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Separation, death and estates

Splitting assets after three years together, what happens to accounts when someone dies, and what an executor has to do.

26 situations worked through, 20 of them with the sums shown. Each one links to the guide that sets out the rules behind it, and that guide is where any rate or threshold is kept current.

The people in these situations are illustrations written to show how the rules land on somebody, not real customers and not case histories. The arithmetic is real and the rules are real; the names and the circumstances are made up to teach.

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Bank Accounts When Someone Dies

Meena keeps the joint accounts by survivorship

Ravi and Meena, a married couple, held a joint everyday account with $12,000 and a joint savings account with $48,000. Ravi dies. Meena wants to know what she can access.

Joint everyday account: $12,000 passes to Meena by survivorship
Joint savings account: $48,000 passes to Meena by survivorship

Meena keeps all $60,000, and no probate is needed for the joint accounts

The same calculation on its own, with others like it

Margaret's small solo balance is released without probate

Margaret dies leaving a valid will. Her only bank asset is a savings account in her sole name holding $18,000. Her executor wants to release it without going to the High Court.

Sole account balance: $18,000
Threshold from 24 September 2025: $40,000

$18,000 is under $40,000, so the bank can usually release it without a grant of probate

💡 Confirm the bank's own limit

Because each bank sets its own policy up to $40,000, the executor should still ask Margaret's bank what it needs for an $18,000 balance. Most will release it on the documents above, but the exact paperwork can vary.

The same calculation on its own, with others like it

David's larger account needs a grant of probate

David dies with a will naming his daughter as executor. He held $85,000 in a savings account in his sole name. His daughter asks the bank to release it.

Sole account balance: $85,000
Threshold from 24 September 2025: $40,000

$85,000 is above $40,000, so the bank requires a grant of probate before releasing the funds

⚠️ Probate takes time, so plan for it

Applying for probate can take several weeks, and the money is not available until it is granted. This is why the funeral can be paid from the account directly, and why holding an everyday account jointly can make the first weeks easier for a surviving partner.

The same calculation on its own, with others like it

Paying the funeral bill from a frozen account

Aroha's mother dies with $30,000 in a savings account in her sole name. The account is frozen, but the funeral director issues an invoice for $9,500 and Aroha does not want to pay it herself.

Account balance (frozen to normal withdrawals): $30,000
Funeral invoice paid by the bank directly to the funeral director: $9,500

Remaining balance held for the estate: $30,000 - $9,500 = $20,500

The same calculation on its own, with others like it

Being an Executor

Ted - a simple estate under the threshold

Ted died leaving one bank account of $28,000, some personal belongings, and no property. His daughter Sarah is the executor and sole beneficiary.

Largest single holding: $28,000, which is under the $40,000 threshold.
No land or house, so no grant is required for that reason.

Probate is generally not needed. The bank can release the $28,000 on sighting the death certificate, the will and its own forms.

The same calculation on its own, with others like it

Margaret - an estate that needs probate

Margaret died leaving a term deposit of $150,000 and a KiwiSaver balance of $60,000. Her son Daniel is the executor.

The bank holds $150,000, well over the $40,000 threshold.
The bank will not release the funds without a grant of probate.
Daniel applies to the High Court and pays the $275 filing fee.

After the grant, usually around six to eight weeks later, the bank and the KiwiSaver provider release the funds to the estate.

The same calculation on its own, with others like it

George - paying debts before distributing

George's estate is a house that sells for $650,000 plus $40,000 in savings, so $690,000 in total. He leaves the residue equally to his two children. His debts are a mortgage of $180,000, funeral costs of $9,000, unpaid rates and power of $2,500, a credit card of $4,500, and final income tax of $3,000.

Total assets: $650,000 + $40,000 = $690,000
Total to pay first: $180,000 + $9,000 + $2,500 + $4,500 + $3,000 = $199,000
Residue for beneficiaries: $690,000 - $199,000 = $491,000

Each of the two children receives: $491,000 ÷ 2 = $245,500

The same calculation on its own, with others like it

Rebecca - using Public Trust

Rebecca is named executor of her aunt's estate, which includes a rental property, a share portfolio and a small business interest. She works full time, lives in another city, and does not feel confident handling something this complex.

