A.         You are right – if a person dies with $15,000 or more in any one bank, insurance or superannuation fund then an application must be made to the High Court for a Grant of Probate if they leave a Will, or Letters of Administration if there is no Will. 

One way round this is to arrange your individually owned assets so that there is less than $15,000 in any one bank or fund. A couple (or other family members) can also opt to hold assets jointly, as you have done, so that the money or property can pass directly to the surviving account holder. 

But as you point out, KiwiSaver is not so easy to deal with as it can only be owned by one person. It is entirely possible that a person could pass away leaving an account worth $16,000 and their surviving spouse or family member would spend $2000 or more applying for Probate just to release those funds. 

Once a person is over 65 (as long as they have been a member for 5 years) they can apply to withdraw their KiwiSaver funds. If they are not in good health they could look at making sufficient withdrawals to bring the balance below $15,000 or closing the account altogether and moving the funds into a joint account, if they want their spouse or next of kin to be spared the cost of Probate.

Alternatively, if someone under the age of 65 has an illness, injury or disability that either permanently affects their ability to work or poses a risk of death they can apply to withdraw all their KiwiSaver funds under the Serious Illness provisions. They will need to provide full details of the illness, injury or disability and why this poses a ‘serious and imminent risk of death’ or has resulted in them being unable to work. Their doctor has to complete a confidential ‘Declaration of Serious Illness’ within the application and attach any relevant supporting information relating to the person’s health condition. If successful all funds can be withdrawn including the ‘kickstart’ and Member Tax Credits. 

Someone in this situation would be wise to consult a lawyer to make sure that they have everything in place for their change in circumstances. Their lawyer should discuss their options regarding their KiwiSaver and other assets. 

If a deceased person’s KiwiSaver account is worth less than $15,000 and Probate is not applied for, the next of kin can apply to withdraw the funds. They need to provide proof of death and evidence of their relationship. Acceptable relationships include wife, husband, civil union partner, de facto partner, child, or person who has custody and control of the children of the deceased who are minors. There is a risk that more than one person could apply for the KiwiSaver funds. The applicants have to swear under oath that they are entitled to make the claim, but there could be differences of opinion among family members and the fund manager is likely to pay out on a ‘first come first served’ basis if the application is correctly completed. 

There may be some situations where Probate is the best option and worth the cost. 

Hawkes Bay Today 12.5.2015