Uplifting funds without High Court paperwork – the $15,000 threshold is about to change to $40,000

Cheryl

1 month ago

Have you been told you need High Court permission (probate or letters of administration) before you can access your loved one’s funds, because they had more than $15,000 in a New Zealand bank?

That rule is about to change.

Starting on 24 September 2025, banks and other financial institutions will be able to release up to $40,000 without requiring High Court paperwork such as probate or letters of administration.

This is a major shift from the long-standing $15,000 cap.

Here’s the new regulation itself: Administration (Prescribed Amount) Amendment Regulations 2025

This increase is more generous than what Kiwilaw called for in its 2023 petition. At that time, we advocated an urgent inflation-adjusted rise to $25,000, recognising that a larger jump might have broader policy implications.

The new $40,000 limit will be a welcome relief to many families dealing with straightforward estates.

Caution: this change does NOT apply if your loved one had more than $15,000 in government stock (central or local government) or company shares. The threshold for those assets is still $15,000. (Thanks to the Probate Unit newsletter for pointing this out, 19 Aug 2025.)

Only the amount has changed — the rules about who may receive the funds stay the same

Section 65 of the Administration Act 1969 has not changed.

It still allows a financial institution to release funds without probate or letters of administration only if:

it is satisfied the person has died;
it is satisfied that probate or letters of administration have not been obtained in New Zealand; and
it receives an application or consent from the person to whom the payment is made.

That’s it. The section doesn’t say the payment must go to the executor named in the will or to someone with the right to inherit under intestacy law (when there is no valid will).

Under s 65(2) of the Administration Act, the bank may pay to:
the deceased person’s widow, widower, or surviving civil union partner
a surviving de facto partner of the deceased person
the children of the deceased person
beneficiaries under the deceased person’s will
beneficiaries under the law of intestacy (if no valid will)
executor named in the will – or other person entitled to obtain administration of the estate
deceased’s person relative (by blood or marriage) who undertakes to maintain any of the deceased’s children who are under 18
person who is exercising the role of providing day-to-day care for any of the deceased’s children who are under 18

This wording has been in place for decades.

Financial institutions should still make reasonable enquiries and release funds only to:

the executor/s under the will, or
whoever is entitled to inherit according to the will; or
the person/s entitled under the law when there is no will, or
the person/s legally recognised as caring for the deceased’s children, if the children are entitled to inherit.

This reduces the risk of disputes or claims down the track and respects both the intent of the will (if there is one) and the legal rules for intestacy.

What if the funds are used incorrectly?

The law does provide some safeguards:

For the financial institution:
Under section 65(6), a payment made in good faith to someone the bank reasonably believes is eligible under the section is valid and the bank is absolutely discharged from liability, even if someone else later claims entitlement.

For the recipient:
Under section 65(7), anyone who receives money under this section must apply it in due course of administration.
The bank or provider may require a written undertaking or bond to ensure this — though it is not obliged to monitor how the funds are used. (Kiwilaw understands that, in practice, bonds have not been required. With the jump to $40,000, that may change.)

That’s fine when the funds are genuinely used to pay funeral costs and settle estate bills, before the balance is paid to whoever the law says is entitled to inherit it. (That may include someone who the rest of the family think should not inherit anything.)

Sometimes, especially when there’s a dispute, life can get complicated.

If the person who is paid chooses not to pay funeral costs or distribute the funds as the law requires, the only recourse may be court proceedings. In some cases the Disputes Tribunal may be able to help, but not with deciding who should receive an inheritance.

In some cases, the financial institution may still choose to require probate or letters of administration — even if the amount is under the $40,000 threshold.

What about funeral invoices?

Section 65 also allows a bank or other financial institution to pay:

the funeral account directly, or
reimburse someone who has already paid it —

but only if nobody has already been paid under section 65(2).

Once a payment has been made to an individual under section 65(2), that person is responsible for applying the funds properly — including paying the funeral expenses.

Again, this is why it matters who gets paid first.

What about KiwiSaver funds?

Yes — section 65 of the Administration Act also applies to KiwiSaver schemes.

Under clause 1.9 of Schedule 1 of the KiwiSaver Act 2006, every KiwiSaver provider is bound by section 65 of the Administration Act. This applies regardless of what the KiwiSaver trust deed says, because the scheme rules in the Act override any inconsistent terms in the deed.

That means:

From 24 September 2025, a KiwiSaver provider can pay out up to $40,000 without requiring probate or letters of administration — if the s 65 criteria are satisfied.
This includes the ability to pay a funeral invoice directly or reimburse the person who paid it,
but only if no other payment has already been made under s 65(2).

So the small-estate payment rules apply just as much to KiwiSaver accounts as they do to bank accounts — and the same cautions apply.

Why having a valid will still matters

This change makes it easier to access small amounts of money — but it doesn’t remove the need for a will.

Having a valid will still makes it much easier to show:

who is entitled to the funds, and
who has authority to act for the estate.

That clarity matters — especially when there’s more than one person with a claim, or when the estate includes multiple assets, or when there are family complications.

This is another good reason to make a valid will. It will be much easier to show who is entitled to uplift the funds.

Cheryl Simes – 3 August 2025 (updated 19 Aug 2025)