Mother Joyce Meldrum, who lives in Australia, said it was upsetting to learn of the mistake as she had no idea her daughter had been wanted by the police.
"It's devastating," she said. "I'm quite upset. I didn't even know anything about it. She used to take in all these deadbeats that she felt sorry for and it got her in with the wrong crowd. She was a really lovely person. She just went astray for a few years. I'm really quite in shock."
Ms Meldrum moved to Australia about 2003, she said.
She was concerned Ms Meldrum's son, who still lives in the Bay of Plenty, and other family members in the Waikato would be upset if they read of it in the news.
Ms Meldrum's daughter, who lives in Queensland, did not know about the outstanding warrant either.
A Ministry of Justice spokesman said she was still in the system because her death had not been registered with agencies in New Zealand.
"We regret any distress we caused the family," he said. "It simply is because she died outside the country."
The Ministry of Justice case management system was reconciled with the New Zealand births, deaths and marriages register to keep track of those with outstanding matters, he said.
A Department of Internal Affairs spokesman said a person's death, marriage or birth was generally registered in the country it occurred in regardless of their citizenship. That meant the death of a New Zealand citizen in Australia was unlikely to be recorded by authorities in New Zealand.
A police spokeswoman said police could not comment on the issue as the police role was to execute warrants issued by the courts and act on the information they provided.
History
2004 Arrest warrant issued for Helen Maree Meldrum in the Waihi District Court after she breached a community work order.
2007 Helen Maree Meldrum dies on November 23.
2013 Helen Maree Meldrum's name features in a list of wanted people released to the Bay of Plenty Times.
