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Setting yourself and your family up for the future
Don’t put off making a Will before it’s too late. Often, it’s only planning for a significant family holiday or after a life event that people consider the contents of their Will.
It is essential to think about what if something happens? From big decisions, like who do we want to look after our children, to more practical considerations such as:
- Do our children know where our wills are held and who to contact if needed?
- Does someone know the passwords to key accounts?
For those in their later years it is even more important to have up to date wills and Enduring Powers of Attorney (EPAs) because retirement villages require them.
Careful consideration is also needed to ensure that your will is right for your family situation – for example, a blended family – and if you have a Family Trust.
Here is an essential check list to ensure your will is fit for purpose and does what you want it to do:
Review your Will
Assess how your wishes and circumstances have changed or are likely to change.
Who are your executors?
Executors are responsible for administering your estate, according to your will. Often people reconsider who their executors should be because those long-standing friends or relatives who were the executors under existing wills may have developed health problems, or no longer able to cope with requirements of acting as executors given their own advancing years.
Do you need a relationship property agreement?
If you and your spouse / de-facto partner have children from a previous relationship, there is a balancing exercise between making provision for the survivor of you and your respective children.
The terms of a Contracting Out Agreement (commonly referred to as “pre-nuptial agreements”) will be relevant to this exercise. Some assets may be protected for each other’s respective children rather than jointly owned and passing to the survivor, which should be reflected in your will.
In family you trust
Family Trusts are very common in New Zealand. Often a Trust owns a family home, other family assets and company shares. Assets subject to the Trust are owned by the Trustees for the benefit of discretionary and final beneficiaries recorded in the Trust Deed.
Trust assets are therefore not dealt with in your will. However, your wishes in a will and Family Trust need to be considered together, including wishes you may leave to the Trustees. For example, your will may leave the balance of any personal assets (e.g. funds, shares) to the Trust instead of children personally.
An advantage of leaving your assets to the Trust, instead of your children personally, is to protect their inheritance from being subject to a creditor, a relationship property claim, or other means testing regimes that could apply if the assets were left to your children personally in your will.
Appoint an attorney
Enduring Power of Attorneys (EPAs) appoint an attorney to act for you when you are no longer able to make your own decisions about your property or personal care. This can be due to accident or illness. EPAs appoint an attorney(s) to act for you in property affairs (e.g. property, bank accounts). You have the option of appointing an attorney to help you make decisions about your property, whilst you still have mental capacity. This can be useful for elderly clients who have capacity but need help from their trusted attorney.
A separate EPA appoints an attorney to act for your personal care and welfare (e.g. medical and hospital care). It is very important to consider who you appoint to be your attorney, who is responsible to make decisions about your affairs if you can’t. A misconception is that your attorney can continue to sign documents after you die. However, an attorney’s authority ceases when you die. Thereafter it is the executors of your will who are responsible for administering your estate. It is prudent to put EPAs in place at the same time as your will.
These factors highlight the importance of considering your family situation at the time of making your Will and EPAs. Ultimately, this gives your spouse / partner and children reassurance that careful thought has gone into your wishes on your death.
For advice and help with wills, trusts, and EPAs, contact Renee Jensen on 09 306 0629 or [email protected] or Anthony Kuran on 09 306 0611 or [email protected].
Anthony co-hosts Future Focus with Craigs Investment Partners and UP Real Estate on Tuesday 24 September. The event will cover all aspects of retirement with an opportunity to ask key questions to help you prepare.