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Wills & Kiwisaver

March 2019

Thinking about death and the distribution of assets isn’t typically something we begin to think about until we reach a significant milestone like purchase of a house, starting a family, or reaching a certain age. Current estimates have shown that about 70% of adults in New Zealand under 40 years of age do not have a Will. In recent times we have noticed that more and more young Kiwi adults are contributing toward Kiwisaver schemes. With Kiwisaver in its twelfth year, the average fund is rapidly increasing, which means that many young Kiwi adults will have a Kiwisaver balance of over $15,000.00.

It is important to understand two things about Kiwisaver: 

  1. It is not a joint asset. This means that it will not be automatically transferred to your partner or spouse (unlike the joint bank account savings); and 
  2. As an investment, once your Kiwisaver reaches $15,000.00 your family will be prevented from accessing the funds without a Will (and Probate) or Letters of Administration.  

What is Probate?

Probate is a document sealed by the High Court of New Zealand recognising a Will as authentic and confirms that the Executor has the legal authority to deal with the deceased’s estate. 

What if I die without a Will?

If you die without a Will with your investments still locked into Kiwisaver, and your investments are worth more than $15,000.00, then your Kiwisaver fund will be subjected to the Intestacy Rules under the Administration Act 1969. This will determine how the funds will be distributed. This process can be long, arduous and costly with no guarantees that your assets will go to those you intended to inherit. It can also be extremely stressful for your family members who are trying to resolve your estate matters after you have died.

What is included in a Will?

A Will can and should be simple, although some people’s lives are less than straightforward. For a simple Will all you need to include in the Will is:

  1. The Executor(s) – the person(s) you trust to carry out the directions contained in your Will;
  2. Who the beneficiaries are – the person(s) who is to receive or benefit from your estate (you must consider immediate family members including spouse/partner, children and possibly grandchildren); and
  3. Other provisions can also be included in your Will relating to care of your children and your funeral arrangements. 

What does it cost?

For a simple Will, the total estimated cost will be in the vicinity of $500 plus GST and office expenses. Often when husband and wife mirror image Wills the cost will not be much more (rather than double the price). This is a small upfront cost to ensure that your wishes are followed – the alternative of no Will and (therefore) Letters of Administration may cost your estate up to four times the amount it would cost with a grant of Probate. 

If you don’t have a Will then you should make an appointment to see us as soon as possible. Having a proper Will in place provides you with peace of mind, knowing that if the unthinkable happens, you have taken care of the people and things that are most important to you. 

Once we have drafted your Will and  it has been signed, it is also necessary to update it when changes in your life occur, such as inheriting property, entering a de facto relationship, getting married (or divorced), or having a new baby. If you do have a Will but it does not reflect your current financial or family circumstances, then you need to see us to update that Will. It is certainly our recommendation that you should revisit your Will at least every 5 years (or sooner in many circumstances).