Evolution Lawyers

Relationship Property on the Death of a Partner or Spouse

Relationship property in the event of the death of a spouse

When two people are married, civil union partners, or de facto partners, and one spouse or partner dies, the question arises of how to deal with their relationship property. The term “relationship property” is defined in section 8 of the Property (Relationships) Act 1976 (PRA) and includes the family home, family chattels, and other jointly owned property. Under section 61 of the PRA, the survivor has an election of two options for dealing with relationship property:

  • Option A: Make an application under the PRA for the division of relationship property. This could include an application for equal sharing of such property, which is the presumption made by the PRA; or
  • Option B: Claim under the deceased partner’s will, or if they did not have a will, receive their interest in the intestate estate under section 77 of the Administration Act 1977 (AA).

This is essentially an election between having the survivor’s claim to relationship property dealt with under the PRA or in accordance with the usual rules for the administration estates under the AA (as if the PRA did not exist).

Time Limits

The survivor must make an election under section 61 of the PRA within six months of the grant of administration, or, in the case of a small estate, the latter of that date and the date six months after the death of the deceased spouse or partner. The Family Court can make an order extending the election timeframe.

Once an election is made it cannot be revoked by the survivor. However, the Family Court can make an order setting aside any election.

Option A

If the survivor chooses option A, any gift of relationship property made to the survivor in the deceased’s will is treated as revoked. The will is then interpreted as if the survivor had died before the deceased.

Under section 78 of the PRA, the survivor’s relationship property interest under the PRA is subject to the estate’s expenses, including reasonable funeral expenses. However, the survivor’s claim will have priority over:

  • any beneficiaries’ interests under the will;
  • any order made under the Family Protection Act 1955 or Law Reform (Testamentary Promises) Act 1949; and
  • all duties and fees payable by the estate.

Option B

If the survivor chooses option B, the survivor will receive their entitlement as a beneficiary of the will, or if the deceased partner did not have a will, according to the AA. The PRA does not apply to the distribution of the deceased partner’s property under the will or the AA when option B is chosen.

Option B is the default position if the survivor does not make an election.

Making an election under section 61

An election under section 61 of the PRA must be made by completing and signing a written notice recording the election. The notice must be:

  • in the prescribed form. This is set out in schedule 2 of the Property (Relationships) Forms Regulations 2001;
  • accompanied by a certificate signed by a lawyer certifying that the lawyer has explained to the surviving spouse or partner the effect and implications of the notice; and
  • lodged with the administrator of the deceased spouse of partner, or if administration has not been granted, in the registry of the High Court in which an application for a grant of administration would be required to be filed. This is usually the High Court at Wellington.

Couples who have entered into a contracting-out agreement under section 21 of the PRA will usually specify what option (A or B) the survivor must choose. So, it is important to review any contracting out agreement before making an election under section 61 of the PRA.

Contact us

If you have questions about wills or relationship property or would like assistance with making an election under section 61 of the PRA, please get in touch with our experts.