In  this the second of the series of Articles taken from David’s paper (Will your will work well”) David describes and explains various types of Wills

Under our will we appoint executors (who become trustees if administration of our estate goes beyond the “executors year”) to get in our assets, deal with our liabilities and distribute our estate according to our wishes – holding certain assets as trustees if the entitlement to them is postponed.

The types of wills include:

  • Wills in contemplation of marriage.  Any will is revoked by marriage.  However, because newly weds might not be focussed on the need to make new wills immediately after their wedding, the law provides for them to make their wills prior to marriage.  Any will that is expressed to be in contemplation of marriage to a certain person will not be revoked by the will makers marriage to that person.
  • Mutual wills.  These are rare but they have their place.  Here each will maker benefits the other and agreed beneficiaries in reliance on the other will maker not changing their will without joint agreement.  Because it takes away testamentary freedom (the right to revoke your will by making another) I have never been confident that a mutual will can “stick”.  However, I am sure they have their place.
  • Wills creating legacies, bequests, donating organs, directing cremation/burial, imposing conditions on inheritances such as age, marital status etc. 
  • Wills creating life/widowhood interests.  These provisions give limited rights until the beneficiary dies or remarries.  The Death Certificate or Marriage Certificate evidences the end of the interest. 
  • Wills creating rights of occupation.  These are common for blended families and in de facto relationships.  The danger with them is how to determine when the right ends.  Often it is left to the trustees to determine whether the beneficiary is in a new relationship (how many days/weeks residence, toothbrush test, holidays) so if the trustees are the surviving partner and a child from the first relationship (who is to benefit when the right ceases) then there is a conflict and often an argument as to when the right has ceased.
  • Hotchpot provisions.  These take into account gifts/loans (other than small amounts for Christmas, birthdays etc) made by the will maker during his/her lifetime.  Such gifts and loans are taken into account prior to distribution of the deceased’s estate to even out the entitlement of the beneficiaries.

David has been elected to the 12 strong Board of Governors of The Australian and New Zealand College of Notaries. He has been a member of the College since it was established in 2007.

He is the only New Zealander on the Board. Other members represent Notaries in Queensland, New South Wales, South Australia, Tasmania, The Northern Territory, The Australian Capital Territory, Victoria.

The Australian and New Zealand College of Notaries is committed to promoting the highest standards of notarial practice through excellence in education, professional development and support for its members.

Although membership of the College is not mandatory for New Zealand Notaries, David believes there are real benefits, including successful Master Classes for Notaries which have been held in Auckland and Wellington. He hopes to promote these benefits to New Zealand Notaries during his term as a Governor.

David has been involved with the Beginning Experience Auckland team  for some years. 

The purpose of the Beginning Experience ministry is to help divorced, separated and widowed men and women and their children of divorce, parental separation and death to heal the grief of their loss, to help them with the suffering of their separation.

For the first time in 6 years New Zealand hosted an International Conference in Auckland in November, with delegates from Australia, United States, Wales, Ireland, Singapore and NZ. David was invited to present a paper on the New Zealand position regarding key aspects of Wills. 

This paper “Will your will work well?  (Will your assets at your death end up going to those you want to benefit?)”  was very well received by attendees so we decided to serialise it in our website over 6 months. The first article covers Powers of Attorney. We hope you find this and future articles in the series helpful.  



Many of my clients assume that, having made their wills, then if they lose capacity during their lifetimes, the trustees they have appointed under their wills are able to take care of things.

That is not the case.

A will can only speak when we die.

During our lifetimes we need to give powers of attorney if we want anyone to look after matters for us.

A power of attorney gives the attorney the authority to do whatever we would be able to do if we were present. 

However, the attorney’s capacity is only as good as the capacity of the donor.

That means if we have a power of attorney and “lose our marbles” then the attorney can’t do anything for us.

This situation has been addressed by the creation of enduring powers of attorney.  They are creatures of statute.

Once the (now rather onerous) requirements for setting up enduring powers of attorney have been met, then the attorney can represent us even if we later become unable to work out things for ourselves.

Any power of attorney can be revoked – so long as the donor has capacity.

All powers of attorney are revoked on death.

There is an advantage in appointing as attorneys the same people as you appoint as trustees of your will.  That means a seamless arrangement after your death if your affairs have had to be handled by your attorneys while you are living.  It also means that the attorneys (especially if they are family members) are alert to the accountability to beneficiaries when you die.

That removes the attorneys focus from themselves if there is any element of self interest conflicting with your interests or the wider interests of your family.

We have a new physical postal address - but the good news is we haven't moved.  

Confused - well you might be. After being 450 Kamo Road since 1990 we became 2B Meldrum Street earlier in 2017. Then, because of confusion with the flats at 2 Meldrum Street (known as 2A, 2B, 2C, 2D and 2E) the Whangarei District Council (in association with Land Information NZ) has now renumbered the office as 2 Meldrum Street.

