When someone dies holding significant assets in their sole name such as land, bank accounts, Kiwisaver, and/or insurance policies each worth over $40,000.00, or shares and/or debentures worth over $15,000.00, a
grant of administration must be obtained from the High Court in order to deal with those assets (e.g. sell the land, close the bank accounts, claim on insurance policies, etc.)
There are two types of grant of administration:
- Probate; and
- Letters of Administration.
Probate
Probate is required when someone dies with a will and they hold assets in their sole name over the prescribed thresholds noted above.
Obtaining probate is the process of making an application to the High Court to have the deceased’s will proved and accepted as their last will. A ‘grant of probate’ is the Court order which evidences this.
By obtaining a grant of probate, the executor named in the will is confirmed and granted the authority by Court order to deal with the estate. The executor is responsible for bringing in the assets of the estate, paying the estate’s debts and testamentary expenses, and then distributing the estate to the beneficiaries in accordance with the law and the terms of the will. This is known as administering the estate.
In some cases, the executor may be required to hold estate assets on trust for beneficiaries, for example if there is a minor beneficiary or a life interest.
Letters of Administration
Letters of Administration is required when someone dies intestate (without a will) and they hold assets in their sole name over the prescribed thresholds. This type of grant of administration is often mistaken to be a literal “letter” – unfortunately this is not the case.
Obtaining Letters of Administration is very similar to obtaining probate. An application to the High Court must be made to have someone appointed as the administrator of the estate, who is granted the authority to deal with the estate, again by Court order.
Additional steps such as advertising for a will and requesting a Status of Children search through Births Deaths and Marriages must also be completed before filing the application.
As there is no will which appoints an executor, the Administration Act prescribes a ‘priority order’ for those who are entitled to apply to the High Court to be appointed the administrator of the deceased’s estate (the terms ‘administrator’ and ‘executor’ are often used interchangeably).
The ‘grant of Letters of Administration’ is the Court order which sets out who the High Court has appointed as administrator of the estate, which will be the person who made the application. The appointed administrator has the same powers and responsibilities as an executor regarding the estate: to bring in the assets, pay the estate debts and testamentary expenses, and distribute the estate.
As to distribution of an intestate estate, the Administration Act dictates who is entitled to the assets of the estate and what they are entitled to (in lieu of instructions in a will). This may not be what the deceased would wish which highlights the importance of having a will in place.
Letters of Administration with Will Annexed
A hybrid between probate and Letters of Administration, Letters of Administration with Will Annexed is required when someone dies with a will and they hold assets over the prescribed thresholds, but the will cannot be proven to the High Court. The circumstances in which a will cannot be proven include:
- The will does not appoint an executor.
- An executor is appointed under the will but the executor has:
- predeceased the will-maker;
- survived the will-maker but has since died themselves before obtaining a grant of administration;
- has renounced their right and title to probate of the will and there is no substitute executor appointed in the will;
- is the former spouse or civil union partner of the will-maker whose appointment is void under section 19 of the Wills Act 2007; or
- they are incapable of acting as an executor and they do not have a power of attorney in place.
If the above applies, the residuary beneficiaries named in the will have the first priority to apply to the High Court for appointment as administrator of the estate.
I think I need to obtain one of these grants. What should I do?
If you are an executor named in a will, or if a loved one has died without a will and you’d like to apply to be appointed the administrator of the estate, we strongly recommend you instruct a lawyer to assist you with this application.
Our estates team have extensive experience in preparing applications for probate and Letters of Administration and are happy to assist.
