1 Introduction

What is succession law?

1 _The law of succession is the system of rules that says who gets people’s property when they die.

In What property are interests adjusted?

2 At present, property (an estate) owned by a person who has died (a deceased) is distributed in different ways. This report recommends changes to rules that empower courts to adjust three ways in which property is distributed:

in accordance with the terms of the will, if the deceased was a will-maker (testator or testatrix);
in accordance with the intestacy provisions – Part III of the Administration Act 1969 – if the deceased left no will, or a will that does not dispose effectively of all of his or her property (the deceased died partly or wholly intestate);
in accordance with the rules that apply to non-probate transactions (eg, an entitlement as nominee of a savings account or superannuation benefit, or to some jointly-owned property) if the deceased owned property that when he or she died passed automatically to another or others outside a will or an intestacy.

Why and how are interests in property adjusted?

3 Under present law people may ask courts to adjust interests in property a deceased owns on death on three main grounds:

Matrimonial and de facto property – A husband, wife or de facto partner of a deceased may claim a share in the deceased’s estate (relying on the Matrimonial Property Act 1963, or the law of constructive trusts).
Family protection – Certain members of a deceased’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 contributed work or services to a deceased may claim a reasonable reward for the work or services, if the deceased fails to keep a promise, express or implied, to reward these contributors by will (relying on the Law Reform (Testamentary Promises) Act 1949, or the general law of contract or restitution).

Why is the present law in urgent need of review?

4 The present law needs review for four main reasons:

It is anomalous that two sets of rules determine property adjustments between spouses: one set applies if either spouse has died when adjustment is sought, but another (newer) set applies if adjustment is sought when both spouses are alive.
Despite valiant attempts by courts to resolve the problems, the absence of comparable provisions governing adjustment between persons who have been in quasi-connubial relationships causes unnecessary cost, uncertainty and delay.
Claims by adult children under the Family Protection Act 1955 are often made on the basis not of need but on the basis that the will-maker breached an undefined moral duty. This regime is indefensible because will-makers cannot determine and comply with its requirements in advance, and because it may disregard moral imperatives of the will-maker that are not shared by whichever judge is called upon to decide the claim. Will-makers, during their lifetimes, are required by law to provide economic support only to certain children under 19. Stepchildren for whom a will-maker has assumed, in an enduring way, the responsibilities of a parent, may not be able to claim financial support from a deceased person’s estate. Conversely, more distant relatives may (few actually do) claim financial support even though a will-maker during his or her lifetime had no similar duty to support those relatives.
The Law Reform (Testamentary Promises) Act 1949 provides an efficient but incomplete machinery for determining claims by people (including adult children) who contributed valuable benefits to a deceased. For example, although the Act deals with promises to reward benefits by will, promises to reward by other means are excluded. Since the Act was passed courts have expanded the general law that applies if people supply will-makers with benefits (eg, work or services) in the hope of reward. Lawyers will be familiar with claims based on constructive trusts and the law of restitution (legal duties imposed on those who have acquired a benefit at another’s expense). These similar claims should also be included in a refined statutory machinery.

5 The need for review is urgent. The existing law operates in a way that is less just, clear, consistent, and efficient than it can be. The newest statute our draft Act would replace was enacted in 1963 – since then values known and widely accepted in New Zealand communities have changed, but the existing law has not in all cases developed to reflect these changes. Around 27 000 people die each year in New Zealand, many leaving significant amounts of property. But the families, friends and communities who survive those who die can rely only on the deficient existing law.

What does this Report do?

6 The Commission recommends that Parliament replace and update the present law by enacting the draft Succession (Adjustment) Act contained in this report. In the rest of this report the Commission

describes how it arrived at its recommendations (paras 7–10),
explains why the changes it recommends are needed (chapter 2),
states and illustrates briefly the changes it recommends, outlining ways that the draft Act solves problems in the present law (chapter 3),
sets out the draft Act that would implement its recommendations together with a commentary explaining the detail of its provisions (see pages 35–170), and
acknowledges the individuals and groups who have contributed to the work in this report (see Acknowledgements).

How did the commission arrive at its recommendations?

7 In August 1996 the Commission published a detailed technical paper on adjusting interests in the property a person owns on death.¹ It was distributed to over 600 individuals and organisations. The 1996 discussion paper

considered the origins and development of the present law,
suggested criteria for good laws of succession,
discussed some objectives of the law of succession that seemed to the Commission questionable, and
identified issues and options for the reform of the present law.

The paper set out and invited comments on the Commission’s provisional conclusions, arrived at after extensive research and considerable preliminary consultation.² Complete draft provisions for a Testamentary Claims Act were included with a commentary on them, as were examples illustrating how the Commission’s proposals would work. With amendments, the draft Act in the discussion paper has in this report become the draft Succession (Adjustment) Act.

8 Everyone may be affected, more or less, by the law of succession. For this reason the views of the community on changes to the law of succession are crucial. In a brief plain-language booklet the Commission also set out for public consideration and comment the present law and its proposals and options for reform.³ Examples were included to illustrate how the Commission’s proposals would work. The booklet was distributed to interested individuals and groups in New Zealand communities, and to each of the MPs who represented New Zealanders in the 44th Parliament. There are over 1300 firms of barristers and solicitors in New Zealand – each was asked to consider the booklet and draw it to their clients’ attention.

9 These two publications emphasised that the Commission’s proposals were tentative, and welcomed critical comment and the expression of other options and views. Comment was sought especially from Mäori, from cultural and ethnic communities, and from people who considered that they were affected by views the Commission expressed on issues of family structure and gender.

10 Distribution and discussion ⁴ of the papers led to 176 requests for further information, and 87 written and telephoned submissions (see Acknowledgements). Submissions received from a group, like the submission from the National Council of Women/Te Kaunihera Wähine o Aotearoa, often expressed the views of the many members of the group. The submissions received were thoughtful and constructive. In its further work the Commission ensured that each submission was considered carefully and completely. The Commission repeats here its thanks to all those who contributed time and effort to comment on the proposals and options for change.

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