Not having a will is one common shortcoming we regularly see. So is having an out of date will. Most people don’t understand how important a will is.

Not leaving a will is almost certain to leave problems for your family. Setting up Enduring Powers of Attorney at the same time is often overlooked, despite its importance. So, take the time to draft a will no matter your age, financial situation, or marital status. A crucial reason to determine whether you need a will or not is to list your assets. These may include savings, vehicles, and investments like KiwiSaver. If the total value of these assets exceeds $15,000, it’s essential to have a will.

Understand the Terminology

1. Assets – Everything you own and/or control, including bank accounts, KiwiSaver, vehicles, shares, land, houses which you intend to leave in a will. The threshold of value is $15,000.
2. Estate – Everything that a deceased person owns or controls, including debts and liabilities. An estate is simply the value of the assets less the liabilities. 
3. Will maker – the person who has made the will. They must be 18 years old or over and of sound mind. Formerly known as the “testator”.
4. Executor – the person or company you chose to control and distribute your estate. They are appointed in a will to administer and distribute the will-maker’s estate according to the instructions in the will. An executor can also be a beneficiary with the will. 
5. Beneficiary – a person, organisation or legal entity who receives money or other benefits in your will, i.e. the recipient of an item, money or property.
6. Probate – A Court order that establishes that a will is valid. The High Court gives the executor authority to deal with the estate and hand out property as set out in the will. Probate is required if a single asset in the estate is worth $15,000 or more.

What Does a Will Actually Do?

A will is an important legal document that lets you decide how you want your estate (assets) to be distributed. You may have a little wealth or be early in your journey to build it. A will ensures that those left behind will carry out your plans for your assets. It also provides necessary access to funds for those who need them. A will specifies guardianship of your children and those who depend on you.

Many of our clients engage us when buying their first home and getting life insurance. It’s at this juncture that we advise them to complete their will. Without a will, the surviving partner may face long waits to access life insurance payouts and bank accounts. This can cause delays in vital tasks like paying the mortgage and funeral expenses. Having a will helps a lot. It eases this tough time and ensures a smoother transition.

Enduring Powers of Attorney (EPAs) Explained

An Enduring Power of Attorney (EPA) lets someone you trust make decisions for you if you can’t. If you are briefly incapacitated (e.g., unconscious after an accident), someone needs to decide for you. These could be urgent financial choices or relate to your medical care. In EPAs, you record who you want to make these decisions. They do so temporarily until you are well enough to make them yourself. A lawyer must prepare Enduring Powers of Attorney.

Ensuring Your Will is Valid and Up to Date

Ensuring your will is both valid and up to date is crucial for ensuring your wishes are accurately reflected and legally enforceable. For your will to be valid in the eyes of the law, it must be written and signed by you. Two people who cannot be beneficiaries must also witness it. Also, if you are updating your will because of changes in your life, like a new partner, children, or business relationship, you should include a paragraph saying ‘I revoke all my earlier wills’ to clarify your intentions.

What if There is No Will?

If the deceased didn’t leave a will, they’re said to have died “intestate”. If there isn’t a will, someone needs to apply to the High Court for an order entitling them to deal with the estate. The person given authority to deal with the estate is then called “the administrator. Without a will, you technically could have finalised and distributed the estate within six months after getting administration. However, this is very unlikely. It’s the case if there are high value assets, property, or a company involved, for example. The time from dying without a will to being granted administration can be many years. Then, there is the distribution of property from the estate.

Dying without a will is more complicated and costly than a probate application. When there is no will, this makes things difficult for your loved ones. It affects life insurance payments and family access to your money for expenses like funerals.

We Have a Family Trust, So We Don’t Need a Will!

This is generally not the case. Many people with a trust believe that they do not need a will because the trust owns their assets. Most valuable assets will likely be owned by the trust. But, some will be in your name. For example, KiwiSaver, bank accounts, vehicles, sports equipment and jewellery.

Having a will remains important even if a trust owns most of your assets.

Where Should We Keep Our Will?

Once you sign your will, you need to keep it safe. Tell your executors where to find it and keep the original. Your executors will need it to get a grant of probate after you die. If a lawyer helped you write your will they will usually keep a copy free of charge. It’s also important that the original is not tampered with. This means no staples removed or re-stapled, and no damage.

Conclusion

Having a will is crucial. It ensures that your wishes are legally documented and upheld. This provides clarity and peace of mind for you and your family. A will also makes it easy to access funds and assets. It streamlines financial planning and ensures that you preserve your legacy as you intend.

Contact Meta Financial Solutions today for holistic financial advice. This includes guidance on the right avenue for your situation to make or update your will.

Further reading:

https://metafinancial.co.nz/exploring-life-and-health-insurance-part-1/

https://metafinancial.co.nz/simplified-financial-planning-for-achieving-financial-freedom/

https://www.publictrust.co.nz/products-and-services/making-a-will/