For many of us, thinking about creating a Will can be likened to a dentist appointment – easy to put off. After all, it forces us to confront our own mortality – a concept that can be uncomfortable for some. Yet, the reality is that failing to plan for the inevitable can lead to unintended outcomes that are in stark contrast to our intentions or what we had envisioned.
The Foundation of Estate Planning
At its core, a Will is a legally binding document that outlines your wishes for distributing your assets and managing your affairs after you pass away. It is the foundation of any solid estate plan, ensuring that your estate –large or small– is transferred according to your specific instructions. Without a Will, the distribution of your estate falls under New Zealand’s laws of intestacy, which may not align with your personal relationships or how you would like your beneficiaries looked after.
Dying Intestate – How is an Estate Distributed?
When someone in New Zealand passes away without a valid Will, they are said to have died “intestate.” In such cases, the law sets out a formula, outlined in Section 77 of the Administration Act 1969, as to how their assets will be divided. The act prioritises next of kin, starting with the spouse or civil partner, who receives the personal chattels along with one-third of any of the remaining estate. The children of the deceased then divide the remaining two-thirds of the estate equally. If there are no children, the spouse or civil partner receives the entire estate.
Should there be no spouse or children, the estate is distributed to other relatives in descending order of priority: parents, siblings, nieces and nephews, and then more distant relatives. If no relatives can be found, the entire estate defaults to the Crown under the principle of “Bona Vacantia.”
This default system highlights the importance of having a Will to ensure that your estate is distributed according to your wishes rather than a predetermined set of rules, which may not align with your personal relationships or intentions.
Protecting Your Childrens’ Future
For many parents, the number one concern when it comes to estate planning is ensuring their children are cared and provided for, both emotionally and financially. A thoughtfully prepared Will allows you to appoint a guardian for your minor children, assigning their upbringing into the hands of someone you trust. This decision shouldn’t be taken lightly, as it will shape your children’s future in the event of your passing.
Choosing Your Estate’s Champions
Selecting the right people to carry out the wishes of your Will is crucial. Your executor, appointed by you, is responsible for administering your Will which can include navigating legal procedures, resolving outstanding debt and overseeing the distribution of your assets according to your wishes. Conversely, your trustee (or trustees) would be responsible for managing any ongoing trusts you establish for the benefit of your beneficiaries.
The executor and potential trustee roles require individuals who are not only trustworthy, but also capable of handling sometimes complicated legal and financial issues. Ideally, your executor and trustee should be people you trust implicitly and have the necessary skills and time to dedicate to these responsibilities. At Lundons Law we believe that when it comes to appointing the executor or trustees for your estate, it’s not just about naming a friend or family member out of obligation– it’s about thoughtfully considering who has the right capability to see your wishes through.
Can My Will Be Contested?
In short, yes, a Will can be contested. Typically, those who contest a Will are close family members or beneficiaries who believe there has been some form of error or injustice in how the Will was made or executed. The most common reasons why a Will may be contested, or challenged include:
- Lack of Capacity Claim: The person making the Will did not have the required mental capacity at the time of making their Will.
- Undue Influence Claim: The person making the Will was coerced to make decisions they would not normally have made when making their Will.
- Testamentary Promises Claim: When someone believes they haven’t received what they were promised.
- Family Protection Claim: When someone believes they have not been properly provided for.
When drafting a Will, it is crucial to ensure that it is legally robust to prevent potential contests or challenges. Consulting with a legal professional who specialises in estate planning and law is essential to ensuring that your Will is valid and will stand up against any possible disputes.
Keeping Your Will Up to Date
Life changes often and your Will should evolve with it. Significant life events such as marriage, divorce, the birth of a child, or the addition of new assets e.g. purchasing new property, should all trigger a review and possible update of your Will. Sadly, an outdated Will has the potential to lead to family disputes and a distribution of assets that do not reflect your current wishes.
Investing in Peace of Mind – How much does it cost?
The cost of drafting a Will can vary depending on how complex or simple your situation is. As an indication, a simple Will would start at $700+gst. However, for individuals seeking a more tailored approach or possessing more intricate estates, the process may require more specialised attention and as such, the cost would be higher.
If you are embarking on the purchase of your first home and engaged with Lundons Law, we offer the opportunity to document a simple Will at no charge.
The Unintended Consequences of Delay
While the process and cost of creating a Will may seem initially daunting, the consequences of not having one in place are far more severe. Without a valid Will, the distribution of your assets is left entirely in the hands of the state as outlined above. Furthermore, the lack of a Will can also lead to unnecessary stress and financial burdens for your loved ones during an already difficult time. They may be forced to handle complex legal proceedings, pay additional legal fees, and potentially face challenges in accessing your assets at a time of loss.
Unfortunately, we have witnessed the immense emotional and financial toll that someone dying without a Will (intestate) can create, and it’s a situation that could have been easily avoided with some proactive planning.
Taking Control of Your Legacy
Creating a Will is not just about asset distribution, it’s an act of love and responsibility which affirms your values, gives your loved one’s peace of mind, and ultimately ensures your wishes are respected long after you have gone.
Lundons Law are dedicated to guiding you through every step of the Will planning process. From assisting you in identifying your assets and intended beneficiaries, to selecting the right executors and trustees – our goal is to ensure that your Will is tailored to your circumstances and protects your legacy for generations to come.
We urge you not to leave your family’s future to chance. Contact the team at Lundons Law and take the first step towards protecting those you love most.
Click here to read more about how Lundon’s Law can assist you with estate planning.