Why do you need a Will?
Do you have a bank account? Do you have a KiwiSaver account, own your own home or have life insurance in your own name? If you answered yes to any of these questions, then you need a Will.
If you don’t have a Will then when you die these assets will be distributed pursuant to the Administration Act 1969 and this depends on your family circumstances and whether you have a spouse, children, parents or maybe none of these relationships.
For example, if you are married with three children and died without a Will, and your only asset was a life insurance policy worth $400,000 this asset would be distributed with the first $155,000 going to your wife and then the balance of $245,000 split 2/3 to your three children and the remaining 1/3 to your wife. Whereas if you are a single person (with a $400k insurance policy) no partner, no children and both your parents have passed away, then your entire estate would go to your siblings.
We have created a Will assessment tool which helps you work out what may apply but each family is different and it depends on the situation and how assets are owned. Putting in place a Will means when you die administration of your assets is a lot more straight forward and assets are distributed according to your Will.
The first thing to consider when completing your Will is who do you want to appoint as your executor/trustee? This is the person in charge of making sure your assets are distributed according to your Will instructions. They organise your funeral instructions, pay your debts and distribute the assets to your named beneficiaries. The executor/trustee usually engages a solicitor to prepare the estate administration documents.
A parent can name a person in their Will to be a testamentary guardian if the parent dies. Testamentary guardians automatically become guardians once the parent dies. They don’t need to apply to the court. Testamentary guardians have the same responsibilities as other guardians, but they don’t have rights to the child's day-to-day care. If they want this, they can apply to the Family Court.
What are your assets? It’s important to understand the difference between jointly owned assets and assets held in your own name. The assets in your own name are those that are dealt with under your Will when you die. If you have a joint bank account however then these assets or bank accounts will pass automatically to the survivor and are not dealt with under the Will. KiwiSaver proceeds are an example of an asset in your own name. You cannot move in them into joint names and when you die these funds would be dealt with under your Will.
Who do you want to give your assets to? Your partner? Children? At what age do your children receive their inheritance? A gift to a charity? What if you have a blended family, do you want to leave everything to your new partner? If you do and they remarry these assets could possibly skip going to your children.
Potentially all children can make a claim against an estate if they feel the deceased parent did not meet their moral obligation to provide in some way for their child or children. This is why getting good legal advice and explaining your family picture is extremely important when completing a Will.
Other things to consider are that from the date of your marriage/civil union your Will automatically revokes – unless your Will was made “in contemplation of marriage”. Equally as important is that in the event you separate from your spouse or partner, you will need to review your Will immediately otherwise your property could still be paid out to an ex-partner.
The benefit of completing a Will is that you will provide your family with clear instructions regarding division of your property on your death and enable them to complete this with confidence that those were your last wishes.
If you feel you could use some specialist advice, don’t hesitate to contact the Trusts & Wealth Protection Team.
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