Where there’s a will, there’s a way

Kiwisaver funds do not automatically pass to a surviving spouse or partner.

I have heard that it can be difficult for executors to withdraw the money from a Kiwisaver account when a member passes away. Why is this and is there any way I can make it easier?

It sounds like you already have a valid will in place, which is a very good start. In the event of your death your executors will usually sell your assets and distribute the proceeds to your beneficiaries.

As we get older, we can simplify our affairs, and this will make it easier for our executors when we pass away. This may include cashing up your Kiwisaver and other investments and transferring the proceeds into a bank account for easy access.

You should list your assets and leave clear instructions for your executors. This may be easier to achieve for those who die of old age or perhaps after a long illness, but less straightforward if the death is unexpected.

Kiwisaver providers are required to administer your estate in line with New Zealand law. Kiwisaver funds do not automatically pass to a surviving spouse or partner.

If you make a will you can specify who you would like to receive the proceeds of your estate, including the proceeds of your Kiwisaver account. It’s never too early to plan for this.

If the balance of the fund is over $15,000 then the executor(s) are required to apply for probate through the New Zealand High Court in the same way they are required to for any other investments or assets over $15,000.

In the event that the investment is $15,000 or less Kiwisaver providers may be able to accept an application under the Administration Act 1969, to make a payment to a person set out in that legislation (such as a spouse or de facto partner).

However, if the amount is over $15,000 this will require someone to make an application to the court to administer your estate, which without a will can be a difficult process for family members.

If someone dies without making a will, their assets including their Kiwisaver will be distributed according to Section 77 of the Administration Act 1969. This may not be what you would have intended, so every adult should have a current will.

You should also note that marriage will usually render a will invalid, while divorce or separation may not. This will often have unintended and distressing consequences for many families.

There are several options for drawing up a valid will, from professional trustee companies to DIY website tools which cost less than $100.

You can find a guide to wills on the Sorted website. Once you have a will, let your loved ones know where to find it.

You can also leave a list of your assets, and additional information that can help your executors.

Shelley Hanna is the communications manager with Peak Portfolio Management Ltd, a financial advice provider licensed by the Financial Markets Authority. Disclosure information is available at peak.net.nz or call 06 8703838. The information provided in this article is of a general nature and should not be relied on as a recommendation to invest in a financial product. Send your Kiwisaver questions to shelley. hanna@peak.net.nz