Why do we need a Will?
People mainly use them to write down family members they want to provide for if they die, and how they want to distribute what they own. Wills also let us specify someone we would like to look after our kids or to leave special gifts and meaningful things to people or organisations we choose. They can include special instructions for a funeral, and they typically name the person who will carry out our wishes. If we don’t have one, or if ours is not valid for some reason, what we would like to happen may not happen in reality. This could put our families into legal and financial difficulties.
Wills are something every New Zealand adult should have. Will allow you to say what you want to happen to your property after you die—even though you won’t be there to say it yourself. And yet every year, thousands of New Zealanders die without a will.
Estimates suggest that more than half of New Zealanders don’t have a will. That’s a problem. Because even though your property will still get distributed if you die without a will, it may not be in the way you want.
What does a Will cover?
Instructions in a will can include:
- partner, children, grandchildren, other family members or friends you want to provide for
- Any family trust that you wish to leave property, money, or other assets to
- Specific bequests such as cash payments, jewelry, artwork or furniture you want to leave to family members or friends
- Any charities or organisations you may want to leave money to
- Details of how you would like our funeral to be carried out
It's a good idea to set up Enduring Powers of Attorney at the same time as making a will.
What happens if you die without a will in New Zealand?
Dying without a will is known as “dying intestate.” In these situations, there’s a law (Administration Act) which decides how your property is distributed.
It describes a number of family situations you might have at your death (e.g., partner or spouse but no children or parents; partner or spouse and children but no parents; partner or spouse and parents but no children; children but no parent or spouse) and sets out the corresponding distribution of property. It also says what happens if you die without any family.
It may be that these default positions are what you’d want to happen. After all, the legislation is intended to try and provide a fair outcome for most situations. Your property won’t just disappear. It’s very likely your family will get something.
But it may not be what you’d want. For example, you may want to ensure your children receive a larger portion than what is provided for by the law. Or you may wish for them to inherit particular pieces of property, such as a family heirloom.
Dying without a will also makes things more complicated and uncertain for your family and loved ones, which is particularly tough in a time of grief. The last thing you want is to think your family members were at odds because you didn’t leave clear instructions.
Even just a will with basic instructions can be a big help. And for most wills, it’s a straightforward process. You list what you’re leaving behind, who it should go to, any instructions for your funeral, and who you’d like to carry out your wishes.
Keeping a will
If you already have a will, is it up-to-date? Does it reflect your current situation? Your financial or personal circumstances may have changed since you signed it. Whenever we go through a big life change like the birth of a child or separation, you should review your will.
For example, if you get married or enter a civil union, your will is automatically revoked unless it states otherwise or specifically says that it was made about the coming union. Other life events like the birth of children or grandchildren, or the purchase of a property, are all good reasons to check your will.
Make sure to keep a copy of the will in a safe and accessible place – and let the executor and loved ones know where it is. If your will can't be found, your last wishes can't be followed!
At Stewart Group, some of our Risk Management clients own insurance policies on their own lives. This means that at claim time with the life insured being the owner of the contract, the claim proceeds form part of their estate. So, we encourage those clients to make sure they have a Will which guides their executor as to where the ‘deceased’ would have wished the proceeds to be allocated to.