is left when the trust comes to an end.

The Bracken Family Trust was unusual though, because Mr & Mrs Bracken had reserved a lot of power to themselves: they were settlors, trustees, discretionary beneficiaries, final beneficiaries and, as ‘Principal Family Members’, had the power to remove beneficiaries, and appoint and remove trustees.

Moreover, under the CPRA, an ‘interest’ in relation to property is much broader than simply owning something. It includes not only a legal or equitable interest in property, but also a right, power or privilege connected with the property.

In addition, the court can treat having ‘effective control over property’ as an ‘interest in property.’ As a part of this analysis, the court can have regard to ‘any trust that has a relationship to the property.’

The court determined Mr Bracken had both:

  1. An ’interest’ in the trust property both because he was a final beneficiary of the trust and due to his powers as a ‘Principal Family Member,’ and
  2. Effective control over the trust property, which was also due to his powers as a ‘Principal Family Member’ and that he was a trustee.

After much complex legal argument, the profit forfeiture order was granted with a maximum recoverable amount of $16,019,231.16, around $13 million of this was trust-owned property. The trust could retain the family farm (valued at $3.780 million), as this would allow the innocent beneficiaries to continue to benefit from this generational family asset. All the other remaining trust property was to be forfeited.

 

Trusts cannot shield ill-gotten gains

This case shows that while well-drafted trusts remain valuable and legitimate estate planning tools, they cannot be used as a shield for assets that have been acquired through crime – particularly in cases where the perpetrator has retained so much power over the trust assets that such power is tantamount to property (or an ‘interest’).

The court’s decision was said to be a strict statutory interpretation exercise, and there are clearly legitimate policy (and societal) reasons behind the CPRA having such a strong stance. It remains to be seen, however, whether a case involving a trust over which a criminal has few or no powers would result in the same outcome.

This case shows an intriguing relationship between statutory intervention and orthodox trust principles – giving us much to ponder.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

Review of adult decision-making capacity law

Elder Law, Estate Planning, Family Law, Legal Guidance, Property Law, Wills & Estates
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Law Commission recommendations

The Law Commission recently reviewed the Protection of Personal and Property Rights Act 1988 (PPPR Act). This legislation governs how decisions are made for adults who lack capacity and can no longer make some decisions for themselves.

The PPPR Act applies widely; it includes adults who have declining capacity due to dementia, lack capacity due to intellectual disabilities or have a temporary loss of capacity (for example) due to injuries.

The Commission has made a number of recommendations for reform, particularly regarding property managers and welfare guardians who are appointed by the court to make decisions for people who cannot make decisions themselves.

 

Overall approach

The Commission recommends repealing the PPPR Act and replacing it with new legislation. The biggest shift is away from asking what is in a person’s ‘best interests’ (often considered paternalistic), and towards asking what the person’s own wishes, values and rights are, and how those can be respected.

Court-appointed decision-makers would be expected to support the person’s participation in decisions wherever possible; they would only step in to decide for them where genuinely necessary.

 

Changes to the roles of property managers and welfare guardians

The Commission also recommends renaming ‘property managers’ to ‘property representatives’ and ‘welfare guardians’ to ‘welfare representatives.’ The change reflects a shift in emphasis: these representatives would not simply make decisions they think are best, but would instead be required to represent the person’s wishes and values as far as possible.

Representatives would have clearer statutory duties. They would be required to act honestly, in good faith and with reasonable care, understand the person’s circumstances, support the person to participate in decisions, communicate in a way the person can understand, respect the person’s rights, and make decisions centered on the person’s wishes and values.

The scope of appointments might become more limited than they are currently. Representatives would only make decisions that the person lacks capacity to make and only where someone else genuinely needs to make those decisions. If a person retains capacity for some decisions, they would continue making those decisions themselves.

Property representatives would continue to have financial reporting obligations, and the existing financial limits on decisions they can make without court approval would be modified.

