Big news in the world of probate! For the first time in some decades, the government is raising the prescribed amounts that govern whether an estate can be administered without applying for probate or letters of administration.
This monetary threshold is important mainly because organisations who are holding or in charge of administering assets such as banks, insurance companies, share registries etc will not allow anyone to deal with an asset if it is above that threshold in value unless that person has probate or letters of administration granted to them.
The current situation
As many of our clients are estates from overseas, they often only have a smaller asset in New Zealand with the bulk of their assets in other countries and a significant number of them find themselves in the unenviable situation of having a New Zealand bank account with just over the prescribed amount of NZD $15,000 in it.
This means that the bank will insist on an application for probate in order to access those funds. When the estate is from a Commonwealth Country, an application for reseal of the probate they already have can make things a bit simpler, but even when that is possible or even when the application for probate is a simple one, it still adds time and cost to access what is, nowadays, a reasonably small amount of money in the grand scheme of things.
If the application is for letters of administration or is a complex probate, as probates for estates based outside New Zealand often are, the situation can become very frustrating.
The changes
The current prescribed amount is NZD $15,000 and it applies to all assets.
Starting on 24 September 2025, the new prescribed amount will be NZD $40,000 and it will apply to all assets except:
government stock issued under Part 6 of the Public Finance Act 1989;
local authorities stock issued under:
Part 3 of the Local Authorities Loans Act 1956;
by a local authority within the meaning of the Local Government Act 2002;
before the commencement of section 2 of the Local Government Act 2002, by a local authority within the meaning of the Local Government Act 1974; or
stocks or debentures issued by a New Zealand company under the meaning in the Companies Act 1993.
For those assets to which the new prescribed amount does not apply, their prescribed amount remains at NZD $15,000.
The legislation
The legislation involved is sections 64, 64A and 65 of the Administration Act 1969 and it is being amended by an amendment to the Administration (Prescribed Amounts) Regulations 2009.
In Australia, which is in many ways a comparable jurisdiction, the similar monetary threshold has been AUS $50,000 for many years.
The results
This will mean many estates who would otherwise be needing probate can now administer their smaller assets without it and the reduction of burden on everyone is very welcome.
The death of a loved one or close associate is a hard enough time for people without the paperwork being unnecessarily overwhelming as well. Bringing these standards more in tune with the current financial realities will improve the situation in that respect considerably.
We have known asset holders to insist on probate even when an asset is under the threshold based on their knowledge that the estate has other assets elsewhere which all together bring the estate to a total above the threshold, so the application of that view will remain to be seen under the new conditions.
All in all, this long overdue change will be helpful and this author can say without the slightest hint of sarcasm that it is a delightful treat to see something change in the world of probate. Much as I love the world of probate for exactly what it is, it is not a fast-paced place at the best of times so a change is a novelty.