Probate Threshold Increases to $40,000 – But Dying Without a Will Can Still Devastate Those Left Behind

A long-awaited change to estate law will take effect on 24 September 2025: the probate threshold will rise from $15,000 to $40,000, making it easier for families to access smaller estates without going to court.

This new threshold applies to non-land assets, and it reflects modern realities — especially the rise of KiwiSaver balances, which now commonly exceed $15,000.

But while this is good news for some families, it does nothing to protect those left behind when there is no will.

Summary of What’s Changing

Under the Administration (Prescribed Amounts) Amendment Regulations 2025:

• Probate or letters of administration will generally not be required for estates with non-land assets under $40,000.

• Banks, employers, and government agencies can release funds under that threshold directly to a surviving partner or relative, without court documents.

The existing sections 64, 64A and 65 of the Administration Act 1969 already support this streamlined approach:

✅ Section 65 – Payments up to $40,000 without administration

Allows banks, employers, ACC, Kāinga Ora, local authorities, some societies, superannuation funds, statutory trustee companies, and government agencies to pay up to $40,000 to a surviving partner, child, caregiver, or a person entitled to obtain administration of the estate without a grant of administration.

✅ Section 64 – Government and Local Authority Loan Stock

Allows transfer of government or council loan stock worth up to $40,000 without probate or administration.

✅ Section 64A – Shares and Debentures

Allows transfer of company shares or debentures (up to $40,000 value) without probate, if the directors are satisfied with the documentation provided.

The Hidden Trap: Dying Without a Will

These rules are helpful for small estates — but only apply if no court process has started, and they do not replace the need for a valid will.

If you die without a will, your estate is distributed according to section 77 of the Administration Act 1969 — a rigid formula that may completely disregard your wishes and the people closest to you.

💔 Real-Life Example: Daisy and Peter

Daisy had been in a committed de facto relationship with Peter for 15 years. Peter had two adult children from a previous relationship whom he hadn’t seen in over 20 years. He told Daisy many times that he wanted her to inherit everything — the home they shared, and his savings — but he never made a will.

When Peter passed away, his estate included:

• Their family home, worth $1 million

• KiwiSaver and savings, worth $400,000

Under section 77 of the Administration Act 1969, because Peter had no will, his estate was divided as follows:

• Daisy received his personal chattels

• Daisy received the first $40,000 of the remaining estate

• Daisy received one third of the rest

• Peter’s estranged children received two thirds of the rest

Even though Peter had cut ties with his children, the law recognised them — not Daisy — as the primary beneficiaries.

Daisy was devastated. To try to correct the injustice, she had to:

• Make a claim under the Property (Relationships) Act

• Seek provision under the Family Protection Act

• Claim for his promise to provide for her under the Law Reform (Testamentary Promises) Act

These claims require Daisy to engage lawyers, provide evidence, and endure months — or years — of uncertainty and expense. All during her time of grief. There is no guarantee that she will receive what Peter intended.

Why Having a Will is Absolutely Essential

A will is not just a formality — it’s your voice after death. It protects the people you care about, avoids legal disputes, and ensures your assets go where you want them to.

With a valid will:

✅ You control who inherits
✅ You choose your executor
✅ You reduce legal costs and delays
✅ You spare loved ones from added stress and grief

Without a will:

❌ You have no say over who inherits your estate
❌ The law decides who gets what — not you
❌ Those whom you don’t want to benefit may inherit
❌ Expensive court claims are often the only remedy

Final Thoughts

While raising the probate threshold to $40,000 is a welcome step for modest estates, it’s no substitute for proper estate planning. The most loving thing you can do for your family is to make a will while you still can.

At Ross Holmes Virtual Lawyers, we:

• Prepare clear, valid wills that record your wishes

• Assist with estate planning to ensure that your wishes are followed

• Assist with estate administration

📞 Contact us before it’s too late +64 4150099 extn 0
👉 www.rossholmeslawyers.com