Welfare representatives could also be made subject to reporting requirements where appropriate. Representatives would also be expected to notify the court if significant changes occur that affect their suitability or the ongoing need for the appointment.

The court would have greater flexibility to tailor appointments. It could appoint multiple representatives, divide responsibilities, impose reporting obligations, require consultation between representatives and include safeguards where conflicts of interest exist.

Where a representative is also a spouse or partner, conflicts of interest would not prevent appointment, but specific conditions might be imposed from the outset to ensure conflicts of interest are handled appropriately.

 

Reasons for the proposed changes

Currently, many court-appointed representatives are family members with no legal training. The Law Commission found that the current duties are scattered between the PPPR Act and case law, making the roles difficult to understand. It recommends a single, clear list of statutory duties, and clearer obligations for representatives, so they are better equipped to understand their role and responsibilities.

The current law is also viewed as not sufficiently focussed on the person for whom decisions are being made. Property managers and welfare guardians are not always aware that they need to consider the person’s rights, wishes and values, rather than just making the decision they think is best.

 

Conclusion

Overall, the recommendations focus on encouraging people to participate in decisions which affect them and make as many decisions as they reasonably can make, but supporting them where needed. Where representatives are appointed, their role is to be as limited as possible and proportional to the lack of capacity in question.

If these changes become law, representatives will have clearer obligations, and will be accountable for respecting the rights, wishes and values of the person for whom they are making decisions.

The recommendations have not yet been considered by Parliament and may still evolve before any new laws are passed. It is, however, worth being aware that the roles and obligations of property managers and welfare guardians are likely to change in the coming years.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

When a DIY will goes wrong

Estate, Estate Planning, Legal Advice, Wills & Estates, Wills & Probate, Wills & Trusts
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Seemingly small mistake brings significant consequences

Most people would never expect a Do It Yourself will, bought from a stationery shop to end up before a High Court judge. Yet that is exactly what happened in Oga v Bourne,[1] a recent case that shows how a seemingly small mistake in a will can have significant consequences after the will-maker dies.

 

The DIY will

Joan Bourne completed a shop-bought DIY will kit in 2017 with the assistance of her daughter. Joan wanted her estate to be divided equally among seven of her eight surviving children. She deliberately excluded one son, who had previously indicated that he did not wish to inherit from her estate.

Like many people using a DIY will kit, Joan and her family encountered legal terminology they did not fully understand. They believed the ‘bequests and legacies’ section was where they should list the people who were to inherit the estate. They therefore wrote the names of the seven intended beneficiaries in that section; however, they left blank the section dealing with the ‘residue’ of the estate because they did not understand what it meant and it didn’t make sense to them to list everyone’s names twice.

Unfortunately, this seemingly minor mistake created a significant legal problem.

In legal terms, a ‘bequest’ usually refers to a specific gift, while the ‘residue’ is everything left in an estate after debts, funeral expenses, administration costs and any specific gifts have been dealt with. As Joan had listed only the beneficiaries’ names without specifying any gifts, and had left the residue clause blank, the will did not effectively dispose of her estate.

 

High Court application

After Joan died in 2022, her executors could not get probate of the will, so they had to apply to the High Court under the Wills Act 2007. They asked the court either to interpret the will or to correct it so that it reflected Joan’s true intentions.

Joan’s family members and the witnesses who were present when she signed the will all gave evidence that she intended her estate to be shared equally among seven of her eight children. Even the excluded son confirmed that he did not expect to inherit and supported the application.

The court found that simply interpreting the wording of the will would not solve the problem because putting the names in the wrong section made the clauses effectively meaningless. However, the court was satisfied from the evidence that Joan’s actual intentions were clear, and the will failed to give effect to them. Using its powers under the Wills Act 2007,[2] the court corrected the will by replacing the defective clauses with one directing that the residue of Joan’s estate be shared equally among the seven intended beneficiaries.

 

Why was this case unusual?

