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Life, death and KiwiSaver – who gets my money when I die?

August 1, 2018

You can’t always see death coming but it’s good to remember you can decide while you’re living who gets your KiwiSaver when you die.

man waiting apprehensively

KiwiSaver is about the future, investing now to help give yourself the life you want in retirement. But what happens to your investment if you die before then? Will it automatically be given to your partner? Not necessarily.

Making sure your money ends up with the right people

If you die while you are a member of a KiwiSaver scheme your full account balance will be paid to your estate. You can’t nominate people (called ‘beneficiaries’) to receive your funds directly from your KiwiSaver Scheme; your provider always has to pay it to your estate.

If you want particular people to receive the proceeds of your KiwiSaver account, you should (if you haven’t already) make a will and specify who you want to receive those proceeds.

Many New Zealanders don’t have a will. It’s the kind of thing that’s easy to dismiss as something for when you’re older. Don’t delay. If you’ve got KiwiSaver, you’ve got an asset that someone you love could enjoy if you can’t. If you can’t enjoy your retirement savings wouldn’t it be good to know it will go to the people you want it to go to?

Make a will

Making a will is one way to ensure assets, like your KiwiSaver investment, ends up with the right people.

If you’ve made a will, your KiwiSaver scheme provider will pay your full account balance to your estate. Your funds will then be distributed as specified in your will.

Once you’ve made a will it’s worth telling the people in your will who your KiwiSaver scheme provider is. That way, if the worst happens, they’ll know which provider to contact.

What happens if there isn’t a will?

If you die without making a will, (called dying ‘intestate’), things can be more complicated. An application will be made to the court to enable the court appoint someone, such as your closest relative, as the estate’s administrator.

In this situation, the law, rather than you, decides who gets your assets. Including your KiwiSaver. It can also take a while, often longer than if you had a will.

If your KiwiSaver account balance is under $15,000 and administration of your estate has not been obtained in New Zealand, people such as your partner, your children or someone caring for your children,  can apply for the money without needing a will or going through the courts.

Need more help?

If you’re a Kiwi Wealth KiwiSaver Scheme member and need more information about what would happen if you died before withdrawing your retirement savings, contact us.

Tags: Investing, KiwiSaver, Kiwi Wealth

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