Forming a Will in New Zealand
Why should you make a will?
Everyone needs a will. If you do not have one Government, and not you, decides who gets your hard earned assets. Most of your life is spent working to build up assets to provide security for yourself and your family. Your will lets you (and not Government) decide who will receive your property and belongings after you die. Making a will is the only way in which you can make sure that your lifetime's work is passed on to the people you choose.
Your will can also detail:
Your wishes as to burial, cremation, organ donation, and life support systems
Gifts you wish to make after your death
Provisions you wish to make for pets
If your children are under the age of 18 years, your will can nominate guardians for them, to make arrangements for their maintenance and education.
Formalities vary from country to country. In New Zealand to be valid your will must be:
In writing - handwritten, typed or printed.
Signed by you at the end of the will.
Witnessed by two witnesses who must be present when you sign your will. They must also sign your will as witnesses in your presence.
If you die without a will then you die "intestate” and what happens then is like Russian roulette. The laws of the country decide who gets your property. The law provides a formula which sets out who is entitled to the property of a deceased person who does not leave a will. The formula is unlikely to distribute your assets in the way you would have wanted.
How old do I have to be to make a will?
In New Zealand you need to be 18.
Why should I consult Helmore Ayers Lawyers to draft my will?
Your will is one of the most important documents of your life and is only as good as the information you provide combined with your adviser’s knowledge of the law. Helmore Ayers Lawyers will use their experience and expertise in the law to advise the best way to structure your will and the ownership of your assets.
Helmore Ayers Lawyers will ask you additional questions such as:
Are you a beneficiary of a New Zealand discretionary trust;
Do you have a blended family?
Are you concerned that certain family members may make a claim against your estate under the Family Protection Act after your death?
Are you concerned about protecting your assets from future partners of your spouse (after you die)?
Are you concerned about protecting your assets from creditor risk?
Are you concerned about protecting your assets from the partners of your children?
Are you concerned about qualifying for a residential care subsidy?
Do you own assets that are separate from relationship property and would you like this status maintained?
With this in mind, Helmore Ayers Lawyers will draft a will and restructure the ownership of your assets to ensure your succession plan meets your objectives.
The dangers of jointly owned property
For the majority of people their home is their main asset. We know that you want to ensure that as much of your home as possible passes to your children and hence is protected from being taken by others. Here are some examples of how your home can be taken by others:
- Rest Home fees.
- Re-marriage (the new partner/spouse could end up with your house).
- Your surviving spouse having more children, diluting the share that should go to your children.
- Bankruptcy (creditors trying to get their money back).
- In the case of couples everything jointly owned passes by survivorship to the survivor regardless of what your will says. For most couples this means that only the will of the last of you is effective.
To make sure that the important wishes in your will are carried out you also need to change the ownership of all jointly owned property into ownership as tenants in common in equal shares. This legal term means simply that it no longer passes by survivorship to the last of you but passes under the terms of your will.
Be aware of trustee companies which charge you nothing to prepare your will. They do not do so out of the goodness of their hearts. They make the cost back many times over by high charges to administer your estate after your death.
Please also be aware of drafting your own will. There have been many cases where homemade wills were either unclear, not properly prepared, not properly signed or witnessed or caused an unwanted tax liability.
How can I make sure my wishes are carried out?
Your will appoints the executors and trustees who hold, manage and distribute your assets after your death, in accordance with the directions given in your will. When making a will, choosing the right executor is an important decision.
You can name one or more person(s) to act as executor(s) and trustee(s). Anyone can be your executor. In New Zealand the executor must be 20 or older.
Before appointing anyone as an executor you should first ask them if they are prepared to take on that responsibility after your death. The duties expected of an executor can be difficult, demanding and time consuming.
In most cases, an executor will require legal or other professional representation or advice which of course involves costs and liabilities to the estate. Your chosen executor should be aware of the legal responsibilities and have some understanding of accounting, business practices and taxation matters.
Your partner will normally be appointed by you as the sole executor and trustee if they survive you and you are leaving all of your assets to your partner.
If your partner dies before you your adult children (i.e. those aged 20 or over) will normally be appointed by you as the only executors if you consider that they are then old enough and wise enough to carry out these responsibilities.
You can also appoint one or more adults whom you trust (either in addition to or instead of your partner and/or children) to be the executors and trustees of your will. Examples of when this is desirable are:
- If your partner or children need help to carry out the terms of the will, or
- If you believe there should be an outside person to make sure that the terms of your will are followed.
An outside trustee can also assist in sorting out any disagreements that may arise between the trustees. Choices of outside trustees include:
A close family friend or friends.
A relative or relatives.
Lawyers and/or accountants. You can appoint "the partners of" a law firm or accounting firm as trustees e.g. "the partners of Helmore Ayers Lawyers". Professionals usually charge on a time basis to administer your estate.
Statutory trustee companies. You need to obtain details of their estate administration costs, as some trustee companies charge a percentage of the value of your estate, plus other charges. Such fees are often more than lawyers would charge.
Being an executor and trustee is a very responsible position. The executor has to obtain probate of the will from a High Court of New Zealand. Probate is the certificate granted by a court to confirm that the will of a deceased person has been proved and registered in the court and that a right to administer their effects has been granted to the executor proving the will. The executor then pays any taxes, debts or expenses before finally distributing the balance to the beneficiaries named in your will. You can provide in your will that the executor is to be paid for his or her work as executor.
Can I leave my assets to anyone?
Yes your assets can be left to anyone. However if you do not make proper provision for your husband or wife, or in New Zealand your partner, or your children (particularly if they are dependent), they could challenge your will. This is an area of law upon which you need to take detailed legal advice if you do not wish to leave assets to your partner or one or more of your children.
Can I change my will if my circumstances change?
You can change your will at any time. If your circumstances change in any way, you should alter your will. However, you cannot make the alteration by, for instance, crossing something out on the original will and writing in your new wishes.
In fact, you should review your own circumstances and your will every couple of years.
What happens to my will if I marry or divorce?
In New Zealand any will made before you get married will be automatically revoked (cancelled) when you marry, unless it is expressly stated in the will that it was made in contemplation of marriage.
Before you marry you should therefore make a new will containing a clause saying that it is made in contemplation of your marriage.
In New Zealand any gift or appointment (such as an executor or guardian) in favour of a former spouse in your will is automatically revoked (cancelled) when your marriage is dissolved. Dissolution is the Court process to obtain a divorce.
You should always make a new will if you are divorced or are separated.
From more information please contact Peter O’Dea, Partner of Helmore Ayers Lawyers to arrange a no-obligation chat about how this relates to you. Phone 03 3665086 or use the contact form below.
LAWYERS | CHRISTCHURCH
Phone 03 366 5086
38 Birmingham Drive, Riccarton, Christchurch 8440
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