It is important to understand that the court does not have a general power to correct wills simply because a mistake has been made. Before correcting a will, the court must be satisfied that there was a clerical error, or that the will did not give effect to the will-maker’s instructions (where the will was prepared by someone else). In this case, the applicants argued that the will did not give effect to Joan’s instructions. The court may then correct the will to carry out the will-maker’s intentions. This requires reliable evidence of what they intended. In many cases, particularly where family members disagree or no one can clearly explain what the deceased intended, that evidence may not exist. In those circumstances, an incorrectly prepared will may not be capable of being fixed.

While in this case the outcome ultimately reflected Joan’s wishes, it came only after court proceedings, significant legal costs and considerable delay. More importantly, this result was unusual. The court was able to correct the will because there was compelling evidence of what Joan had intended. Multiple witnesses gave consistent accounts of Joan’s intentions, every interested family member agreed, and even the excluded son supported the application.

 

Lessons

The decision highlights several important lessons for anyone wanting to make a will. Legal documents often contain technical terms that have specific legal meanings, even though the words themselves may seem familiar. A misunderstanding of terms such as ‘bequest’ or ‘residue’ can have significant consequences.

While DIY will kits can produce legally valid wills, they rely on the person completing them to understand how the document works. A simple mistake may not become apparent until after the will-maker has died – when it is all too late.

This case also illustrates that what appears to be a saving at the outset can become a much greater expense later. While having a will professionally prepared involves an upfront cost, unclear drafting can result in litigation, delays in administering an estate and legal costs that far exceed the cost of obtaining legal advice.

More importantly, disputes over a will can place additional emotional strain on grieving families at a time when certainty and clarity are needed most.

For most people, making a will is one of the most important legal decisions they will ever make. While DIY will kits remain an accessible option for many people, Oga v Bourne is a timely reminder that preparing a will is not simply about filling in a form.

Spending a little more time – or obtaining professional advice where needed – may save your loved ones from costly litigation, unnecessary uncertainty and additional stress after you are gone.

 

[1] Oga v Bourne [2025] NZHC 3685.

[2] Section 31.

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeakingmay be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

‘Doomsday’ provisions in your will

Charitable Giving, Estate Planning, Family Law, Trusts, Wills & Estate Planning, Wills & Estates
0

You may recall the tragic story of English businessman, Richard Cousins, and his family, who all died together in a plane crash in Australia on New Year’s Eve 2017.

About a year before his death, Mr Cousins amended his will by adding ‘Doomsday’ provisions. The provisions stated that if he and his family died simultaneously, the majority of his large estate would pass to his elected charity, Oxfam. Due to Mr Cousins’ foresight, Oxfam received their largest donation ever at that time of £41 million.

 

What are Doomsday provisions?

Doomsday[1] provisions (also referred to as fail safe, common catastrophe or calamity clauses) are back-up provisions in a person’s will. They set out what happens to your estate should all your beneficiaries pass away before they are able to receive their share.

This is the situation commonly referred to as Doomsday.

 

Why have Doomsday provisions?

The purpose of Doomsday provisions is to ensure that your estate passes to someone or somewhere you intend.

If a Doomsday/catastrophic situation occurs, and your will has no Doomsday provisions, uncertainty arises. The gifts in your will may fail and your estate (or the parts affected) may be distributed as if you died without a will (intestate).

In this situation, the intestacy rules set out in the Administration Act 1969 will apply. These rules set out who is entitled to your estate, even though they may not be beneficiaries in your will. Where your spouse or partner, and children have all died, your estate passes to your wider relatives in a set order, which can include:

  • Grandchildren/great-grandchildren
  • Parents
  • Siblings
  • Grandparents
  • Aunts and uncles, or
  • Half-aunts and half-uncles.

 

Ultimately, if there are no living beneficiaries to receive your estate, parts or all of it may pass to the Crown.

The prospect of such an outcome can be troubling to many people, particularly in the midst of increasingly complex family dynamics. If you have no Doomsday provisions in your will and all your beneficiaries are dead, your estate could be subject to administrative delay and litigation between those making a claim. The costs of these delays may be taken from your estate.

