New Zealand, and the globe, is now undergoing its largest intergenerational transfer of wealth in the complete history of mankind, with an estimated $1 trillion to $1.6 trillion set to pass to younger generations by 2050 in New Zealand alone. Key recent law updates, including changes to probate thresholds and ongoing trust compliance, are prompting families to overhaul their estate planning in order to ensure the smooth transition of wealth. Without proper planning, the transition can inhibit prosperity for baby boomers, their children and grandchildren.
Facts: Inheritances are forecasted to grow significantly in the next 25 years, as baby boomers presently make up around 23% of the population yet own more than 50% of New Zealand’s wealth, which is primarily tied up in the 1.6 million residential homes owned by Kiwis aged over 50. As a result, including the fact the world has an aging population who are living longer than ever before, many beneficiaries are unlikely to receive inheritance wealth until they are well into their 60s.
What are the Key Law Updates? The Probate threshold determines when Banks can release funds held in a deceased person’s sole name without requiring a formal grant of probate from the High Court. This increased from $15,000 to $40,000 in September 2025. While this simplifies administration for smaller estates, the average KiwiSaver balance now hovers around $37,000, meaning most estates still hit the High Court threshold. Similarly, while family trusts remain a favourite vehicle to transfer wealth between the generations, the mandatory disclosure and record-keeping obligations introduced in the Trusts Act 2019, obligates settlors and trustees to review and maintain trust governance to ensure compliance. Presently New Zealand does not have an estate duty, inheritance tax or, thus far, a capital gains tax (CGT) on inherited wealth, making proactive planning essential to avoid family conflict and to distribute assets fairly.
Estate Planning is Evolving: The will as the sole inheritance plan is now largely out of date and Kiwis are now using wills alongside other ways to address the transfer of wealth to their beneficiaries, including gifts made during their lifetime. Estate planning addresses the asset concentration dilemma; many families transferred wealth is tied up in residential property and/or family businesses. Without proper succession mapping, dividing these illiquid assets can cause family disputes. Given the billions of dollars transferring, financial advisors in New Zealand are increasingly having “golden conversations” with clients to discuss leaving portions of their wealth to the registered charity sector. Jointly owned property, the use of Kiwisaver funds and gifting is another strategic way Kiwi families are unifying family wealth rather than relying solely on traditional wills. The risk of doing nothing raises the risk of inheritance-related family disputes and the potential for a loss of wealth due to a lack of financial literacy, or over reliance on property, by heirs.
The Essential Next Steps:
Check Your Will: Nearly half of New Zealand adults do not have a will, meaning the default Administration Act rules could divide your estate in ways you did not intend. Where you fail to speak, the law will speak for you.
Enduring Powers of Attorney (EPAs): Establishing EPAs is just as critical as a will. These documents ensure that a trusted person makes decisions about your property and personal care and welfare if you lose mental capacity during your lifetime.
Review Structures: Ensure your family trusts and relationship property agreements (otherwise known as contracting out agreements) reflect your current relationship dynamics and recent law changes.
Want to have a conversation about planning ahead for the transfer of your wealth? Our Raglan estate planning team can plan your wills, trusts, EPAs and all your next moves to define your legacy goes exactly where and when you want it to. Phone us on (07) 2420751 or email us via our website www.ginajansen.co.nz to chat.