The estate is large and complex, with assets that need valuing and managing.
Rebecca engages Public Trust to administer the estate on her behalf.

Public Trust applies for probate, gathers the assets, pays the debts and tax, keeps the accounts and distributes to the beneficiaries. Its fees come from the estate, based on the work involved.

The same calculation on its own, with others like it

How Inheritance Works

Aroha dies without a will, leaving a partner and two children

Aroha dies intestate. The family home was owned jointly with her partner, so it passes to him by survivorship and is outside the estate. Her estate is made up of $305,000 held in her sole name (bank, investments and KiwiSaver) plus personal chattels (car, furniture and jewellery) worth $25,000.

Personal chattels to the partner: $25,000
Statutory legacy to the partner: $155,000
Remaining estate to split: $305,000 - $155,000 = $150,000

The same calculation on its own, with others like it

Manaia and the relationship property choice

Tama dies with a will that leaves his whole estate to his adult children from an earlier relationship, and nothing to his wife Manaia. The couple's relationship property totals $800,000. Of that pool, $500,000 sits in Tama's estate and $300,000 is in Manaia's name.

Manaia keeps her own $300,000
The will gives her nothing from the estate

Manaia ends up with $300,000

💡 Why the choice matters

Here Option A leaves Manaia $100,000 better off, so she would likely choose it, giving up any inheritance under the will (which was nothing anyway). She could also consider a Family Protection Act claim. The choice must be made within six months, so timing and advice are critical.

The same calculation on its own, with others like it

Sophie's small estate and the probate threshold

Sophie dies with a will. She owned no property. Her assets are KiwiSaver of $28,000 and a bank account of $9,000. Her executor wants to know whether probate is needed.

KiwiSaver: $28,000 (under $40,000)
Bank account: $9,000 (under $40,000)

Each holding is under the $40,000 threshold, so the provider and bank can usually release the funds without a grant

⚠️ Shares and bonds are different

If part of Sophie's savings had been company shares or government bonds, the old $15,000 threshold still applies to those, not $40,000. So a $20,000 shareholding would need a grant even though a $20,000 bank balance would not.

The same calculation on its own, with others like it

Rangi gifts assets before rest home care

Rangi is single and is moving into long term residential care. In the five years before his means assessment he gave away $250,000 to his children, hoping to qualify for the Residential Care Subsidy. Work and Income reviews the gifting.

Allowance within the gifting period: $8,500 a year
Over five years: $8,500 × 5 = $42,500 allowed
Gifted above the allowance: $250,000 - $42,500 = $207,500

$207,500 is added back into Rangi's assets for the means assessment

💡 Why late gifting rarely works

Because $207,500 is treated as though Rangi still owns it, the gifting does not push him under the asset threshold. Gifting to qualify for the subsidy is largely undone by the clawback, and it can create family disputes later. There is no gift duty to pay, but there is a real cost to gifting late in life.

The same calculation on its own, with others like it

The Three-Year Rule

Maia and Tane: a four-year de facto splitting the home

Maia and Tane lived together for four years, then separated. There is no agreement. Because the relationship lasted more than three years, the Act applies and relationship property is shared equally.

Family home equity: $350,000
Joint savings: $40,000
Vehicles and chattels: $30,000
KiwiSaver built during the relationship: $60,000
Total relationship property: $480,000

Each partner's equal share: $480,000 / 2 = $240,000

The same calculation on its own, with others like it

Priya and Sam: a two-year relationship with a child

Priya and Sam lived together for two years and have a baby. Under three years, the Act usually would not apply. But there is a child of the relationship, and Priya cut back her paid work to care for the baby while Sam kept earning and paying the mortgage, so not sharing the property would cause serious injustice.