Planning for a ‘Doomsday’ may feel a remote or upsetting scenario. However, it is important to consider whether to include Doomsday provisions in your will. For example, if your family all travel together or all your beneficiaries are older than you, your estate is at a greater risk of being distributed in a way that does not align with your wishes without a such a clause.

 

Key considerations

When considering Doomsday provisions, it is important to take legal advice. They should be drafted to work with your family circumstances, the relevant legislation, and any other estate planning documents you have.

There are various ways a person may try to dispute your Doomsday provisions, and we can advise on strategies to reduce that risk. The more we know about your family dynamics and lifestyle, the better we can provide appropriate options.

It is particularly important that you let us know about any contracts, trusts, agreements and other documents which do, or could, affect your estate.

 

Doomsday provisions and trusts

You should also consider whether a Doomsday provision is appropriate for your family trust.

Without Doomsday provisions, a problem arises if all the trust’s beneficiaries die, or if the trust reaches its vesting date with no beneficiaries left to receive trust property. However, some trust deeds do have default beneficiary provisions to address this situation. We can assist you with reviewing your trust deed to advise you on this.

 

Adding Doomsday provisions

Adding Doomsday provisions to your will (or trust) increases certainty that your wishes will be followed and your property will be distributed to a person, organisation or cause you have chosen.

You may wish to name your siblings, close friends, iwi, religious organisations or charities as final recipients.

A charitable organisation is often a good option because charities usually remain operating long-term. Further, it provides the opportunity to help a cause that is close to your heart. And, if a charity is reliant on donations and bequests (as are most charities in New Zealand), such a donation may be life-changing for those they help.

 

[1] Doomsday, originating from Old English, usually refers to the end of the world or a day of ultimate or catastrophic reckoning.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2026.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650 

Planning the Next Chapter: Navigating Retirement with Confidence

Enduring Powers of Attorney (EPA), Estate Planning, Retirement Planning, Senior Living, Succession Planning, Wills & Estates
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Waipa is becoming one of New Zealand’s most attractive retirement destinations, with new retirement villages reflecting a growing community preparing for the next chapter of life.

For Steve, this became personal when his grandmother started talking about leaving the family home she had lived in for over 40 years. It wasn’t just a house to her — it was where she raised her children, hosted countless Sunday dinners, and built a lifetime of memories. The idea of moving brought both practical questions and a deep sense of emotion for the whole family.

Steve noticed that while his grandmother was ready for a simpler lifestyle, she was unsure about what came next — whether to downsize, consider a retirement village, and whether her legal affairs were still in order.

Together, they discovered her Will hadn’t been reviewed in many years and no longer reflected changes in her family or her current wishes. It was a gentle reminder of how easily these documents can become out of date over time. They also spoke about Enduring Powers of Attorney, ensuring the right people could step in if needed, and the importance of carefully understanding retirement village agreements before making any decisions.

Taking the time to get everything in order gave Steve’s grandmother real peace of mind. It also reassured Steve and the rest of the family that her wishes were clear and would be respected.

With the right planning and legal guidance from the team at Edmonds Judd, what initially felt overwhelming became a clear, supported transition — allowing Steve’s grandmother to focus on enjoying her next chapter with confidence, comfort, and security.

 

Rachael Beattie

Trustee decision-making

Estate Planning, Trust Law, Trustee Duties, Wealth & Asset Planning, Wills & Succession
0

How much weight should settlors’ directions carry?

It is estimated that there are between 300,000 to 500,000 trusts in New Zealand, and it is often said that we have one of the highest numbers of trusts per capita in the world. Although the reasons for having a trust are not quite as compelling as they used to be, trusts remain a large part of the legal and asset planning landscape. Trusts arise in many contexts including property ownership, investments, relationship property, insolvency and estates – to name a few.

