If you are a client, it is likely that you will have heard from us about why you should have a Will. Sometimes changes to your life or family circumstances require a revision to the Will and this can be overlooked. It is not at all surprising that this can happen as the types of things that can trigger issues with Wills are also likely to be significant life events where emotions may be running high.
For example, if a marriage or civil union ends, a Will is generally rendered inapplicable with respect to the ability of the former spouse to either receive any entitlement to property or gain the administration of the dying spouse’s estate.
A complication is that no marriage or civil union can be dissolved (a divorce) until the parties have lived apart for 2 years. So, during that period it is common for matters relating to the marriage or relationship property to be settled and this is usually done by way of a Relationship Property Agreement (“RPA”).
You might think that having such an agreement in place would determine the position even if one of the spouses were to die before the marriage or civil union were dissolved. However, a recent case demonstrates the complications that can arise. In the High Court (O’Donoghue v Comia [2023] NZHC 2735) a married couple had separated and entered into an RPA. The agreement provided for a very unequal division of the proceeds of sale of the matrimonial home and each acknowledged the reasons for this.
One of the couple died before the marriage was dissolved and the surviving spouse, Comia, sought to claim a full inheritance, relying on the fact, in this case, there was no Will, the statutory “default” provisions of the Administration Act applied. In other words, Comia argued that the RPA did not have effect.
This would have meant that Comia would have been entitled to receive all the property of the deceased as well as being given the rights to administer the estate, seemingly very much at odds with the agreement of the parties under the RPA.
The High Court determined, following an earlier case (Warrender v Warrender [2013] NZHC 787) that the RPA could still be valid, provided it complied with the safe-guarding conditions set out in the Property (Relationships) Act 1976. While in this case there were questions over this and the High Court directed the determination of those issues to the Family Court, nevertheless the case stands as authority for the ability of an RPA to prevail over the default statutory regime in these circumstances.
CONCLUSION
This case is a very salient example of always checking to ensure that you have an up-to-date Will, and that significant changes to your circumstances can have an unexpected and often unwanted effect, and with the possibility of incurring considerable legal costs, which might easily have been avoided.
