Why writing your will matters and how to do it

Writing a will is more than just deciding who gets what after you pass away - it's a cornerstone of thoughtful and considered estate planning. This guide explains why writing a will is important, how to write a will in New Zealand, what to consider when writing a will and how a will can be challenged.

• What is a will?
• Why is a will important?
• Do you need a lawyer to write a will?
• What is a will executor?
• What do I need to consider when writing a will?
• Can I change or update my will?
• How do I store my will?
• Challenging a will
• What does this have to do with MAS or insurance?

What is a will?

A will is a legal document that specifies how you want your property, savings, investments, and other assets (collectively known as your estate), managed and distributed after your death.

It specifies who you want your assets to go to and in what amounts, appoints guardians for your children if needed, and ensures specific assets go to certain people or causes. It also specifies a person, known as the executor, who is responsible for carrying out the instructions in your will.

Why is a will important?

Having a will is important if you want to ensure your estate is distributed according to your wishes after your death. This is particularly important if you have children or a partner, as a will enables you to make sure they are cared for after you’re gone.

If you die without a will (this is called dying intestate), the rules in the Administration Act 1969 determine how your estate is allocated. This means it may not be divided among your chosen beneficiaries.

According to the Act, your partner inherits your personal possessions, the first $155,000 of your estate and one third of anything remaining. The other two-thirds go to your child (or children) in equal shares.

If you have no children, your partner inherits your personal possessions, the first $155,000 and two-thirds of the rest. The final third goes to your parents, unless they are already deceased in which case your partner will inherit everything. If you have children but no partner, your entire estate is left to your children in equal shares.

If you have no partner or children when you die, your parents will inherit your entire estate. If your parents are deceased, the estate is left to any surviving blood relatives, or to the Government if no such relatives exist.

Research from 2017 found that around 4 in 10 New Zealanders don't have a will. Many of us postpone writing a will because we don’t want to think about death, or we don’t consider writing a will a priority. For some, it can seem like a complicated and expensive task, while others are just too busy with their everyday lives to get around to writing a will. 

Another reason so many New Zealanders don’t have a will is that they don’t think they have enough wealth or assets to make it worthwhile. Research tells us that 20 per cent of Kiwis don’t think they have enough wealth to worry about writing a will, but with more people building wealth earlier in their lives through KiwiSaver and other investments, the $15,000 limit (when the rules in the Administration Act kick in) is being reached a lot earlier in people’s lives than it used to.  

Simply put, if you’re over the age of 18 and you want your assets or investments distributed according to your wishes when you die, then you should have a will. 

Do you need a lawyer to write a will?

When considering whether you need a lawyer to write your will, understanding what makes a will legally valid is important. In New Zealand, a valid will must meet certain standards. It requires the person writing it (the testator) to have mental capacity, which means they understand the implications of the will, the assets they’re distributing, and who the beneficiaries are.

In addition to being written and signed by the testator, a will also has to be witnessed by at least two individuals who aren’t beneficiaries. Failing to meet these criteria can result in an invalid will, leading to potential disputes and the estate being distributed according to the legislation rather than the wishes of the person who wrote it.

With the rise of online legal services in New Zealand, more people are opting to create their wills using templates designed to guide them through the process. A Google search for ‘online wills in New Zealand’ will give you a range of providers and options to create a will online.

While these options may be appropriate for people with uncomplicated estates or who cannot afford professional services, engaging a lawyer is often a better idea. For example, a lawyer can provide valuable advice on complex issues such as guardianship arrangements or the distribution of assets to minimise potential legal challenges. If your estate involves substantial assets or business interests, or if you wish to establish trusts for your beneficiaries, a lawyer’s guidance can be very helpful.

What does the executor do?

When you write your will, you need to appoint a person who will be responsible for ensuring your estate is administered and distributed in accordance with your wishes. This person is called the executor, and there can be more than one.

Many people choose a close and trusted family member, such as their spouse, child or sibling to be their executor. Other people choose to appoint a professional as their executor, usually a lawyer, accountant or trust company. It’s important that whoever you choose to be your executor has the necessary skills and can act impartially. Your will can also have more than one executor, and often people will choose to name two.