We explore some of the interplay between settlors and trustees of a trust, particularly in relation to directions given by the settlors to trustees. It is very common for settlors to provide a form of guidance to trustees as to how the trust should be administered. However, must trustees follow the settlor’s directions? Should they follow those directions? What effect, if any, do a settlor’s wishes have on the trustees’ administration of the trust?

 

Operation of a trust

It is useful to begin with a reminder of the core mechanics of a trust. When assets are settled on a trust, they are transferred from the ownership of the settlors to the trustees. The trustees manage those assets for the benefit of the trust beneficiaries, and in accordance with the purpose and terms of the trust.

A settlor can also act as a trustee, but trustees must exercise their powers independently and in accordance with their duties to the beneficiaries. This is often achieved by having an independent trustee. The role of an independent trustee is becoming increasingly important and a lack of separation between the settlors, trustees and beneficiaries may undermine the trust’s purpose and leave it vulnerable to challenge.

It is for this reason that a settlor may choose to give written directions to the trustees about how the trust’s assets should be managed, how various beneficiaries should be treated, how the assets should be distributed and when that distribution should happen.

These directions take various forms but are often referred to as a ‘letter of wishes’ or a ‘memorandum of guidance.’ They are typically separate from the trust deed and kept with the core documents of the trust. Settlors can update these documents over time and they are often referred to or repeated in the settlor’s will. It is common for these directions to take effect on the settlor’s death or incapacity.

 

Effect of settlor guidance in trustee decisions

Guidance of this sort is not legally binding on trustees, but it is still an important consideration. As discussed above, the role of a trustee is to administer the trust in the best interests of the beneficiaries. A trustee is not an agent – nor puppet – of the settlor.

Trustees must exercise their own independent judgement when making decisions about the administration of the trust. They must consider all relevant factors. A settlor’s expressed wishes are one such factor, provided those wishes are consistent with the purposes and terms of the trust.

There is some authority in case law to suggest that this guidance is a mandatory consideration for trustees,[1] but it is clear that – as a minimum – trustees should read and understand the document. The Court of Appeal stated in the Chambers case, ‘It is necessary for trustees to read and understand a memorandum of guidance to discern the settlor’s wishes, and then with those wishes in mind make an independent assessment of the appropriate course of action, taking into account not just the memoranda, but all relevant factors.’

 

Independent decision-making

Trustees should take particular care when exercising powers in a way that departs from the settlor’s expressed wishes, as these decisions are more likely to be challenged by beneficiaries.

Although trustees are not ordinarily required to give reasons for their decisions, if that reason is challenged, they may be required to show that their decision was properly reached. Where a beneficiary can convince a court that there is a genuine and substantial dispute about whether a decision was reasonably open to the trustees, the court may scrutinise the decision-making process.

In those circumstances, trustees will need to show that the decision was within their powers, was made for a proper purpose and was rational, that it took into account relevant considerations and ignored irrelevant ones, and that the decision was reasonably open to the trustees in the circumstances. This list is not exhaustive but illustrates that the exercise of trustee powers can be complex.

 

Other options for trustees

Where trustees propose to make a decision that departs significantly from the wishes of the settlor – or involves a particularly significant or ‘momentous’ decision regarding trust assets or beneficiaries – the trustees should consider applying to the High Court for a ‘blessing order.’ This type of application takes advantage of the High Court’s supervisory role in relation to trusts and asks the court to ensure that the trustees have properly formed their view and that the proposed decision is one that is reasonably open to them. If granted, the order can provide trustees with protection from later challenge.

Difficulties can arise where the settlor’s later wishes differ from the context and purpose for which the trust was originally established. Over time, a settlor’s intentions may evolve; guidance provided years after the establishment of the trust may sit uneasily with the trust’s original objectives. In such cases, trustees may conclude that the later expression of wishes carries less weight than the underlying purposes of the trust, given the trustees’ duty to administer the trust in accordance with those purposes.

If faced with this situation it would be worth discussing with us whether there are powers to vary the trust and to add/remove beneficiaries, and whether restructuring the trust through these means may achieve a more secure outcome.

