Wills have long been regarded as specialist legal documents and their preparation has been the domain of legal experts. More recently, with easy access to information, particularly through the internet, many people are choosing the option of preparing their own will. Draft and template wills can be downloaded off the internet and if you don’t have access to the ‘net’, you can purchase these documents from a variety of other suppliers – including the corner stationer.
The main reason people choose to prepare their own wills is based on the assumption that they will save on costs. However, the costs of getting your will wrong, far outweigh the costs of having this important document professionally prepared. Legal professionals make more out of the mistakes created in DIY wills than they do out of preparing the will!
Whilst there are basic clauses that should form part of all wills, everyone’s circumstances are unique and the practicality of a will is only as good as the questions asked by the preparer. Unfortunately, pre-printed wills and download documents aren’t very intuitive and won’t always ask all the right questions.
Following on from the DIY will, the DIY testator is also inclined to appoint a spouse, partner or friend as their executor – convinced that further costs will be saved and assuming of course that the spouse/partner/friend has a similar penchant for DIY. The ‘lay’ executor generally finds themselves at their nearest legal professional seeking help in administering the estate. The cost savings – nil.
Whilst it might sound simple, preparing a will requires a certain level of expertise and a sound knowledge of the law. To prepare and execute a valid will you need to know more than the legal requirements for signing and witnessing the will. Asset ownership, for example, is very often overlooked and the various types of ownership have different implications when you are contemplating passing over assets in a will.
Will you have the last word?
In New Zealand there are three different laws that can impact on you having the final say in who gets your assets. The first is the Family Protection Act 1955. This act gives certain family members the right to claim against your estate if they believe that have not been adequately provided for under your will. Consequently, if you have excluded or only made limited provision for a family member who qualifies under this law, your estate could face a claim.
The second piece of legislation under which a claim can be made against your estate is the Law Reform (Testamentary Promises) Act 1949. Under this law, if a person provided you with a service during your lifetime and you expressed or implied that they would be provided for in your will in return for that service, and you then fail to make such a provision in your will, such a person could lodge a claim against your estate.
Lastly, there is the Property (Relationship) Act 1976. Changes to the provisions of this Act in 2002 narrowed the gap between married and de facto couples, allowing a de facto partner (including same sex partners) to claim against your estate in respect of ‘relationship’ property. In the event of death, the Act presumes a 50/50 split and that all the property of the deceased was relationship property unless proven otherwise.
When all is said and done, what you directed as a distribution of your assets in your will may end up not to be the case…and with so much at stake, it doesn’t make sense to risk the ‘cheap’ route.
This article was reproduced with the permission of Guardian Trust (www.guardiantrust.co.nz)
The views or information given in this article are not necessarily the views of AMP or AMP Adviser Businesses. It provides general financial information and is not intended to provide financial advice. For personalised financial advice, we recommend you contact us.