What happens to my KiwiSaver if I die

The Inland Revenue KiwiSaver website states that on your death, all your KiwiSaver savings are paid to your estate.

So how easy will it be for your loved ones to access your savings? Well, that depends on how much is in your KiwiSaver account. If your balance is under a certain amount (currently $15,000) when you die, your next of kin won’t need to wait for ‘probate’ or ‘letters of administration’ and can apply directly to your KiwiSaver provider to release the funds.

Probate is recognition from the court that your family, or the executors of your estate, have the authority to deal with your assets and can distribute them in accordance with your will. If you don’t have a will when you die the court can grant letters of administration, which work the same way as probate.

However, if your KiwiSaver balance is over $15,000, your family will have to wait. And if there is some debate over who gets what, the whole process may not be at all straightforward.

As this article written way back in 2007 put it:

“Having significant financial assets means having an up-to-date will, or the cash will be locked up until the courts decide probate, which could cost a pretty penny in legal fees. Also, people who don't set out their wishes clearly in a will could find their family descends into scrapping over who gets their hands on their savings.”

You may think your financial affairs haven’t changed enough to warrant updating your will, but in the Kiwi Wealth KiwiSaver Scheme 2015 annual report the average member account balance was $16,028, and that year around $2.5 million was taken out in death and disability withdrawals.  So as KiwiSaver account balances increase, it becomes even more important for members to make sure their will is up to date.

But whatever the balance of your account, the Inland Revenue KiwiSaver website offers some good advice:

 “Make sure you tell your next of kin who your scheme provider is. They will need to contact the scheme provider to discuss the documentation required to finalise and payout the funds that have accumulated in the account.”

That’s something you can act on right now. Let your loved ones know who your KiwiSaver provider is. Then get onto updating that will!