A Will is one of the most important documents you can make but most of us delay making one.  

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Death or serious illness unfortunately can come unexpectedly and having a Will in place can relieve financial and emotional strain on your family after your death.  

Good estate planning reduces the anxiety of those left behind, protects your surviving family, and avoids costly legal bills after death.  You will have heard horror stories of Family Protection claims and estates that took years to finalise. This is usually because people have not considered the consequences of their actions, or because of a lack of action, in their lifetime.

So, what is a Will?

A Will is a written document which contains instructions about what you want done with your property when you die.  There are a few formal legal requirements for a Will.  It usually must be:

• In writing, however recently a video recording has been able to be probated as a Will;
• Signed by you;
• Witnessed by two other people not included in the Will; and
• Intended to take effect as a Will.

A Will should include what you want to leave to your spouse, partner, de facto partner, children, charities etc. You may also have specific directions as to what happens to any pets you may have.

It is personal to you and should cover all of your assets (including, but not limited to, personal items, cars, land interests, money, KiwiSaver and insurance proceeds).

If you are over 18 years of age and of sound mind, you can make a Will.  Many people tell us that they have no assets therefore there is no need for a Will however that is not correct - everyone has assets that can, and should, be dealt with pursuant to a Will.  

A lawyer's job is to interpret your wishes and to draft a Will that accords with your wishes.  However, before signing a Will, be sure you understand what has been written and ask your lawyer to clarify anything you don't understand.

As your life changes you should also review your Will.  We would suggest a minimum of every 5 years or on a death, separation, marriage, birth of a child, new partner etc. You also should consider a review of your Will if your assets increase or reduce.   A marriage or civil union automatically revokes a Will, unless it was made in contemplation of your marriage.  If you separate, the provisions in your Will remain, until formal separation orders are made or your relationship is dissolved.  Entering into a de facto relationship does not revoke a Will.

What happens if you die and don’t have a Will?

This scenario is covered under the Administration Act and may mean that the people you want to receive, won’t receive anything from your estate.

What you generally need to include when you are drafting a will:

‍Executor and trustee - The person responsible for carrying out your wishes.  You can appoint anyone over the age of 18 years, but it should be a person you can trust that will administer your estate.   We recommend you appoint at least two people in this role, in case one dies or is unable to act.  Your executor does not need to be a solicitor, however, a solicitor can assist with administration of an estate.

Guardians - If you have children, guardians are the most important appointment.  They are the people appointed to look after your children. If you are separated, your spouse would usually have day-to-day care in the event you passed away but you can appoint a Guardian to assist with decisions that you would usually have helped make if you were alive.

Assets - The next thing is to consider your assets and your liabilities and what you want to happen to your assets.  We recommend you complete a list of assets, their value at the time of making a Will and how those assets are owned (for example in your name, company name, jointly or as tenants in common). You may also leave your personal assets to your executor and trustee to distribute as per any intentions you have made known in your lifetime.

A lawyer can help you decide how to deal with the rest of your estate depending on your circumstances.

For example, if what you want in the future is to leave everything to your spouse, then you need to ensure everything is jointly owned: your home, your bank accounts, motor vehicles etc.  This ensures that when you die, it is a simple process to transfer ownership to the survivor. You only need a death certificate and some paperwork.

There are two common legal forms of land property ownership in New Zealand:

Joint tenants

Many couples own their properties as Joint Tenants. The significant feature of this type of ownership is that when one person passes away, their share will automatically pass to the other party through "survivorship". For example, if the wife passes away, her share will automatically pass to her husband who will have full ownership of the property. If you are a joint tenant you cannot formally leave your interest in the property in your Will, as the joint tenancy overrides any provision in a Will.

As the joint property does not form part of your estate, you may not require Probate of your Will.  You must apply for probate if your personal assets are worth more than $15,000. This does not include jointly owned assets.  This can be a cost-saving to your estate.

Tenants in common

Another form of legal ownership is where two (or more) people own property together as tenants in common. This may be in equal or unequal shares.

The rule of survivorship does not apply in this instance and as a consequence what happens to your share of the property on your death depends entirely on what you state in your Will. It is therefore important that your Will is updated to deal with your interest in the property.

Life interest

Quite often a couple will leave a "Life Interest" in their share of the property to their spouse in their Will. A Life Interest allows your spouse to live in your share of the property for the remainder of his or her lifetime (and to move if needed) but upon the ultimate death of the survivor, your share of the property then goes to the final or residuary beneficiaries of your Will e.g. your children. This arrangement is useful for people in a second relationship with children from a previous relationship as they can ensure their partner has somewhere to live while protecting their assets for their children.

Life insurance

If you own a life insurance policy and want a named individual to receive the benefit when you die, then you can change the ownership of the policy to the person you want to inherit on the actual policy. This means that when you die, the proceeds will go to that person without the need to apply for probate.

Things to consider

The above matters can all be achieved without a Will, but we would recommend that you complete a Will to confirm the above and also to confirm what would happen in an alternative scenario. For example, if you and your spouse both die in a car accident, the oldest person is deemed to have died first and then the estate would all pass to the younger person.  If that person has died, who is to inherit?

When considering your future, you should also think about the consequences of leaving everything to your partner/spouse. What if your partner remarries or lives in a de facto relationship?  Their new partner may inherit meaning that your children may lose out.  

Thought must therefore be given as to what arrangement best suits your current situation, taking into account any plans you may have for the future.

You should also consider and include funeral directions - whether or not you are to be buried or cremated.  

Next steps

Your Will should be kept where it can be easily found, for example with your lawyers or with personal papers at home.  Let your family know where your current Will can be located so that when you pass away, your Will can be found and your wishes carried out.

If you need help to create or amend your Will or have questions about any aspect of your estate planning, our team is here to help. Make an appointment to prepare your Will so you can protect your surviving family, and avoid costly legal bills after your death.

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By Nola McGowan and Natasha Allen

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