Small estates exemption under the Administration Act 1969 increases

On 24 September 2025, new regulations will come into force allowing - amongst other entities - banks, insurance companies, building societies, superannuation scheme trustees, and trustee corporations (which should cover most managed investment products and debt securities) to pay out a deceased's account where the account balance is NZD40,000 or less (the prescribed amount) to an eligible individual without that individual having to show probate or letters of administration. This is an uplift from the current prescribed amount of NZD15,000.

Under the Administration Act 1969, executors or families of the deceased must apply to the High Court for probate (of a valid will) or letters of administration (if there is no will or no executor) before they can uplift more than the prescribed amount from one of these financial institutions. This is a costly exercise and the Court process can take months.

The current prescribed amount of NZD15,000 was set under the Administration (Prescribed Amounts) Regulations 2009. Due to inflation, the true value of the prescribed amount has diminished over time.

This is a welcome change but we are surprised at the short time given to the industry to prepare for the change, as current systems and processes will need to be reviewed and updated.

Please reach out if you wish to discuss how these new regulations may impact your business.