Diana Clement

Your Money and careers writer for the NZ Herald

Diana Clement: Don't allow death to take you by surprise

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Fifteen things you should consider doing before it's too late

Leave orders whether you want to be buried or cremated. Picture / Getty Images
Leave orders whether you want to be buried or cremated. Picture / Getty Images

The best time to prepare for your death is when you're young, fit and healthy. How and where will you be buried or sent off? What bills will you leave behind? Who will look after the children? How do you want your assets divvied up? And so on.

Left until you're incapacitated or not done at all, these issues will create a nightmare for those left behind. There is a lot to think about, says Phil Morgan-Rees, personal client services general manager at Guardian Trust.

This week I've compiled a list of 15 things to consider or do in preparation for your death.

Get a filing cabinet. If all your documents are in one place it makes matters comparatively easy for the family and the executor of your will. Any good filing system will work, although some people prefer a safe deposit box. In it should be originals or copies of birth and marriage certificates, passports, driver's licences, IRD numbers, copies of recent tax returns, among other things.

Include contact details of financial advisers, insurance brokers, close friends, tenants and organisations to which you belong. Including a list of whom to notify in the event of your death is a good idea.

Collect proof of ownership. Where is all the documentation proving ownership of your house, land, Maori incorporation shares, share certificates, cemetery plots, health and life insurance certificates, KiwiSaver and so on? No documents equals one big headache for the executor. They may not even know you have a Cash Isa with RaboDirect when your main accounts are held at Westpac, or an ancient life insurance policy taken out 30 years ago. Sometimes relatives end up playing detective to find out what their loved one owned. Unsurprisingly there is millions of dollars unclaimed being held by the IRD (ird.govt.nz/unclaimed-money).

Communicate your wishes. As well as filing all the paperwork in one place, says Morgan-Rees, it's important to follow up with documentation showing the big picture. This can include letters of intention that explain why you have chosen, for example, to leave everything to charity or decided to be buried rather than cremated. Don't forget to note any promises or loans you have made in your lifetime.

Record the basics of family history/connections. The executor and the beneficiaries may not know whom you are related to, says Morgan-Rees. Your children or other descendants might also want to know after your death if there are any inherited diseases in the family.

How will you pay for your death? The two most common choices, if you have the money, says Morgan-Rees, are to take out a pre-paid funeral plan, which is a type of insurance policy, or set up a funeral trust. Funeral grants are available from Work & Income for people of limited means. There is a very interesting Campbell Live video about funeral costs in New Zealand at http://tinyurl.com/CampbellLivefunerals

Consider how your partner will survive financially. Whether your partner is young, middle-aged or retired, there are questions to be thought through about how he or she will survive financially. Even if you are a non-working spouse, your partner may face additional costs such as childcare or reduced income, such as moving from joint to single-person's superannuation.

Disposal of personal effects. There aren't many people who don't own something of sentimental value. It can take quite a bit of thought to decide what to do with Great Aunt Phyllis' Welsh dresser, or your great-grandmother's jewellery. Some people start giving away these precious items during their lifetime - or at least earmarking them. If the heirlooms are financially valuable it's worth discussing the implications of the gift with a lawyer or trust company employee who can highlight any potential pitfalls.

Write a will. Even if you have a family trust you still need a will to handle the personal effects that aren't owned by the trust. If not, the rules of intestacy apply. You will also need to choose an executor, who could be a friend or family member or a professional executor such as a lawyer or trustee company employee. Many people choose family trusts as their preferred method to pass their assets on to the next generation. If you have a trust, however, make sure that your will forgives the debt on your death. Otherwise you could saddle your beneficiaries with assets they don't want to hold in their own name.

Set up EPAs. When preparing for your death, says Morgan-Rees, you also need to consider the "what-ifs" you may encounter along the way. Just as important as a will, he says, are enduring powers of attorney (EPAs), which allow someone else to act for you, pay your bills, make decisions, file tax returns and so on if you become physically or mentally incapable to do those yourself. Some people write a living will, which outlines what medical care they would like if they can't decide themselves. It's a good idea to include contact information for your doctor and details of medications taken.

Take out insurance cover. One of those other "along-the-way" issues is disability through illness or accident. Taking out insurances such as income protection, accident and critical illness cover can help financially if death isn't sudden. Life insurance can of course leave a lump sum to your dependants or other beneficiaries on death.

What will happen to your business? Will your business partners be able to carry on without you? How will the shares be distributed? Businesses can be hamstrung on the death of a director if the executor can't act on his or her behalf.

Planning your funeral. Do you want a church send-off or would you prefer your loved ones to congregate at the crematorium chapel? Do you want a wake or tangi? What will happen to your ashes? Would you like hymns such as Amazing Grace played or are you more a Smoke on the Water type? Should there be flowers? Or would you prefer a donation to charity? If these things matter, it's best to plan them rather than leave it to chance with grieving family and friends. Some people don't even want funeral directors involved. There is no legal requirement to use their services.

Buying a burial plot. It's not easy to arrange to be buried in a very old family plot. If you're not the oldest son of the oldest son, you can't necessarily lay claim to that plot. Some people choose to pre-purchase their burial plots in their lifetime. At Waikumete Cemetery, for example, burial plots range in price from $3075 to $4545. An ash plot is cheaper. There are other costs such as digging fees and monument permit fees. Details can be found at Aucklandcouncil.govt.nz/EN/parksfacilities/cemeteries. It may also be possible to pre-purchase a headstone. Parkinson & Bouskill director Peter Gibson says it's not unheard of for people in their lifetime to install a headstone on the plot with just the family surname on it.

Become an organ donor. Your heart, pancreas or liver could save someone else's life. But there is a very small window of time when they could be used. Loved ones could stymie your wishes if they come as a surprise, so make sure you let them know. If you are an organ donor it is noted on your driver's licence. It's also a good idea to include it in the will. Visit: donor.co.nz

Share your passwords. People's Facebook pages can be turned into memorials once they die. There is a way of reporting deaths to Facebook. Another option is to give your password to someone else to administer the page after your death. There may be other reasons to include a list of passwords with your will so your wider circle of friends, acquaintances, business colleagues and others can be informed of your death and also online memberships closed down. Be careful, however, of letting anyone else know passwords to online banking and other websites where your assets could be plundered in your lifetime.

- NZ Herald

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