While it is common for settlors to leave written guidance for trustees, such documents are not binding but instead form part of the broader context that trustees should consider when making decisions. Trustees must ultimately exercise their own independent judgement. They should neither follow a settlor’s wishes blindly nor disregard them entirely.

Where significant decisions are required and uncertainty exists, it would be prudent to take legal advice and consider all available options including whether to seek the guidance of the High Court through an application for a blessing order.

 

[1] Chambers v S R Hamilton Corporate Trustee Ltd [2017] NZCA 131.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650 

Considering Retirement Village Living

Estate Planning, Legal Guidance, Property Law, Retirement Planning, Succession Planning
0

A few years on from her decision to take out a reverse equity mortgage, and having enjoyed the benefits of releasing some of the capital tied up in her home, Karen is now feeling less confident about living on her own. Many of her old friends have moved away from her neighbourhood, and she is finding that she would like more support close at hand. She has decided to investigate moving into a retirement village.

This option offers several advantages. Karen would no longer need to worry about home maintenance, security, insurance, or rates. She would have ready access to assistance should she suffer a fall or other medical event. And if she feels like company, there would be plenty of like-minded people nearby.

However, Karen has been warned that there can be significant financial implications when selling a home and buying into a retirement village. To fully understand her position, she meets with her solicitor.

Her solicitor explains that most — though not all — retirement villages operate under Occupation Right Agreements (ORAs). Under an ORA, Karen would pay a capital sum in exchange for the right to live in her chosen unit. She would not own the land or building itself, and her right to occupy the unit would be subject to certain terms and conditions.

These conditions often include payment of a regular weekly fee for as long as the unit is occupied. There is also usually a deferred management fee (sometimes called an exit fee), which is deducted from the original capital sum when Karen leaves the village — whether that is because she chooses to move elsewhere or upon her death. In addition, there will be village rules governing what residents can and cannot do within their units and the wider village.

Karen’s solicitor takes the time to carefully explain the legal and financial implications, including how the move may affect the estate she intends to leave to her family. Once Karen fully understands her options, she is in a position to decide whether a move to a retirement village is the right step for her.

 

Mandy Rasmussen

Death, property and prenups

Estate Planning, Family Law, Property & Asset Protection, Property & Relationship Law, Wills & Succession
0

The Rimmer case has changed the rules – for the meantime

Many couples now sign agreements ‘contracting out’ of the Property (Relationships) Act 1976. These contracting out agreements are commonly known as ‘prenups.’

Even though some prenups contain clauses that say couples must review the agreement every five years, or when a significant event happens (such as the birth of a child), they are almost never reviewed.

 

Early relationship prenups

What usually happens is that at the start of their relationship, a couple decide to buy a house together. They want to protect their respective deposits. They may have children from prior relationships to whom they want to leave their ‘share.’ They buy a house as tenants in common and sign new wills. They also sign a prenup stating:

  • Their shares in the house are their respective separate property
  • They may give each other a right to occupy their share of the home for, say, two years after their death, and
  • They intend leaving their separate property to their respective children.

What typically happens next is that the prenup and the wills are put into the bottom drawer and forgotten about. The couple may get married (which automatically revokes their wills), and/or they sell their first house and buy a new property that better suits their needs.

They often buy the new house as joint tenants as, after a lengthy relationship, they want to ensure their spouse inherits the home and cannot get kicked out by their late spouse’s children. When they die, their property lawyer would give them the standard advice that property that is owned jointly passes automatically by survivorship and does not form part of your estate.

 

Dying

When one spouse dies, leaving a mix of property in their personal and joint names, what happened next used to look like this:

  1. Transmitting all jointly owned property (the house, the joint bank account, etc) into the sole name of the survivor
  2. Identifying any property in the deceased’s sole name, and
  3. If the deceased had a will, distributing in accordance with that, or If the deceased died without a will (intestate), distributing in accordance with the Administration Act.[1]

 

What happens now?

