Estate planning - more than just a Will
Protect what’s important to you by planning ahead. Make sure your loved ones are taken care of, and your assets are distributed how you want, if something were to happen to you.
Your estate can include things such as bank accounts, retirement savings and property, and is the process of ensuring that everything you own and any investments you may have are dealt with as you wish when you die or become unable to manage your affairs because of illness or injury.
An up-to-date Will is a central part of the estate planning process and an important part of your overall financial strategy. A Will is a legal document which formally spells out who will receive your assets or your 'estate' in the event of your death. It also outlines any other wishes you may have, such as instructions for your funeral. A Will is a document prepared as part of the overall estate planning process, which in turn should be part of your financial strategy.
Do you have a Will? If so, is it up-to-date and does it reflect your current situation? Perhaps your financial or personal circumstances changed since you signed it? If you have a family or other dependants, or are concerned about who will receive your assets after you die, then you need to make a Will and update it when necessary.
- allows you to be confident your affairs will be settled as you would like
- enables your estate to be administered quickly and economically
- makes the process easier for your next-of-kin.
If you don't have a Will, the legal procedures are more complicated and time consuming, which may cause unnecessary worry and expense to your family.
The law sets out the procedure for the distribution of assets for someone who does not have a Will. Not having a Will may mean that your assets could be distributed in a way that you would not have wanted.
It's also important to update your Will regularly. Ideally, you should update it every time your personal circumstances change, for example the birth or death of a family member, the buying or selling of a house or property, a change in medical condition, or the beginning or ending of a relationship.
Enduring powers of attorney
The enduring power of attorney (EPA) is a legal document that gives someone you trust the power to make decisions on your behalf if you lose the ability to make decisions yourself. There are two types of EPA; one that gives someone the power to make decisions about your health and welfare, and another for your money and property.
The Citizens Advice Bureau shares some things to consider when choosing to give someone power of attorney. You can setup an enduring power of attorney through your lawyer or trustee corporation. You can read more here.
Here are a few things to consider when planning your estate:
- How should you structure your financial affairs to retain your family assets within the family?
- Who may be able to lay claim to your estate, even if they are not a beneficiary in your Will?
- Will you need to make special provision for any beneficiaries?
- Have you recently married, separated or divorced?
- Have you chosen a suitable executor?
- Is your executor still willing and able to act on your behalf?
- Do you have a Power of Attorney?
(Visit sorted.org.nz/get-sorted/cover-your-people-money-stuff for more information).
This checklist is not exhaustive, but highlights some of the important issues that you may need to consider when reviewing your estate plan. If you don't know the answers to any of these questions or have doubts about your current estate plan, talk to your lawyer or a trustee company.
23 March 2020