Summer reads: Show me the money - understanding trusts, inheritance and divorce laws
This year the Herald’s award-winning newsroom produced a range of first-class journalism, including investigating the state of our mental health in the Great Minds series, how NZ can rebuild stronger post-Covid with The New New Zealand and how to minimise the impact of living in an InflationNation.
This summer we’re bringing back some of the best-read Premium articles of 2022. Today we take a look at trusts, inheritance and divorce.
The inheritance trap: What you’ll be entitled to under new law
New Zealand's inheritance laws were reviewed this year. Photo / 123rf
Kiwis who have fallen out with a parent and are cut out of their inheritance may not be able to contest the will under wide-ranging recommendations that will form a new Inheritance (Claims Against Estate) Act.
But some step-children may be able to claim against a step-parent’s estate; and the courts could have greater ability to recover the deceased’s assets if they fall outside the estate, for example in trusts.
The recommendations are among 140 in a report by the Law Commission, which was charged by the Government with reviewing New Zealand’s outdated inheritance laws. The review of the out-of-date and out-of-touch laws was long overdue, with many of the statutes now more than 70 years old. Among issues they fail to take into account is complex blended families as a result of re-partnering.
The new law however, could upset some adult Kiwis in the future.
Trust busting: Inheritance, divorce law changes mean assets will no longer be safe
Parents who decide to cut a child or children out of their will should consider leaving a nominal amount to avoid future legal claims. Photo / 123RF
The days of hiding assets in trusts to stop children inheriting or ex-spouses from claiming relationship property are numbered as a result of changes proposed by the Law Commission.
Jane Phare reports on what’s in store for New Zealand’s inheritance laws.
Family trusts: Why they will cost you more as IRD hovers
The cost of having a family trust could be able to rise. Photo / 123RF
The cost of operating a family trust is set to rise just as many of those who use trusts face increasing costs in their businesses and personal lives.
New trust disclosure rules came into force from April 1 last year in a bid to make trusts - of which there are around 180,000 in New Zealand - more transparent.
That means trusts are now being asked to provide extra information about their earnings, financial positions, settlements, settlors, distributions, beneficiaries and powers of appointment to the Inland Revenue Department.
Divorce ‘warfare’: The legal tactics when marriage break-ups turn ugly
Where is Lady Justice? Women who have had traumatic experiences in the Family Court say the system is not fair. Photo / 123RF
Women trapped in the ongoing nightmare of protracted financial and legal battles want the Government to do more to fix a Family Court system they claim allows years of abuse, often leaving one party traumatised and in poverty.
Some spoke of being subjected to psychological warfare involving ongoing legal tactics, including stalling over disclosure of property, causing appeals to drag on for years, draining them of money, racking up debt and badly affecting their children. The astronomical cost of continuing to fight litigious ex partners through the courts forced some to give up, or accept offers considerably lower than their legal entitlement.
Tactics included everything from changed locks, trespass notices and eviction instructions from the Tenancy Tribunal to cutting off money, fighting for guardianship of the children, and mounting endless appeals to delay settlement.
Although financial abuse is recognised under the Family Violence Act 2018 as a form of psychological abuse, advocates say it is still not widely acknowledged by the court system or judges.
