How to Pass On Wealth and Protect Your Legacy

This is a practical guide to passing on wealth in New Zealand. It covers the documents you need, the decisions most families put off too long, and the NZ-specific traps (including a few non-obvious ones) worth knowing about before they become expensive. If you are building or preserving wealth for the next generation, everything here applies to you.

New Zealand is approaching the largest intergenerational transfer of wealth in its history. JBWere's 2025 Bequest Report estimates roughly $1.6 trillion will pass between generations by 2050, with annual inheritances growing from about $27 billion today to over $100 billion a year. BERL puts the figure at $1.11 trillion over the next 20 years. Either way, the sums are enormous, and most of this wealth sits in residential property.

In our work with New Zealand families, the pattern is consistent: the ones who transfer wealth well started the conversation years before they needed to. The legal documents matter, but the family conversation is what determines whether money holds together or tears people apart.

New Zealand has no inheritance tax, no estate tax, no gift duty, and no death duties. Nothing is automatically skimmed off when assets pass to the next generation. This is unusual by global standards and a genuine advantage. But it also means there is no built-in prompt to plan. Without the threat of a tax bill, many families never get around to the conversations, documents, and decisions needed to protect what they have built.

The result: about half of New Zealanders still do not have a will. Fewer have enduring powers of attorney. Trusts are common but often poorly maintained. And family conversations about money remain rare.

Start with the legal foundations

Your will

A valid, up-to-date will is the single most important document in any wealth transfer plan. Without one, the Administration Act 1969 dictates where your assets go, and the results rarely match what most people would choose. A surviving partner receives personal chattels plus $155,000, with the remainder split between partner and children. If there is no partner and no children, the estate passes to parents, then siblings, then increasingly distant relatives. Courts appoint administrators. The process is slow. Fees accumulate.

Marriage revokes an existing will in New Zealand. So does a new relationship property agreement in some circumstances. If you have remarried, separated, had children or grandchildren, or acquired significant new assets since your will was last reviewed, it is overdue for an update. A good rule of thumb: review every three years, or after any major life event.

Enduring powers of attorney

Enduring powers of attorney (EPAs) are often overlooked, but they matter just as much as a will for wealth preservation. There are two types: one for property (covering financial decisions) and one for personal care and welfare (covering health and living arrangements). If you lose mental capacity without EPAs in place, your family must apply to the court for legal guardianship. This is expensive, stressful, and slow.

A non-obvious trap: EPAs have specific witnessing requirements under the Protection of Personal and Property Rights Act 1988. If the witnessing is done incorrectly, or if the certificate is incomplete, the entire document can be invalid when you need it most. Have them prepared by a lawyer, not a DIY template.

Choose someone you trust, someone capable of making difficult decisions under pressure, and ideally someone younger than you. You can appoint different people for property and personal care if the roles call for different skills.

Family trusts

Family trusts have been a cornerstone of New Zealand wealth planning for decades, but the Trusts Act 2019 changed the rules significantly. Trustees now have mandatory duties, beneficiaries have enhanced rights to information, and record-keeping requirements are far more demanding.

Another trap worth knowing: many older trusts are non-compliant with the 2019 Act and their trustees do not realise it. A trust set up in the 1990s or 2000s with no annual meeting minutes, no documented trustee decisions, and no updated deed is not just untidy. It is a liability. If a dispute arises, or if the trust is tested by a relationship property claim, non-compliance can undermine the entire structure. If your trust has not been reviewed since the Act took effect in January 2021, it is overdue.

Trusts still offer real benefits: asset protection from future creditors, protection from relationship property claims (for assets gifted more than two years prior), residential care subsidy protection (after five years), probate avoidance, and control over the timing and conditions of distributions. But they are not free. Setup costs run $2,500 to $5,000, with ongoing administration of $800 to $1,500 a year. For some families, the cost outweighs the benefit. The decision should be made with professional advice, not assumed.

Give earlier, or give later?

People are living longer, and the maths of inheritance is shifting. Australian Productivity Commission data, which closely mirrors New Zealand demographics, shows most inheritances now arrive when recipients are in their fifties or sixties. By 2050, the average age for receiving an inheritance is expected to be around 55, up from roughly 50 today. By the time many heirs receive their parents' wealth, the mortgage pressure, school fees, and career-building years it might have helped with are long past.

This is part of why the Bank of Mum and Dad has become such a force in New Zealand. Many families are choosing to transfer wealth earlier, when it can make the most difference: helping children onto the property ladder, through a business start-up, or past a difficult period.

Early giving has clear benefits, but it carries risks. You need to be certain your own retirement funding is secure before giving anything away. Longevity, health costs, and the rising price of residential care can erode savings faster than most people expect. Gifting assets also means losing control of them, and relationships can change. What feels generous at 60 can feel reckless at 80.

In practice, this means the timing decision should never be made in isolation. It requires a clear picture of your own retirement plan, a realistic view of future costs (including the possibility of residential care), and honest conversations with the people involved. There is a genuine case for spending your children's inheritance if the alternative is running short. The right answer is different for every family, and almost always needs professional advice to get the numbers right.

