Many changes, both physical and mental, will come as you age; perhaps you are already thinking about organising your estate in preparation for your passing. Wills can be considered the best way of leaving one last important message for your loved ones, as well as ensuring that your assets are managed or divided as you wish. No matter if this is a new thought for you, or if you’ve been tossing it up for a while now, here's a quick guide to wills in NZ and to get yours done.
What is a will?
Simply put, a will is a legal document which states your final requests and intentions on how your estate (all assets you own) is to be distributed, as well as outlining the care for your children who are still minors. It is also fairly flexible in that you can stipulate conditions to be fulfilled or unsettled affairs to be taken care of by remaining relatives in order to receive your inheritance. Although wills cannot cover and prepare for every possible scenario, they are immensely helpful in letting your final wishes be satisfied, and taking decisions into your own hand beforehand rather than letting court rulings dictate certain procedures after your passing.
A will must state two important people — an ‘executor’ and a ‘trustee’, which can be the same person. As the name implies, the legal executor you appoint is the person that is responsible for carrying out the instructions and wishes in your will. This usually also involves other duties such as gathering all necessary information about your estate and assets, managing the distribution of your assets, as well as organising your funeral/cremation. Further information is detailed at NZ Law. The trustee is responsible for holding and managing assets held in a trust that arises out of your will, such as those allocated to a minor. It is their duty to oversee the trust, upholding the terms of the will, and paying out assets to the beneficiary as or when appropriate. Further information on eligibility and responsibilities of trustees can be found here.
The executor and trustee of a will does not have to be individuals, and can instead be several people to help divide the burden and responsibilities, or they can be professional advisers such as lawyers. Upon your passing, the appointed executor of your will must first apply for “probate”. Probate involves legal recognition of your will as a public document in court, which recognises that the executor has the right to carry out the duties of the will. In other words, having probate granted gives the executor the legal authority to do his/her responsibilities over the will.
Why are wills important?
Wills are common in almost all countries for good reason, and New Zealand is no exception. In fact, only around 1,500 people pass in New Zealand each year without a will out of 33,810 deaths. There are many important reasons to write a will, both for yourself and for the people you care about.
If you pass without a will, your estate will be handled by the government through the court, which will usually divide assets by monetary value to a list of relevant beneficiaries as outlined by the law. This means that estranged relatives, or those you would not normally trust or want to give assets to, will be able receive a portion of your estate proportionate to their relationship to you. Having a will ensures that your assets are distributed to those you have specified, and excludes others you name from receiving any, as well as allowing distribution in exact proportions as you see fit.
Wills also allow you to do many personal or non financial actions, such as leaving sentimental/meaningful gifts to certain people or organisations, personal instructions on matters you would like settled such as your funeral, and custom requests you may want fulfilled within reason. Other critical instructions can be included such as who you would like to be responsible for care of your children, amongst many other responsibilities within the flexible boundaries of a will. Note that these responsibilities written in your will are not a legal obligation to people you assign them to, so make sure to speak with others beforehand to ensure both parties' wishes are captured in your will.
Overall, as it is almost impossible to predict your exact time of passing, having a will is a crucial backup to guarantee that all your matters will be settled and that your loved ones are cared for appropriately.
How do I get my will done?
It is important to have a recent will that will be deemed valid, and one that is reviewed by a professional. There are many ways to get your will done: you can get one drafted by a professional lawyer or a trustee company, employ the advice of one in writing your will, or you can write your own will with your own knowledge or a self-service kit provided by companies such as Public Trust. If you choose to write your own will, it can pay off to have it reviewed by a professional to ensure that it will be valid after your passing, as mistakes can lead to probate issues or legal challenges. In fact, many lawyers or other professionals write wills for free, or can direct you to free resources to help you understand and write your own will, so it can be useful to ask around.
Best practice involves creating a ‘testamentary will’ where you sign your will in the presence of at least two witnesses, who will also sign your will to affirm its authenticity, with everyone seeing each other sign the will. This ensures that your will is legally sound, and cannot be easily challenged in the future after your passing. Witnesses can be anyone over the age of 18, which you do not need to know personally, and traditionally will not be beneficiaries of the will (do not receive any of your assets). There are cases when witnesses can also be beneficiaries, outlined further along with more information on how to make a will at Community Law NZ.
If you worry about providing for your loved ones in your absence, it can also be a good idea to take out Life insurance as early as possible to reduce the financial strain on your family. If another insurance to juggle sounds like too much to handle, or if your current insurance policies are already a pain in your side, consider trying Quashed. Quashed lets you view and manage all your insurances through one simple-to-use mobile app, helping you regain control over your insurance.
As a will is a deeply personal item, prepare ahead to spend much time writing yours, and make all efforts to consult with your loved ones, relevant people in your life, as well as with professionals. Your will is your final document, and should be one that satisfies you.