things to know about wills

10 Things you may not know about wills but should

Mar 9, 2021 2:13:15 PM / by HealthCarePlus

Most of us don’t like to think about what happens after we pass on. Avoiding that uncomfortable topic, though, is part of why roughly 1,500 New Zealanders die intestate, or without a will, every year.

Wills allow you to decide exactly what happens to your assets, and how those should be passed on to your heirs, which is an important part of ensuring that the people you care about most are taken care of after you are gone.

 

1. If you don’t have a will, your assets do not simply go to your next of kin

The property of a person who dies without a will is divided among a default set of beneficiaries according to the law. Whether, and how much of, the estate is given to parents, children, spouses, siblings, or extended family members depends on the deceased’s marital status, whether they have children from a current or previous marriage, and other factors. In order to determine exactly how assets are split between recipients, or to include or exclude anyone, it’s essential to prepare a properly signed and witnessed will.

 

2. Wills are useful and affordable for everyone

Many people die without a will because they think they don’t have the assets to justify one, or they think they’re too expensive to set up. This is a major misconception. While wills are important and often complex legal documents that need to pass legal scrutiny before they can be executed, getting the support of legal counsel in writing a will is not as expensive as many suspect. The legal fees involved in professionally preparing a simple will often be around $350 to $500. 

However, through our partnership with Public Trust it's even more affordable...You can create a comprehensive online will from as little as $169 and as a HealthCarePlus Member they will take another 15% off the overall price.  

 

3. You can draw up a 'Living Will' too 

A living will is designed for situations where someone is no longer able to express informed consent, for example when someone is suffering from a severe medical condition. This is especially useful in helping loved ones and medical professionals make treatment decisions in accordance with your wishes. In New Zealand, living wills are not legally binding documents, and are no substitute for an enduring power of attorney, which empowers someone to manage your personal or financial matters on your behalf.

 

4. Assets don’t need to be left to particular individuals

Simply dividing assets between beneficiaries isn’t always the best solution, particularly if the heirs are minors, or if one or more of the beneficiaries are mentally disabled and unable to make financial decisions. To ensure that the intended recipients are taken care of, it can be safer and more effective to place assets in a trust. The trustees can then manage those assets and their disbursal to see to the needs of their intended beneficiaries on the deceased’s behalf.

5. Trustees can help manage specific tasks

Typically, the executor of a will is responsible for getting probate, using the estate to pay for expenses and debts, keeping accounts, and generally executing the will. This also includes making funeral arrangements. In many cases, that is a lot to ask of someone who has just lost a loved one.

By setting part of the estate aside in a trust, the will-maker can empower a separate trustee to use those assets to manage funeral arrangements, and personal or professional financial matters such as paying off outstanding debts.



6. Wills can become invalid over time

A will that is valid when it is first written won’t always do the job when the time comes. After the will-maker’s death, the executor needs to go to court to get probate before the will can be executed.

This is because major life events may invalidate the will. Specifically, when a will-maker enters into a marriage, civil union, or de facto relationship, their partner gains a legal right to some of their assets.

Similarly, when such a relationship ends, they lose the right to those assets, and the will should be updated to reflect this. Depending on the particulars of the will and the situation, a failure to update the will can render part or all of it invalid.

 

7. Your will can be contested in court

A will is meant to clear up any ambiguity about what happens to the estate of the will-maker, but that isn’t how things always work out in the real world. If someone can successfully make a claim that the will is invalid, assets might simply be distributed as if no will existed at all.

Additionally, someone who the deceased had a responsibility to, and who believes that the will doesn’t make adequate provisions for them, can challenge an otherwise valid will in court to change it. A spouse or partner can also issue a similar challenge under the Property (Relationships) Act if they aren’t satisfied with what they have been left.

 

8. Will-makers should always speak with loved ones before assigning responsibilities

No one is legally obligated to accept responsibilities given to them in a will. This means that someone who is named to be the executor of the will, or to become the legal guardian of the deceased’s children, is not compelled to accept the responsibility.

There are, of course, legal processes to pass these responsibilities on to someone else. In order to have a voice in who finally becomes a guardian or an executor, it’s important to both speak with those individuals before naming them in the will, and to name one or more alternatives if they change their minds when the time comes.

On its face, a will is simply a way to make your wishes known regarding what should happen to your estate after your death. A well-written will, however, is more than that. It allows you to ensure that your estate is managed or divided in the way that you see fit, that your loved ones are taken care of, and that their future is provided for.

 

9. Review Regularly

It's really important to review your will regularly, especially after any significant events or changes in your life like welcoming a new baby, ending or starting a relationship and buying or selling a home or business.

 

10. Life Insurance Beneficiary

If you have a life insurance policy you need to ensure that you have nominated a beneficiary even if you have a will, as unless you have nominated a Beneficiary, the proceeds of the insurance policy will be payable to the estate and this may take many months or even years to finalise.  This delay is likely to place the surviving dependents in a dire financial situation.

 

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Tags: Estate Planning