There was a time when most people went to their solicitor and asked for a ‘standard’ sort of will. Although such a thing never really existed what they meant was a simple will that left all the property to each other, and then after both parents’ deaths to their children. That simple will has become quite rare in these much more personally and financially complicated times. However, there are some universal ‘truths’ that still apply to all wills.
1. Keep your will as simple, clear and unambiguous as possible.
Yes, you do need to think of relationship property issues and so forth, but do not make your will unnecessarily complicated. Don’t try to run your family’s life for years from beyond the grave. The next generation is entitled to live their own lives and may not want the carefully thought out plan you have devised for them. Be wary of setting up life tenancies and trust structures that might be difficult to run long term, only cause problems, and may not suit the always-changing family circumstances.
2. Chose your personal representatives carefully and give them the powers to do their job well.
Make sure the person(s) you choose as your executor and trustee is sensible, honest and knowledgeable and will focus on carrying out the will. Beware of appointing someone who may have a conflict of interest and will struggle to be even-handed when dealing with all the beneficiaries in your estate. If your trustee has to deal with unusual property or make difficult business and investment decisions, give them the additional powers and discretions to make those decisions. Remember the standard powers given to trustees under the Trustee Act 1956, are limited.
3. Make sure your will disposes of all property you may own at your death.
Ensure that your will has generally worded clauses to catch any property you may acquire after you have made your will. Believe it or not, there have been court cases about the ownership of ‘Lotto’ winnings.
4. Carefully consider the position of all those you wish to benefit in your will, and also all those persons who might be able to challenge your will, if disappointed.
Try and forestall likely family problems and claims by drafting a ‘legally sensible’ will, even if it is not exactly what you would really like. Carefully discuss possible family problems with your solicitor when preparing your will. You cannot guarantee that you can prevent a claim against your estate, but you can reduce the likelihood considerably by careful will drafting. (See my article ‘When there’s a will, there’s a challenge’ June 2009 or go to www.alibipress.co.nz)
5. Make sure that names, property and your intentions are described clearly and accurately.
If there is any doubt at all about what a part of your will really means, your executor and trustee usually has to apply to the High Court for directions and interpretation of the will. Your personal representative cannot just guess. Going to Court is always very expensive and you do not want the assets in the estate reduced by thousands of dollars in legal fees, just because what you meant was unclear.
6. Get good legal advice, particularly if you have lived in more than one relationship, or if you own unusual property and/or investments.
I get tired of writing about the Property (Relationships) Act 1976 but it is so important that it cannot be ignored. If you have lived in more than one marriage or relationship then you need to check your legal position with your solicitor when doing your will. Make sure there are no potential property claims that may arise out of how you deal with property in your will. If you own a business, or have transferred property into family trusts or LAQCs, this will also affect how your will should be drafted. In some cases taxation, GST or gift duty implications can arise. Issues of appointing new trustees, or company directors to act after your death, may also become relevant.
7. Review your will frequently and keep it up to date.
If a marriage, civil union or de facto relationship comes to an end you almost certainly need a new will. Your will should be reviewed if there is a major change to your asset or debt situation. The death of a significant person named in your will is another circumstance. If after you have made your will you set up a company, buy a business or transfer property to a family trust, you need to look carefully at your existing will to see if it is still relevant. Sometimes law changes over a period of years can disadvantage an old will. Remember that the persons named in your will age along with you. The grandchildren grow up and enter into relationships. Your executor and trustee might become too old to do the job or shift away and no longer have contact with you. If you go and live overseas then it is usually a good idea to make a new will in your new country of permanent residence.
Finally – the eighth bonus tip – make a new will now! Most persons, who died without a will causing many problems for their families always meant to make a will – but never quite got around to it.
© Terry Carson – July 2010
Disclaimer: This article is of a general and summarised nature only and should not be relied upon to ascertain individual rights, in any particular situation.