Family home equity: $180,000
The Act can apply early because there is a child and serious injustice would otherwise result
For a short relationship, property is divided by each partner's contributions

Childcare counts equally with earning, so the court can reach a near-even division here

💡 The three-year clock is not absolute

A child of the relationship can bring the Act into play well before three years. The division follows contributions rather than an automatic 50/50, but because caregiving is valued equally with paid work, the outcome can still be close to even. The exact split depends on the facts, which is why advice matters.

The same calculation on its own, with others like it

Liam and Ana: a house owned before the relationship

Liam bought a house on his own before he met Ana. She moved in, it became the home they shared, and they were together for five years with no agreement. On separation, Liam assumes the house is his because he bought it. He is wrong.

Family home equity: $400,000
The family home is relationship property regardless of who bought it or when
Relationship over three years, so equal sharing applies

Ana's share of the home: $400,000 / 2 = $200,000

⚠️ Owning it first does not keep it yours

This is the outcome that catches people out. Because the house became the family home, Liam's earlier ownership does not shield it once the relationship passes three years. A section 21 agreement signed before Ana moved in could have kept the pre-relationship equity as Liam's separate property. Without one, it is shared.

The same calculation on its own, with others like it

Grace and Noah: protected by a section 21 agreement

Grace owned a mortgage-free home worth $600,000 and a small business before meeting Noah. Before moving in together, they signed a section 21 agreement. Each kept their own pre-relationship property, and they agreed to share only what they built together. Both had independent legal advice from their own lawyers, who certified the agreement. Five years later they separated.

Grace's home ($600,000) and business: kept as her separate property under the agreement
Jointly built savings during the relationship: $50,000

Shared property split equally: $50,000 / 2 = $25,000 each

The same calculation on its own, with others like it

When Your Partner Dies: Money Guide

Mere keeps the joint account by survivorship

Tom and Mere, a married couple, held a joint everyday account with $9,000 and a joint savings account with $46,000. Tom also had a savings account of $12,000 in his sole name. Tom dies, and Mere wants to know what she can still use.

Joint everyday account: $9,000 passes to Mere by survivorship
Joint savings account: $46,000 passes to Mere by survivorship
Tom's sole account: $12,000 is frozen and dealt with through the estate

Mere keeps the $55,000 in joint accounts, and no probate is needed for those

The same calculation on its own, with others like it

Sina applies for a Funeral Grant

Sina's husband died. The funeral director's invoice is $9,800. Her husband left $900 in a sole account and no other assets. Sina's income is below the limit that applies for a surviving partner, and no prepaid cover or insurance is paying for the funeral.

Funeral costs: $9,800
Less the assets her husband left: $9,800 - $900 = $8,900 of unmet cost
Maximum Funeral Grant: $2,697.43

Grant paid: the lower of the two, so Sina receives $2,697.43

💡 Apply even if you are unsure

The income and asset test can look complicated, but you do not have to work it out yourself. Work and Income assess it from your application. If you are not sure whether you qualify, it is still worth applying, and MoneyTalks or a Community Law centre can help you complete the form.

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David's estate needs a grant of probate

David dies leaving a valid will that names his wife Ana as executor. He held $62,000 in a savings account in his sole name and a KiwiSaver balance of $48,000. Ana asks the bank and the KiwiSaver provider to release the money.

Sole savings account: $62,000, which is above $40,000
KiwiSaver balance: $48,000, which is above $40,000

Both are over the threshold, so a grant of probate is generally required before they are released

⚠️ Plan for the wait

Money above the threshold is not available until probate is granted, which can take some weeks. This is why the funeral can be paid from the account directly, and why holding an everyday account jointly makes the first weeks easier. Our executor and probate guides walk through the steps if you are the one applying.

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Rosa pauses a big decision

Two months after her partner died, Rosa feels she should sell the family home quickly to simplify things. A relative is urging her to sell now. The home is worth about $700,000 and Rosa does not actually need to sell to pay any bills.

Home value: about $700,000
A rushed sale in a slow month, say 5% under a considered price: $700,000 × 5% = $35,000 less
Plus selling costs and the cost of moving and re-buying later if she regrets it

By waiting and taking advice, Rosa avoids a possible $35,000 loss on a decision she may not need to make at all

The same calculation on its own, with others like it