5, of many, reasons why you need a Will

29th May by Fiona King

5, of many, reasons why you need a Will

Fiona King, Business Development Manager at Perpetual Guardian, breaks down why you need a Will.

Fiona King, Business Development Manager at Perpetual Guardian, breaks down why you need a Will.

Research has shown, time and time again, that Kiwis are more likely to get their Wills set up after a life changing event. From getting married to having your first child or buying a house, these are the occasions that often prompt us to think about the future. Think these are the only reasons to get a Will? Find out why you might just want to consider protecting your future now.

1. You have a KiwiSaver that is at, or about to hit, $15,000

According to the Financial Markets Authority’s annual KiwiSaver report, the average person’s balance was $15,000 in 2017.

Now, a key thing a lot of people won’t know is that if your KiwiSaver is at or above $15,000 when you pass away, you will need to apply for estate administration from the Court before these funds are released. This could cost up to $2,500 and can take seven or eight months. In cases where there is a dispute, it can be a longer and more expensive process. 

In short, if your KiwiSaver is at or above $15,000, it will be cheaper and quicker for your family if you have a Will.

2. You are in a long-term relationship

In the 2013 Census, over 400,000 New Zealanders were in de-facto relationships. This number is set to increase, with fewer Kiwis getting married these days and many putting off getting married until later on.

As we see this rise in relationships, it’s important to know that being in a relationship for more than three years actually has legal implications.

Once you have been together for three years, you are de-facto partners in the eyes of the law. Other factors, like having children together, might also make you de-facto partners. This means your partner has similar rights to your assets as a married spouse would; something that is made even more complicated if you have an ex from a previous long-term relationship that might want to claim something. If you have a Will, you are able to state who you want to get your possessions and assets. Without one, it is up to the law to decide.

The law doesn’t take your personal preferences into account unless you have made them clear in a Will.

3. You have children

A big misconception I often hear is that if you and your partner pass away, your children will automatically be looked after by their godparents.

However, the role of godparent is not a legally recognised role, meaning that if you want your child’s godparent to be their guardian once you are gone, you will have to put this in writing in your Will.

Otherwise, the Courts could decide who your children’s guardian will be, regardless of any wishes you may have.

"...the role of godparent is not a legally recognised role, meaning that if you want your child’s godparent to be their guardian once you are gone, you will have to put this in writing in your Will"

4. You are married

When you get married, your previous Will is revoked (unless you made it ‘in contemplation of marriage’) and your new legal status as a married person affects how your assets are distributed if you pass away without a Will.

This means rigid rules apply as to how much and what goes to your spouse, parents or children. You can read more about it here.

5. You want specific things to go to certain people if you die

Most people will have an idea of what they would like to go to whom. That vintage watch that’s been in the family for decades, a favourite piece of art, or your cat – setting up a Will ensures the things you have in mind for specific friends or family members will end up with them.

The law doesn’t take your personal preferences into account unless you have made them clear in a Will.

Final notes

Something I want to briefly raise is that once you have decided you should get a Will, setting one up isn’t a scary, costly or lengthy process.

Perpetual Guardian, for example, offers an online service called eWills where you can go through the entire process in your own time, and in the comfort of your own home. You can also talk to one of our experts along the way if your Will is more complex.

The last thing I want to touch on is the importance of keeping your Will up-to-date once you have set one up. It’s not a one-time thing you can set and forget. As soon as major changes happen in your life, such as getting married, having children or grandchildren, starting a business, or separating, you should update your Will.

I hope this overview helped with your understanding that it’s simple and easy to get your Will sorted. Your first step is to chat with your adviser at Lifetime, or give the Perpetual Guardian team a call. We’re here to help.

 

Article by Fiona King, Business Development Manager at Perpetual Guardian. Fiona has over 30 years’ experience in the financial services sector, working with advisers, accountants and sharebrokers from the mid-North right through to the deep South. A real people-person, Fiona loves adding value to her clients’ businesses and seeing them grow.

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I grew up in South Africa, a country in which once you leave home and get your first full-time job, your parents immediately ask: ‘Do you have your health insurance sorted?’

For me that question came at a time when all I wanted to do was buy a lounge suite with my first pay cheque. But, knowing that I had to prioritise my health, the furniture had to wait.

There is a public health sector in South Africa but it is chronically understaffed and underfunded, and the wait times are astronomical. This means we’ve learnt to adopt a culture where health insurance is just another one of those protections you need.

If I’m going to insure my belongings – my car, my contents, my house – then why wouldn’t I protect my biggest assets – my health and therefore my ability to earn an income?