A will: what is it, what does it do and why should I have one?
Juliet Moses is a partner at the Auckland-based boutique law firm Taylor Grant Tesiram who spoke at the recent launch of the Bequest Fund. The firm specialises in trusts, estates, succession planning, relationship property, and related areas. This is the first of the series.
A will is normally made for the purpose of disposing of property on the will-maker’s death. However, a will can also serve other useful purposes, including appointing guardians of children under the age of 20 and giving guidance as to funeral and burial instructions.
A will has no legal effect until you die. Until that time, it can be changed as often as you like. Certain events, such as entry into a marriage or a divorce, can invalidate or change the contents of your will. You should review your will every three to five years, and whenever you have a major life event.
If you die without a valid will, your family is unlikely to thank you for it. Legislation specifies the order of inheritance
that applies which is unlikely to accord with your wishes. A well thought out and drafted will can lessen the emotional and financial hardship that you leave behind.
Executors
One of the most important things to think about is who you wish to appoint as executor of your estate. The executor is the person charged with carrying out the will-maker’s instructions under the will, and in effect, steps into the will-maker’s shoes. The executor will have to file for probate. That process requires applying to court to have the will authenticated
and giving the executor the power to act as such. On getting probate, the will-maker’s original will is filed in court and that will is kept by the court as a matter of public record. The executor may also have to sell assets, and deal with claims and the IRD, amongst other things.
The position of executor can carry a great deal of responsibility and may require some understanding of law and commerce, so you should think about who you trust and is able to cope with this responsibility. The executor can be anyone, although the person will not validly be able to exercise the office until attaining 20 years of age and only companies which are authorised by statute can act as executor.
You can have more than one executor and it is a good idea to do so, or to have a “successor” executor in case the first one appointed is unable to act.
Gifts
You will need to spend some time thinking about how to dispose of your assets. There are countless ways to do this. Think about personal items of particular sentimental or material value (eg. jewellery, Judaica, artwork, antiques) and who you would like to receive those.
You can also gift other particular assets like a property or shares, a specific amount of money (although bear in mind the impact of inflation), or all of part of the residue (that which is left in the estate after all specific gifts have been made). If you are owed debts, you might want to forgive them debt in your will. You can set up trusts, charitable or otherwise, and
impose certain conditions or restrictions on any gifts.
Generally, will-makers have “testamentary freedom” to dispose of their assets as they see fit.
This article first appeared in Teruah February 2011
