A KiwiSaver scheme is your investment to a comfortable future. You may have already used the funds to purchase your first home or perhaps you are counting down the days until you can invest it into your retirement yacht. With KiwiSaver in its tenth year, the average fund is rapidly increasing, but what happens to the money if we unfortunately never get to enjoy the retirement we’ve been working towards?
Your KiwiSaver fund is an investment and not a joint asset like a house or savings in a bank account, so it will be paid to your estate when you die and distributed as requested in your will. If you haven’t created a will, accessing the funds can be a long and arduous process for your family and may cause tension between those claiming entitlement.
It is estimated that more than half of New Zealanders over the age of 18 do not have a will, that figure being significantly higher for the under 40’s. Thinking about death and the distribution of assets isn’t typically something we begin to think about until we reach a significant milestone like the purchase of a house, or reach a certain age, but as more and more young people are paying into a KiwiSaver scheme, their monetary assets have increased without owning property.
If you die without a will, your KiwiSaver funds will be subjected to the intestacy rules under the Administration Act 1969 which will determine how the funds will be paid out. There are exceptions if your account is less than $15,000. In this instance, your scheme can pay out the total to an authorised person without obtaining a letter of administration or probate. An authorised person may include a surviving spouse, children or carers of the surviving children. Only when there is an absence of a will, surviving relatives and authorised persons will the funds be turned over to the government.
If your account exceeds $15,000, the provider will need a letter of administration from the High Court before they can release it. This can be an expensive and time consuming process which can be distressing for the family. It also does not guarantee the distribution of assets as you may have wished.
Creating a will does not have to have to be put off until we reach retirement age. It can be done efficiently and inexpensively with an MBC Lawyer. Contact us today to ensure that your assets are being distributed how you intended once you have passed.