What is a “testamentary promise”?
A testamentary promise is a promise made by one person (“Person A”) to another (“Person B”) that Person B will receive compensation for providing services to Person A. For example, Person B might mow Person A’s lawns every week on Person A’s promise that Person B will be repaid out of Person A’s estate when they die.
If Person A were to neglect to provide for a promise in their will, Person B can bring a testamentary promises claim under the Law Reform (Testamentary Promises) Act 1949 (“the Act”). If, after evaluating all of the facts, a Court is satisfied that Person A made a testamentary promise to Person B in return for services received, the Court can order the executor/administrator of Person A’s estate to pay the claimant a reasonable amount (having regard to a number of factors in that particular circumstance).
Testamentary promises can be made in writing or orally. When a promise is made orally, it can be more difficult to prove that a Promise was made. Nevertheless, the Court will consider all of the facts of the case before making a decision.
There is a time limit to make a testamentary promises claim. A potential claimant has only 12 months from the grant of probate to bring a claim (however, this time limit can be extended by the Court if the estate has not been distributed).
How do you prove a testamentary promise exists?
There are four requirements to prove a testamentary promise exists. There must be (incorporating Person A and B from the above explanation):
- Work or services done by Person B for Person A;
- An express or implicit promise from Person A to Person B;
- A causal link between the promise made and the work or services done; and
- Insufficient remuneration.
Tawhai v Govorko & Anor  NZHC 2874 expands on these four requirements to aid understanding.
“Work or services” encompasses both the normal definition of the terms and wider constructions including companionship, affection, and emotional support. In such cases, what is provided must go beyond what would normally be expected of a family member/friend.
“An express or implied promise” must amount to an intention to reward in the form of a testamentary provision for the claimant. Such an intention could be an express statement or implied - this has been interpreted widely where a plain case is presented.
The ‘causal link’ required is that the promise must be intended as a reward for the work or services provided. Where there is a promise to make some testamentary provision for the claimant, but there is no link to the work or services provided, the claim will fail.
The final requirement of insufficient remuneration means the claimant could not have been otherwise compensated for the work or services provided. For example, in Tawhai there was a promise to “get the lot”, yet the claimant only received approximately half of the estate. This was considered a failure to fulfil the promise made.
What will the Court consider?
In addition to the four requirements above, the Court will also consider a number of other factors specific to the particular circumstances. Factors the Court will consider include:
- The situation in which the promise was made;
- The work that was carried out;
- The value of the work that was carried out;
- The value of the promise made;
- The value of the deceased’s estate; and
- Whether there are any other claims against the estate (and if so, the nature and value of those claims).
So how does all of this apply to you?
Due to the strict requirements that a Court must prove in order to satisfy a testamentary promises claim, it can be very difficult for someone to access the money that you have promised them. In some instances, there is not enough evidence to prove the claim existed and the claimant received nothing. The process of making a testamentary promises claim can also be quite an expensive and time consuming process.
If there is a specific person that you would like to leave money to when you pass away, whether it be for providing services or otherwise, the best option is to reflect this in a will and to discuss your options with a lawyer.
Hayley is a Senior Solicitor in our Asset Planning Team and can be contacted on 07 958 7472.
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