Helen Twose: Where there's a will, there's less pain

It is worth writing a will for the sake of those left behind, even for a student without much in the way of assets. Photo / AP

Q: My daughter recently graduated. She has a student loan and is possibly taking a gap year and doing a minimum-wage, part-time job. Does she need a will? She has a student loan incurred over the three years to get a BSc, and assets of shares, KiwiSaver ($1042 per annum for 3.9 years), a managed fund and cash. None of these individually (except the student loan) exceed $15,000. Is the need for probate triggered by $15,000 assets in total or for each individual asset and is a student loan wiped out when you die? If you have liabilities (a student loan in this case) is it advisable to have a will to appoint someone as executor and, as her father, am I automatically it, or does the court appoint one?

A: A couple of weeks back I asked Charlotte Lockhart from Perpetual Guardian about what happens to KiwiSaver funds when you die.

A quick recap:

• KiwiSaver is an investment in your name alone and will form part of your estate. It won't automatically go to your partner, parents or children.

• Once an investment is worth over $15,000 a will is needed to determine who will benefit from your estate.

• Not having a will - known as intestacy - means a lengthy, costly process with no guarantee your assets will go to whom you intended.

In the case of your daughter, Lockhart says the student loan will be wiped on death, but other debts are not, so would be taken from the assets of the estate.

"The $15,000 rule applies to individual investments, so you could have $10,000 in savings, $14,000 in managed funds and so on," she says.

Lockhart says if your daughter is thinking about making a will this is the time to do it, even if technically today she does not need one.

"In the future when she does need one, is she going to remember to do it?"

Her regular contributions mean she received the full annual member tax credit of $521, plus the $1000 kick-start she was entitled to when she joined, so your daughter is halfway to the $15,000 trigger.

"She can write her will so it takes into consideration future assets and children and it makes it easy for those she leaves behind," says Lockhart.

"In this case, making it easier for her parents at what will be the worst time of their lives is the kindest thing she can do.

"If she dies intestate with the minimal assets, her parents are likely to inherit, unless she has a partner who may be able to make a claim depending on the length of their relationship.

"Her father will not become automatically her executor - this is a role appointed through the will. However, she has a low asset base and just the student loan so her death certificate is likely to be the main piece of paper they will need if she does not have a will."