There are two certainties in this world – taxes and death. I’m not qualified to discuss taxes, so let’s chat about death.
It’s not an easy thing for us to contemplate dying. Not just because we don’t want to think about the end of our life and what that might mean. But sometimes, it is having to think about things like how our estate should or could be divided that forces us to think about difficulties within our lives that we would just rather not think about.
A will is one of the most important documents you will ever write.
Dying Without a Will
Dying without a Will is called intestacy or dying intestate. Your Estate is everything you owned at the time of your death. If you don’t own any property or real estate, and your assets do not exceed more than $15,000 from each source (such as savings, shares, Kiwisaver) then your next of kin will be able to manage and distribute your Estate without a will.
However, if you have more than $15,000 worth of assets, or you own a property, then things get more complicated.
Administering an Estate Without a Will
The law sets out who would be able to apply to the court to be able to be the administrator of your Estate. It will almost always be your surviving Partner, if you don’t have a Partner, then it will be one or more of your children. The other children need to consent to their siblings being appointed as administrator.
The administrator needs to take other steps before they can apply to the court to be appointed into the role, such as advertising for a will (even if they know you didn’t have one). When it is a male who has passed way, the administrator has to apply to the Department of Internal Affairs to make sure there are no other children registered as their child.
These extra steps mean additional time, stress and invariably, more costs.
But the main reason for having a will is to make sure that your estate passes to those you want to receive it. The law sets out how estates are divided when there is not a will. Your surviving Partner would receive $155,000 and 1/3 of the rest of your estate. Your children get the remaining 2/3. But this division may not be what you want, and it could mean that your partner is left in the difficult position of having to bring a claim against your estate for a greater share of the Estate.
If you don’t have a Partner or children, then your parents inherit your estate. If your parents have died before you, then your siblings inherit the estate equally, and again, this may not be what you want.
Where there is a Will, there is a Way
Your will does more than provide for how your assets are divided, you also need to think about things such as:
- What do I want to happen to my body when I die?
- What would I like to happen at my funeral?
- Who should I appoint to administer my will (known as the Executor)?
Those decisions merit serious thought. Here are some tips about where to start before contacting a lawyer to write your will:
- Start with the ‘smaller’ decisions. Is there a necklace or bracelet that means something to you that you want to give to a specific person?
- Are there any charities that you might like to give some money to?
- Make a list of the significant assets you own (i.e. cars, property, Kiwisaver, investments etc.)
- How is that property owned – is any of it owned with other people or is it owned by a trust?
- Make a list of your liabilities or debts.
- Think about whether you have provided money to people in the family during your lifetime – should that be repaid on death or was that a gift? Clarifying that in your will can save a lot of unhappiness and family arguments later.
- Think about who would be good at that important role of Executor of your will. If you choose a family member, think about how they all get along with one another and any potential issues between them– perhaps a professional would be better?
- Make a list of descendants or dependents you have (Partner, children, grandchildren). Think about their individual needs and circumstances – financial needs, their health, what is going on in their lives such as their relationships or jobs,
Writing a Will won’t be the most fun you’ll ever have. But you can remove or reduce additional stress and responsibility on your loved ones by taking these steps to plan your estate.
Plan a little today, so you can rest easy when the time comes.