Fair is not always equal

One of the most common sources of family conflict is the assumption equal means fair. Consider a common New Zealand scenario: one adult child has lived nearby and provided years of practical care for ageing parents, while another lives overseas and has had little involvement. Splitting the estate 50/50 can feel deeply unfair to the caregiving child, and the resentment can last decades.

Open conversation matters more than any legal document here. Families who discuss their intentions early, explain their reasoning, and acknowledge the difference between fairness and equality tend to avoid the worst disputes. Surprises in a will are one of the most reliable predictors of lasting family conflict.

If your family includes a blended structure, with step-children, ex-partners, or children from different relationships, the complexity increases sharply. Relationship property claims under the Property (Relationships) Act 1976 can override the intentions set out in a will. Claims under the Family Protection Act 1955 allow family members who feel inadequately provided for to challenge the estate. These are not edge cases. They happen regularly.

Property-heavy estates need special attention

Over 60 per cent of New Zealand household wealth is held in property, much of it in the family home, rental investments, or family farms. This creates a particular problem: property is illiquid. You cannot easily split a house between three children, and forcing a sale at the wrong time can destroy value.

Families with property-heavy portfolios need to plan for liquidity well ahead of time. Options include life insurance to cover estate costs, structured gifting of other assets to balance property-heavy bequests, or clear instructions about whether properties should be sold or retained. For families with investment property, the question of whether to hold, sell, or restructure before transfer should be part of the conversation years before it becomes urgent.

Talk about money before it is too late

Research consistently shows the biggest risk to family wealth is not poor returns. It is a lack of communication. The often-quoted statistic: 70 per cent of wealth is lost by the second generation, and 90 per cent by the third. The pattern, sometimes called "shirtsleeves to shirtsleeves in three generations," is not inevitable, but it is common enough to take seriously.

In New Zealand, conversations about money can feel awkward or even impolite. Some parents worry they will reduce their children's motivation by discussing wealth or inheritance. In practice, the opposite tends to be true. Children and grandchildren who understand the basics of saving, investing, and compound growth are far better equipped to manage what they eventually receive. This is one of the most valuable things you can pass on, and it costs nothing. The risk of not doing it is affluenza: heirs who inherit money they were never taught to manage.

One more NZ-specific trap: KiwiSaver Scheme nominations do not automatically follow your will. If you have not updated your KiwiSaver Scheme nomination (or if your provider does not hold a valid one), your KiwiSaver investment may be distributed according to intestacy rules rather than your wishes. The same applies to life insurance beneficiary nominations. Check both, and check them whenever your will is updated.

Document everything

Beyond the will and EPAs, a clear record of your assets, ownership structures, and intentions makes an enormous difference when the time comes. This includes joint holdings, trusts, company structures, KiwiSaver Scheme nominations, superannuation, insurance beneficiaries, and digital assets (online accounts, subscriptions, crypto, stored passwords). If your executor cannot find it, it may as well not exist.

If you have made gifts, loans, or early distributions to children during your lifetime, record them clearly. Many family disputes stem from conflicting memories about whether a payment was a gift or a loan, and on what terms.

Giving beyond the family

Only about 6 per cent of New Zealand wills currently include a charitable bequest, and just 1.3 per cent of total inheritance value goes to charity. By comparison, bequest rates in the US and UK are three to five times higher. Charitable bequests, donor-advised funds, and structured giving can all form part of an estate plan without reducing what the family receives. For families thinking about this, the key decision is how to structure it so the giving is durable and aligned with what matters to you.

Why planning now is sensible regardless of politics

New Zealand's lack of estate or inheritance tax is not guaranteed to be permanent. Government net debt has risen materially, and the fiscal pressure to broaden the tax base is building. Various proposals for capital gains taxes, wealth taxes, and inheritance taxes have surfaced from across the political spectrum. None is imminent, but the direction of travel is worth noting.

For families, the practical takeaway is simple: the current rules are favourable, and planning under favourable rules is easier and cheaper than planning reactively after the rules change. If a new tax affecting wealth transfers is introduced before the peak transfer years in the 2040s, families who have already structured their affairs will be in a materially stronger position.

Where to start

A practical starting point for any family:

• Establish or update your will and appoint appropriate executors.
• Put enduring powers of attorney in place for both property and personal care.
• Review your trust (if you have one) against the Trusts Act 2019 requirements.
• Check KiwiSaver Scheme and insurance beneficiary nominations to ensure they align with your will.
• Document your assets, ownership structures, and beneficiary nominations in one place your executor can access.
• Decide whether to provide support during your lifetime and record the terms clearly.
• Have a family conversation about values, expectations, and what fairness means in your situation.
• Review everything every two to three years or after major life events.

Passing on wealth well requires coordination between your lawyer, accountant, and financial adviser. If you would like to pressure-test your current arrangements against what we see working for New Zealand families, get in touch.