In the event of your death, the executor has specific duties to undertake. If your estate is worth more than $15,000, these duties include applying to the High Court for probate, the legal process to confirm that your will is valid and that they are the person identified in your will as the executor.

Once the executor has been granted probate, their duties include identifying and gathering your assets, paying any outstanding debts you might have, and distributing your estate to your chosen beneficiaries. They are also responsible for your funeral arrangements, and for responding to any challenges made against your estate.

If a professional like a lawyer, accountant or trustee is acting as your executor, remember that these services usually come with a cost, which will typically be taken from your estate.

Depending on your situation, you should also consider who you want to be the legal guardian of your minor children in the event of your death. Alternative executors can also be named in your will, in the event they are unable to fulfil their duties.

What do I need to consider when writing a will?

There are several key things to consider when writing your will:

First, your will should be as clear and specific as possible about how you want your assets to be distributed. Vague language can lead to misunderstandings and disputes among your beneficiaries. Your will should cover all your assets, including property, investments, bank accounts, vehicles, and personal belongings.

Next, you need to decide who will inherit your assets and in what proportions. For example, you may want to leave specific assets or amounts to particular individuals, organisations, or a charity.

When writing your will, also consider how your life insurance policy is set up. If you want your life insurance policy proceeds to form part of your estate managed by your will, you need to make sure that you are the owner of the policy.

If someone else owns your policy, they'll get the money directly if you pass away, bypassing the legal process and your estate. If the owner and the insured person pass away together, the money goes to the owner's estate.

For policies with more than one owner, the surviving owners receive the money directly, also bypassing the legal process and the deceased's estate. This means you should carefully consider who owns your life insurance to ensure your wishes for the policy's proceeds are clearly aligned with how it's structured. You can work with MAS to ensure your life insurance policy will look after your loved ones in the event of your death.

Can I change or update my will?

You can change your will at any time to ensure that it remains aligned with your current wishes and circumstances. It's particularly important to consider updating your will during significant life events such as marriage, divorce, the birth of children, or acquiring valuable assets.

These milestones can significantly alter your relationships and financial situation, making it important to ensure your will accurately reflects your current intentions. For example, if you get married you might want to include your spouse as a beneficiary in your estate, a change that requires updating your will. Similarly, the arrival of a new child is a good time to add provisions for their guardianship and inheritance.

How do I store my will? 

Storing your will properly is important because the High Court requires the original document to grant probate to the executor in New Zealand. If the original will is lost and only a copy remains, it can make the process of granting probate more difficult. The same goes for an original will that has been damaged because of improper storage. 

For these reasons, many people choose to store their will with their lawyer, taking advantage of secure vaults or other facilities that law firms offer. This ensures that the will is kept in a safe and organised place, and significantly reduces the risk of the will being lost or accidentally destroyed.

Challenging a will

Wills can certainly be challenged. When someone feels they haven’t received what they regard as their fair share in a will or they haven’t received what they believe they were promised, they can apply to formally challenge a will. In New Zealand, there are specific laws in place that provide a framework for contesting a will.  If you are considering challenging a will, it is best to instruct a lawyer to handle this for you.

For example, if a person chooses to leave all of their estate to one of their children, the others may feel they have not been adequately provided for. In New Zealand, the Family Protection Act offers them the legal means to make a claim against the estate. 

If someone who is not necessarily a family member believes they were promised something by the deceased and that promise was not fulfilled in the will, they can apply to the courts for compensation under the Law Reform (Testamentary Promises) Act. 

While most cases like this can be solved through mediation, hundreds of disputes end up in either the Family Court or the High Court each year. Contesting a will can be a complex, emotional and expensive process, so it's important to write your will with clear intentions or legal guidance to minimise the chances of disputes and ensure your wishes are followed after you’re gone. 

What does this have to do with MAS or insurance?

Life insurance is a tool available to you to protect or assist your family or loved ones in the event of your death.  MAS can help you ensure you have adequate life insurance in place and ensure that the ownership structure is relevant and up to date with your current circumstances. If you are planning your estate or considering doing so, reach out to your MAS adviser to discuss how life insurance can play a part in this process.