After 6 and a half years, as an elected representative on the Council of ADLS, David has reluctantly stood down. He completed his term on Friday 14 October 2016. This was 5 months before the scheduled end of his term. The demands of a busy Whangarei based practice had simply become too great, and of course David’s commitment to his clients always had to come first.

David is very grateful for the support he received from friends and colleagues during his time on the Council . Recognition of his contribution has been forthcoming from several members of the legal profession. A senior colleague in Whangarei, Ian Reeves, recently thanked David for the huge personal commitment and skill he devoted to the role. 

Purchasers beware approving early release of the deposit

It is always in the interests of vendors to get their hands on their purchaser’s deposit payments as soon as they can. Why? After deduction of land agent commission, the balance can be used to repay part of the mortgage prior to settlement and save some interest. Also possession of the deposit gives additional power to the vendors in any dispute. 

Unless the parties agree otherwise, there is a statutory minimum of 10 working days where the agent must hold the deposit. 

People may not be aware however that the deposit paid on a property purchase belongs to the purchasers until the vendors have met all of the vendors’ obligations under the agreement.

Assuming the agreement is the standard ADLSI/REINZ form, these obligations include, but are not limited to:

  • giving vacant possession
  • remedying any matters which need to be attended to after the purchasers have exercised their right to a pre-settlement inspection
  • complying with any requisitions made since the deposit was paid
  • paying the purchasers any amount due for any late settlement by the vendors.
  • providing on settlement a registrable Transfer and discharge of the vendor’s mortgage.

Also there are circumstances (under General Conditions 4 and 10 of the ADLSI/REINZ agreement) where the vendors have agreed that the purchasers will be entitled to a full refund of the deposit. 

It might be difficult for the purchasers to recover the deposit if the purchaser’s lawyer has authorised the release of it in the meantime. 

With this background in mind, where we act for the purchasers, Northlaw’s practice is not to authorise release of the deposit until directed to do so after we have explained the options to them.

An example of what can happen 

A property is completely destroyed by fire prior to settlement but after the agreement has been declared unconditional and the agent’s commission deducted.  The agents resist refunding the commission (on the basis they have earned it by achieving for the vendors an unconditional sale). This could be very disadvantageous to a purchaser who had authorised early release of the deposit and deduction of the commission.  The vendor’s liability to the agents for their commission is of no concern to the purchaser if and when the purchaser is entitled to a refund.

There would be the same problem if a purchaser’s lawyer authorised the release of the deposit if the purchaser clients subsequently had difficulty recovering it following a default by the vendors.

As always make sure you talk with your lawyer about these issues so you don’t get any nasty surprises.

Impact on the Transfer of Property (Conveyancing) process

The Government has made changes to improve Tax Compliance in the property sector. These will have a significant impact where we are transferring property for our clients. We are now required to provide tax information by way of a “Tax Statement” to Land information NZ (LINZ) who will then provide this to IRD. A transfer of land will not be able to be actioned unless the required information is provided.

We will therefore now need a lot more detail from our clients than we are presently obtaining. Costs will increase because;

  • A New Zealand IRD number will be required by both vendors and purchasers as part of the land transfer process.  
  • “Offshore persons” will need a New Zealand bank account before they can get an IRD number.
  • As part of the land transfer process, “offshore” buyers and sellers must also provide their tax identification number from their home country.

An individual is exempt from the above rules if they are not an “offshore person” and they are purchasing or selling their main family home. However:

  • The main home exemption does not apply if the property was or will be owned by a trust.
  • The main home exemption does not apply if the person has used the exemption twice or more in a two year period.
  • For the main home exemption to apply the land must be residential land.
  • If a person has multiple homes the exemption for providing the information for the main home can only apply once.

The requirements apply to all contracts entered into on or after 1 October 2015.

In addition to the above changes, IRD proposes that residential land withholding tax (RLWT) will apply to sales of residential property in New Zealand from 1 July 2016 where the vendor is a foreign investor and the property is sold within two years of purchase.

The amount of RLWT withheld would be the lower of:

  • 33% of the vendors gain on that property; and
  • 10% of the sale price of that property.

It is also proposed that the lawyer involved in the transaction will withhold and pay the appropriate amount of RLWT to Inland Revenue.

David has been instrumental in the revision of the  Guidelines adopted by the Property Law Section of NZLS and ADLS Inc for incorporation in the latest edition of its widely used agreement for sale and purchase of real estate.

The Guidelines assist the day to day smooth running of transactions involving the sale and purchase of properties, the registration of mortgages and their subsequent discharge and relationship property protocols.

Many of the Guidelines are of a technical nature. However there is much in them that help all law firm clients - including Northlaw’s - understand the matters considered when we act in respect of property transactions. 

Here is a link to the 80 page edition of the Guidelines (updated and operating from 13 April 2015):