This long-standing estate administration process has recently been upended by the Rimmer decision in the Court of Appeal.[2] This decision made two statements that have changed the way lawyers think about prenups:

  1. It is the prenup (not the will, property law or the intestacy rules) that governs what part of the relationship property forms part of the deceased spouse or partner’s estate,[3] and
  2. A prenup will always be given effect to (unless successfully challenged) on the death of spouse or partner.[4]

This has now changed the process to:

  1. Finding out whether there is a prenup, and, if there is
  2. Dealing with all the property specified in the prenup as set out in the prenup
  3. If there is property NOT covered by the prenup, the survivor can either:– Apply for division of the relationship property that is not covered, or
    – Receive their gifts under the will if there is one, or under the intestacy rules if there is not.

 

How is this different?

The rules of property law ordinarily decide what falls into an estate following someone’s death. That is, if they own an asset in their sole name (such as an identifiable share in a home, or a bank account in their sole name), that will form part of their estate. However, if they own property jointly with someone else, that will pass automatically to the surviving owner(s).

In saying that ‘the division instead proceeds in accordance with the s 21 agreement,’ Rimmer appears to be suggesting that property owned solely in the name of the deceased could nevertheless be transferred to the survivor if it is defined in the prenup as relationship property (particularly if the prenup specifies how relationship property is to be divided in the event of death).

That is a huge departure from the current rules, which state that, when someone dies, their executors (if they have a will) or administrators (if they die without a will) have a strict duty to distribute their property either in terms of the will or the intestacy rules.

If their spouse or partner disagrees with those rules, they can elect to file an application in the Family Court; whatever the court then decides takes precedence over the will or intestacy rules. Rimmer seems to suggest that the executors/administrators can circumvent the rules!

 

What next?

Now as a result of Rimmer, the first thing we as lawyers need to do is find out if there is a prenup – even if it is 30 years old!

Instead of just working out what passed by survivorship (with everything else going to the estate), we now must establish how a potentially outdated prenup applies to the property owned by the deceased many years later.

The Court of Appeal decision in Rimmer, may not be the last word, as the Supreme Court has granted leave to appeal, so it may be that the rules change again.

For now, however, make sure if you have a prenup, that both your prenup and your will agree on what should happen to your property when you die.

If you think you have a prenup and you haven’t reviewed it in more than five years, now is the time to do so!

[1] Section 77 of the Administration Act 1969.

[2] Rimmer v Wilton [2025] NZCA 374.

[3] Para [40].

[4] Para [39].

 

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Copyright, NZ LAW Limited, 2026.     Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

 

Planning for Tomorrow: Keeping Family Fair and Secure

Estate Planning, Family Law, Legal Guidance, Life Planning, Trusts & Wills, Wills & Estates
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As life moved forward, Luke’s family grew. He now had two children, including Mildred, whom he had adopted. It became important to Luke that both Mildred and his other daughter, Isabelle, were treated equally in his estate planning, so he contacted his lawyer.

Luke updated his will to reflect the new addition to his family. He ensured that his adopted child would be provided for on the same terms as his biological child, leaving no room for uncertainty. At the same time, Luke recognised that several antique items he had inherited from his late mother held special meaning for Sally and should ultimately pass to her. His will therefore specifically gifts those items to his daughter, Isabelle.

Luke appointed his brother and sister as executors and trustees, giving them responsibility for administering the estate. He also provided that the remainder of his estate be held on trust and shared equally between his two children when they reach the age of 18.

Luke also took practical steps to ensure his affairs were in order. He kept a copy of his will, his insurance policies, and a list of his bank accounts together in a secure drawer and made sure his brother and sister knew exactly where to find these important documents if anything were to happen to him. He also ensured they were aware that the original will is held securely at the Edmonds Judd office.

With everything clearly documented and the right people appointed, Luke now has peace of mind knowing his children will be looked after and his wishes will be carried out.

Georgia Willard

Get in touch today, we’d love to talk.

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