There is a well-known saying that there are two certainties in life, death and taxes.
Despite the certainty of death, many fail to plan for it by making a will. Lack of time, lack of money, and indecision about who should be the executor or the guardian of young children are
the usual excuses.
The most expensive part of dying is administration of the estate (typically several thousand dollars) and that becomes even more expensive and time-consuming if there is no will. Dying without a will also means that your estate is divided according to the Administration Act and this may not be how you wanted it to be divided.
Although you can write a will yourself, it pays to get professional help from a lawyer or trustee company to ensure that it is valid and will deal with your property as you intend.
These days, with many relationships ending before death, there are some traps to watch out for.
Unless you have updated your will after a separation or divorce it will remain valid.
If you enter a new relationship, then after three years or more your partner can claim half your assets on your death under the Property (Relationships) Act unless you have previously entered into a "contracting out" agreement that sets out a different division.
Other documents you should consider preparing are enduring powers of attorney, which enable specified people to manage your affairs and your welfare should you become mentally incapacitated; and a living will, or advance directive, which states what medical care you should be given if you become physically or mentally unable to decide - for example, if you are on life support.
Review your will and other documents regularly to ensure they remain up to date.
Liz Koh is a financial adviser. Her disclosure statement can be obtained free by calling 0800 273 847.
www.moneymax.co.nz
