It is generally recommended that all New Zealanders over the age of 18 years – including non-New Zealanders who live in and have assets in New Zealand - should have a will in place. Often due to a lack of awareness or an assumption that a will is only for older individuals or those with notable assets, many people put off making one. However, all estates that have an asset with a value of $15,000 or more must seek orders from the High Court before the assets of that estate can be dealt with. With the introduction of KiwiSaver, most New Zealanders will meet this threshold within a couple of years of employment.

A will grants you the opportunity to express how you want to distribute your estate on your terms. It is a crucial aspect of estate planning and set out below are a few reasons why:

Clarity and control over asset distribution

Dealing with the death of a loved one is an emotional and difficult time. A will simplifies the process for your family by providing clear directions on how to handle your estate, which can help alleviate some of the stress and confusion during this period. Without a will, the distribution of your estate is determined by New Zealand’s intestacy laws which by its nature can cause delay and additional expense.

Appointing an executor

A will enables you to appoint one or more executors, that is people or an institution responsible for collecting in your assets, repaying any debts and distributing your estate according to your wishes. A trusted family member or friend can be an executor or you may wish to appoint a professional such as a lawyer or an accountant. While you can appoint more than one executor to act, for the sake of practicality we often recommend having no more than three.

Appointing a guardian for minor children

If you have children under the age of 18, a will allows you to appoint a guardian to care for them in the event of your death. Without a will, the decision of who will take care of your children will be made by the courts, which might not reflect your wishes or the best interests of your children.

Addressing specific wishes and charitable contributions

A will allows you to make gifts of specific assets such as family heirlooms and donations to charities. This can be particularly important if you have specific assets that hold sentimental value or causes or organisations that you are passionate about.

Potential issues with the intestacy rules

Without a will, the administration of your estate becomes subject to a lengthier legal process as the courts determine who can administer your estate.  The person appointed must demonstrate 1) they have the highest priority to do so, and 2) anyone who has greater or equal priority is agreeable, or at least aware of them applying , to act. A number of agencies need to be contacted to obtain the necessary documents to prove that a particular person has priority and this often delays the distribution of assets and increases legal costs.  

The intestacy laws endeavour to set out how the average person may distribute their assets, however, such laws are unable to contemplate individual circumstances such as family dynamics and make-ups and wishes such as specific gifts and charitable donations. As well as this the intestacy laws are becoming more outdated.

Family trusts and wills

Some people may consider that because they have settled the majority of their assets into a family trust, there is no need for a will. However, a will that ties in with the trust structure is still important to distribute any assets that remain in a person's sole name (such as KiwiSaver) and to deal with matters relating to the family trust such as forgiving any debt and transferring powers to appoint and remove trustees and beneficiaries of the Trust. It may be appropriate to create a 'funnel will' which funnels any assets in a person's estate to their trust.  

Reviewing your will

Creating a will is not a one-time event. We recommend reviewing your will at least once every five years or earlier if a significant life event occurs e.g. acquiring a significant asset, receiving an inheritance, entering a relationship and/or marriage, the birth of a child, divorce or death of a family member.

Regularly reviewing and updating your will ensures it reflects your current wishes and circumstances.

A sting in the tail

While having a current will remains an important facet of any estate plan, it is not always the be-all and end-all. The media is littered with tales of unhappy or disappointed family members challenging a will. This is because the proposition in New Zealand of 'testamentary freedom' – i.e. the ability to deal with your assets as you see fit –is presently coupled with certain statutory regimes that overlay responsibilities that someone needs to consider when making a will. If those responsibilities are not properly addressed, the Will can be vulnerable to challenge.

If you need to create or update your will, or require guidance on estate planning, contact our Trusts and Private Clients specialists.

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