Probate Threshold Set to Rise: What You Need to Know
It has been announced that an overdue update to the probate threshold is finally on the horizon. Since 2009, if someone passes away with more than $15,000 in their sole name a formal grant of probate or Letters of Administration is generally required before the deceased’s assets can be accessed.
With inflation, higher KiwiSaver balances, and modern estate realities, the $15,000 figure no longer reflects the practical needs of many families, with even the most modest estates unlikely to come under this threshold. This has meant delays, extra costs, and procedural obstacles have become the norm for executors dealing with their loved one’s estate during an already difficult time.
A new threshold of $40,000 has been set forward, offering welcome relief for smaller estates. The date this change will take effect is still unknown but is expected to take some time to allow financial institutions the opportunity to update internal processes.
Once introduced, the probate threshold increase will allow estates with under $40,000 in sole-name assets (and no real estate) to be managed without the need for probate. This is particularly helpful for families where most assets were held in trust or where the deceased had modest personal holdings.
It's important to note that s77 of the Administration Act remains unchanged. Section 77 provides that when someone dies intestate (without a will), their surviving partner is automatically entitled to $155,000 of the deceased’s estate, plus one-third of the remaining estate.
Why the change matters
There were many submissions over time supporting the probate increase. These submissions highlighted the outdated nature of the current threshold, rising KiwiSaver balances, and the disproportionate cost and delay of probate for small estates. The $15,000 cap has led to unnecessary red tape and stress for many families, which the $40,000 aims to decrease.
Planning ahead with Godfreys Law
The new threshold will hopefully simplify matters for smaller estates by reducing legal costs and time delays. However, proper estate planning remains vital. A valid will ensures your personal circumstances such as your blended family, any gifts to non-family members, and your trust management are addressed the way you want them to be.
Our thorough and thoughtful Life Law team here at Godfreys can help you make your loved ones lives a little bit easier when you are gone, making sure all your bases are covered.
Even if your estate is under $40,000, a will provides clarity and peace of mind – not just for you, but for those you leave behind. Get in touch with Maddy, Kujal and Phillip today, and help us, help you.
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