How to make sure your Will becomes a reality

We speak to Elyse Middleton, Associate at law firm Saunders Robinson Brown about writing a Will.  

Writing a Will is one of those things you might not think about all that much – right up until you have kids. 

Once there are some adorable little ones running around with your eyes and your sassy comebacks, many parents want to ensure their assets and savings go to them should anything happen. 

So, we asked a pro. Specifically, we asked Elyse Middleton, an associate at Canterbury-based law firm Saunders Robinson Brown, about estate planning and how to go about it. 

“Estate planning is becoming a complex and varied part of people’s lives. This is because of recent updates in New Zealand Trust law and the rise of families that do not necessarily fit the more “traditional family” model,” she explained. 

Let’s take a closer look at how to make sure your estate goes where you want it to – with Elyse’s expert advice to steer us in the right direction. 

How to write a Will that ensures your children receive their inheritance

So where do you start? Elyse has three key points to keep in mind when it comes to writing a Will. 

“When thinking about what you want to happen to your assets after you die, the key is to firstly understand:

  1. What your assets are and how you own them;
  2. What your legal obligations are in providing for your spouse (or partner) and children; and
  3. Who will be responsible for managing your wishes and looking after your children.”

In other words, consider what you have, what you legally must provide, and who will be executing your Will. 

“Without understanding the above points and taking the necessary steps to ensure your assets go to the people you intend, you can risk causing family arguments that can cause breakdowns in relationships and expensive legal costs,” explains Elyse.

Keep in mind that without a Will, your spouse/partner will get all your personal chattels (including jewellery, cars, clothes, paintings and so on), the first $155,000 of your estate, and one third of anything else – your kids get the other two-thirds. That’s the baseline under the Administration Act, anyway. 

Therefore, you will need to make it crystal clear in your Will just how much of your estate you want going to your spouse/partner (if you have one), your kids, other family members, or anyone else you have in mind (such as charities, or even your fur babies). 

Trusts to protect your children's inheritance

An inheritance trust can be an effective way to safeguard your assets for the benefit of someone – or several someone’s. 

An inheritance trust can be formed in two ways. Firstly, you can form and settle assets on to a trust during your lifetime. Secondly, you can draft your Will to create a trust on your death. The reasons you wish to form a trust will determine when you should form your trust.

You could leave absolutely everything, or just specific assets (such as your family home), to your trustees to hold for the benefit of your kids and subject to their legal obligations. You can even state that you want to leave assets to any future grandchildren you might have. 

Additionally, a trust can be a good way to avoid handing over a big sum of cash or a large asset to your kids if you think they are currently too young. For example, you could state that they only receive certain assets once they reach a certain age, but still allow your trustees to use the assets for the benefit of your kids while they are young (e.g. pay for their education or day-to-day expenses). 

Ultimately, setting up a trust for your kids could be an option to protect those assets from creditors, your kids' relatives or partners, and others who might contest your Will.      

Elyse states; in regard to the use of trusts in your estate planning, “while trusts can work well for some clients, a trust does not completely protect assets from third party claims. Further, the ongoing administration costs to correctly maintain a trust can outweigh the potential benefit. If you are thinking of forming a trust, it is best to get legal advice from a trust law specialist to help you weigh up the potential benefits, the associated costs, and any risks of claim before you spend your time and money forming a trust”.

Common mistakes to avoid when writing a Will for your children's benefit

By working with a professional service, you should avoid any of the common mistakes people make when creating Wills with their kids in mind, understand your legal obligations and any risk of claim against your estate. 

That said, here are some simple errors to avoid if you’re thinking about a DIY Will.

For starters, use plain English. There’s no need to crack open a thesaurus or write a university-level thesis to explain your wishes. The clearer it is, the harder it would be for anyone to contest it. 

“Another common error is ignoring the law. The Family Protection Act states that you must provide for close family members (e.g. your children) in your Will. By leaving them out, you leave room for them to contest the Will. If you are thinking of cutting out a close family member from your Will, speak to a professional about the best way to do so and any associated risks of a claim” says Elyse. 

An important thing to also understand is what your spouse’s (or partner) rights are to your property. Unless you have a “contracting out agreement” (also widely known as a “prenup") in place saying otherwise, the terms of the Property (Relationships) Act 1976 apply, meaning your spouse/partner has claim to 50% of all relationship property – regardless of what your Will says.

Finally, every Will in New Zealand must be formalised by having two witnesses present when you sign. They must also sign your Will. It’s important to remember that both of these witnesses must be at least 20 years of age, and they cannot be beneficiaries to your Will (nor can they be a spouse or partner). 

Therefore, if your child or children are witnesses to your Will, they are not legally entitled to anything in your Will (except for a handful of specific circumstances) – even though the Will itself is still valid. This is a simple mistake to make, but one with huge consequences should you make it. 

Seeking professional advice: Working with a Wills and estates lawyer to ensure your children's financial future

Some New Zealanders will create their own Wills. It’s entirely legal to ‘DIY’ your Will, and there are plenty of simple templates out there where you can fill in the blanks, have the Will signed (correctly), and be done with it. 

But (that’s a big but), these are largely only useful for those with “basic estates”. 

From Elyse’s experience, “‘DIY’ Wills can cause numerous issues when it comes to administering the estate, whether that be due to errors within the Will, the Will not being signed correctly, or the Will-maker not fully understanding their assets nor obligations. Although it seems a ‘DIY’ Will can save you in legal costs now, the legal costs incurred by your estate in unwinding these issues can be much more than the legal costs you would have paid to have your Will drafted by a professional.”

“If you own assets worth more than $15,000.00, have a blended family with children from different relationships or you just want to make sure your assets will fall to the people you intend on your death, please reach out to a lawyer who specialises in estate planning,” says Elyse.

Expert advice will help to ensure your assets go where you want them, with little room for any real contests. A professional will ensure you’re listing your assets correctly, considering your obligations, understanding any risk of claim (if any) and will help you to word it all in a way that minimises the risk of any problems arising after your death. 

Dotting the i's and crossing the t's

Keep in mind, your Will is also where you can add your wishes for a funeral, which can be a real gift to loved ones who won’t have to make all those decisions themselves.

Speaking of funerals, OneChoice Funeral Insurance can also help to cover the cost of that funeral, so your kids don’t have to pay for it – making it another great option for protecting them financially!

Disclaimer: please note that this is general information only and may not be suitable to your situation. Please refer to a legal or financial professional for any questions regarding your Will/Estate planning.