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1 Introduction

1 THE LAW OF SUCCESSION is a system of rules which says what must happen to people’s property when they die. The Law Commission’s Succession Project will review this system of rules as a whole. This is the first discussion paper issued on the law of succession. It deals with one central aspect: the law of testamentary claims.

2 The law of testamentary claims, and changes to it, will be controversial. The Commission has tried to resolve difficulties in the present law and to bring it more into line with the values and views of New Zealanders today. But it welcomes critical comment and the expression of other views.

What are testamentary claims?

3 Normally a dead person’s property (or “estate”) is handed on to the people named in the person’s will (or “testament”). But in some cases the will can be challenged in court. A court may order that those named in the will (“beneficiaries”) take the property in different proportions from those the will-maker intended. A court may even order that all or part of the estate go to someone not named in the will.

4 The present law allows three main kinds of testamentary claims:

• MATRIMONIAL AND DE FACTO PROPERTY – A husband, wife or de facto partner of the will-maker may claim a share in the will-maker’s estate (relying on the Matrimonial Property Act 1963, or the law of “constructive trusts”).
• FAMILY PROTECTION – Certain members of a will-maker’s family, such as a husband, wife, child (of any age), grandchild, or parent may claim “adequate provision” for their “proper maintenance and support” (relying on the Family Protection Act 1955).
• TESTAMENTARY PROMISES – People who have conferred benefits on a will-maker may have the will changed in their favour, if the will-maker promised to leave them something in the will (relying on the Law Reform (Testamentary Promises) Act 1949).

5 Usually these claims attack the provisions of a will. But claims can also be made where the dead person left no will, an invalid will, or a will which does not dispose of all their property. The person is then said to have died “intestate” or “partially intestate”. In these cases the provisions of the Administration Act 1969 Part III say who takes the benefit of all or part of the estate.

6 The intestacy provisions of the Administration Act offer a relatively simple and standardised distribution, which does not meet all potential claims. The Commission considers that intestate distribution, like wills, should continue to be open to challenge. For the sake of simplicity, however, this paper refers to challenges to wills, and not to intestacies. These references are meant to apply also to claims made against intestate estates.

The need for review

7 The law of testamentary claims is in urgent need of review. The law governing widows’ and widowers’ claims has frequently been criticised for not having kept up with the matrimonial property law which applies to spouses during their lifetime. Conversely, as regards adult children’s claims, courts apply the legislation very differently from the way they did when Parliament last endorsed it thirty or forty years ago. Yet here too the law often differs from that which applies during will-makers’ lifetimes. For example, no-one making a gift to one of their adult children is legally required to consider whether they are being fair to their other children. But when applying the Family Protection Act 1955, courts often question the fairness of wills as between two or more children.

8 The practice of the courts has been well-intended and in some ways beneficial. It has helped to prevent abuses of power in family relationships. Either partner of a couple, or a parent or children, can be in a position of power. But the policies which now lie behind the law are unclear. It frequently operates in an uncertain and unpredictable way.

9 The courts’ present powers are broad and discretionary. This might have been acceptable when people had a common (if gendered and monocultural) vision of the family. But we now accept that families are different and should not be treated all in the same way. They differ in their ethnic and cultural backgrounds (eg, Pacific Islands, Chinese, Indian). They differ in their structure (eg, second marriages, single-parent households). We now believe that the value systems of a prevailing culture or a particular type of family should not be applied indiscriminately to others who do not share that system (this issue is discussed further in chapter 2, paras 29–33).

10 The law also needs to be reviewed for technical reasons. This applies particularly to the law of testamentary promises. Since the Law Reform (Testamentary Promises) Act was passed in 1949, the courts have expanded the general law which applies if people provide will-makers with benefits (eg, work or services) in the hope of reward by will. Lawyers will be well aware of the growing number of legal claims based on constructive trusts (rights in property imposed by the courts) and the law of restitution (legal duties imposed on those who have acquired a benefit at another’s expense). These are new ways of establishing testamentary claims. The 1949 legislation has not kept up with these changes.

Testamentary claims and Mäori

11 Testamentary claims by Mäori families are of special concern. This is an area of intense interest for Mäori. Te Tiriti o Waitangi (the Treaty of Waitangi) confirms and guarantees to Mäori te tino rangatiratanga (unqualified exercise of chieftainship). The Crown must respect Mäori control over the inheritance of property. Laws affecting succession to Mäori property should recognise that the fundamental principles of tikanga (custom law) apply amongst Mäori people.¹

12 In recent years, courts have dealt with a number of claims involving tikanga Mäori.² Regrettably, these decisions raise questions about whether the courts can adequately find out and apply Mäori values. The Commission, with the assistance of consultants, is still exploring this aspect of its reference. It is consulting with Mäori at regional and national levels. What is said in this preliminary paper still needs to be brought into line with the advice the Commission receives through consulting with Mäori.

Nothing in this preliminary paper will apply to Mäori freehold land, Mäori incorporation shares, or trusts under Te Ture Whenua Mäori/Mäori Land Act 1993.³

Other taonga, such as cloaks, greenstone or property handed back as a result of Treaty of Waitangi claims, are under separate consideration by the Commission.

13 The Commission welcomes comment also from other ethnic and cultural groups and from people who consider they are disadvantaged by received views on gender and family structure.

What this paper does

14 In this paper we propose a new legislative scheme. We offer a view of the grounds on which testamentary claims ought to be brought, and of what the courts should try and achieve in making testamentary awards:

• For those who live with or who are dependent upon the will-maker, we propose extending and clarifying their right to claim. We also aim to remove unfair distinctions based on earlier, restricted views of family structure.
• For those who are not living with the will-maker in a close family relationship (eg, independent adult children), we raise the question whether their right to claim should be more limited and defined, or even taken away altogether. This would allow greater scope for the interplay of family relationships (and, incidentally, for the power relationships particular to families).

15 In chapter 2, we describe in more detail the policy reasoning on the basis of which we seek to justify our proposals. In chapter 3, we briefly summarise the proposed reforms and offer an example of how our legislation will work. We then look in detail at the rights proposed for each class of claimant:

• husbands and wives (chapter 4)
• de facto partners (chapter 5)
• children (chapter 6)
• adult children (chapter 7)
• other relatives (chapter 8)
• claims based on testamentary promises (chapter 9).

In chapter 10 we consider the consequences of our proposals in more detail. We are concerned here with such matters as family agreements, time limits and priorities amongst claimants.

16 Our specific proposals are highlighted in the text, and there is a set of draft statutory provisions, with commentary (para C1). Matters that the Commission particularly welcomes comment on are printed in bold type (see paras 13, 224, 268, 337 and 364). Appendices set out more detailed material, referred to in various parts of the text (eg, a statistical picture of New Zealand families now: Appendix A). A proposed scheme of priorities between all claims against estates is included in Appendix B. Appendix C discusses family relationships in State support and tax law; and we consider how our proposals affect State support for the elderly in Appendix D. After receiving submissions on the proposals in this paper, we will settle the terms of a Draft Testamentary Claims Act and recommend to the Government that it be passed into law.

17 One last comment. We have prepared a number of internal papers which look closely at the existing law, and also at a wide range of alternative possible rules. Some of this material is discussed in this paper, but much of the detail and a number of the alternatives are not. Those who wish to explore further the issues raised in this paper are welcome to copies of any of the internal documents listed in Appendix E.