Wills and reducing the burden on your loved ones
September is Will awareness month. A Will forms part of your estate plan which is a component of your financial strategy. If you are aged 18 or older, then you should have a Will.
We get it, talking about life after your death is not everyone’s cup of tea. Estate Planning is more about your loved ones and these safeguards echo long after we are gone. By recording your final wishes, you reduce the burden on your loved ones during an emotional time, empowering them to enable change and distribution of your estate by someone appointed and trusted by you.
A Will is a legal document that records your wishes and gives instruction for the distribution of your assets after you’re gone, specifying your funeral arrangements, who (beneficiaries) you want to benefit from your estate (personal items, money, assets) and who (executor) will be responsible for the administration of your estate. If you have dependents, then a Will should specify who will become their legal guardians. A Will needs to be kept up to date to reflect changes in life stage or major life events such as getting married, separation, divorce, having a child/children, the purchase or sale of a major asset i.e. home and/or investment property. They should also consider Kiwisaver, life insurance policies and investment portfolios.
A valid Will avoids the cost and delay of the Court appointing an administrator and loss of control over who is appointed and how the assets are distributed. Moreover, the person appointed has the power and obligation to distribute your assets in accordance with the Administration Act 1969 which has no consideration for your wishes. Your loved ones will need to apply to the High Court, which takes time, energy and money placing burden during a challenging time. Anyone can apply to be your administrator, but priority does apply in the following order which may not may not provide assurances the best person is appointed for the job: Spouse or civil union partners, children, parents, de facto parner, uncles and aunts and, if no surviving members, the Public Trust.
Anyone can contest the distribution of your assets regardless of whether you have a Will or not. Wills can be challenged if invalid or by a person you had a responsibility to provide for that believes you haven’t left them a fair share or adequate provision so it is important that you get sound advice. Notwithstanding that, the presence of a Will provides guidance for all parties and a greater chance of your loved ones being looked after once you’re gone.
Other considerations for estate planning are trusts and an enduring power of attorney. A trust may be appropriate if your affairs are more complex. An enduring power of attorney is appointed by you and enables a trusted party to make decisions for you if you lose the mental capacity to do the same whilst you are alive.
To find out more about Wills and estate planning, book a time with James Gray to talk about its value in a financial strategy and explore ways to put the best structure in place for you.
