We live in a fast paced world, with a focus on today and the very near future. Which is why people rarely think seriously about their Will. We’re invincible and there will be a long term, right? Formalising your last wishes shouldn’t be an afterthought because anything can happen.
Let’s meet William. He’s 29 and loves to travel and surf. He has an amazing surfboard collection, and has been saving for a house. He also has $25,000 in his KiwiSaver fund.
William made a Will just prior to getting married to his partner Fortune – they have a child together. Life can take lots of twists and turns so let’s look at different scenarios should William’s circumstances change, or worse, he meets his maker.
Marriage and William’s Will
William’s Will was not made in consideration of his marriage. So under section 18 of the Wills Act 2007, whatever happens, this Will is revoked (rendered null and void) because he subsequently married Fortune. It’s the same deal if they entered into a civil union. If his Will states it is made in “contemplation of marriage” or “civil union”, then the Will is valid.
Dying without a Will
Let’s say William didn’t create his Will, but he wanted his best friend Mick to get his surfboard collection if he died. If William dies without a Will, the Administration Act 1969 applies to the distribution of his property.This means that specific people will receive a share of his property, but it may not be distributed in the manner he intended, as follows:
(a) Fortune would receive all of William’s personal chattels (including his surfboards);
(b) Fortune would receive the first $150,000 of William’s estate;
(c) Fortune would receive a 1/3 share of the residue (if any);
(d) The remainder of William’s estate (if any) would be held on Trust for his child.
Even if Fortune knew William wanted to gift his surfboards to Mick, without a Will in place, there’s no guarantee Mick would receive the surfboards. It’s Fortune’s choice.
What would happen to William’s KiwiSaver fund without a Will?
If William has no assets other than his KiwiSaver account, his provider will require Letters of Administration from the Court before they will pay out funds. This process can take up to eight months or longer if there is a dispute, and can cost up to $2,500. This additional time and cost would be avoided if William had a Will.
How does Separation impact a Will?
William has a Will and leaves all of his estate to Fortune, but then they separate. Should William update his Will? Yes, because Separation does not automatically revoke a Will. In the absence of a formal separation agreement or dissolution of marriage William will need to change his Will to exclude Fortune.
Like a Marriage Separation, the end of a de facto relationship does not automatically revoke a Will either. Again, to prevent gifts passing to Fortune, William needs to change his Will.
The moral here is, create a Will that is on solid ground and keep it updated. We’re known for our thoroughness and paying attention to the details, to ensure the best outcome for our clients. For help with forming and editing Wills, please contact our Family or General teams.