Validating imperfect wills

What can be done?

For wills to be valid they must comply with a number of legal formalities; they must be in writing and there must be two witnesses who must attest to the will-maker signing the will in their presence.

However, some people create their own wills that do not comply with these formalities and these wills could be invalid. Sometimes people will express what they want to happen to their property after their death in an electronic document, such as a text message.

Since 2007 the High Court has had power to validate these documents so that they have the effect of being a valid will, even though they do not comply with the legal requirements of the Wills Act 2007.

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How do I bring my trust to an end?

The process

It has been estimated that there are between 300,000-500,000 trusts in this country. Trusts have been established for many different reasons, including estate planning, creditor protection, to ensure access to rest home subsidies, tax benefits or for protection from relationship property claims.

When the reason for a having a trust is no longer valid (there’s more on this on our article Do I still need a trust? here), it is important to bring it to an end in the most appropriate way bearing in mind the powers in the trust deed and the needs of all the beneficiaries.

This article explores the two most common ways that trusts can be brought to an end – bringing forward the date of distribution (the trust’s expiry date) and distributing all the trust assets to beneficiaries.

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Inherited debt? What if your parents die broke?

When you hear the word ‘inheritance’, what is your first thought? Is it positive or negative? Do you think about what you could receive from your parents, or what you might pass on to your children? Answers will vary, but generally the term ‘inheritance’ carries positive connotations. The Oxford Dictionary defines an ‘inheritance’ as ‘a thing that is inherited’. More helpfully, Wikipedia defines it as ‘the practice of passing on property, titles, debts, rights, and obligations upon the death of an individual’.

For this article, however, we’re focussing on ‘debts’ rather than actual things. What happens when your parents die broke? Can you inherit a debt?

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Making sure your loved one is mentally capable when signing their will

What does it mean to have ‘mental capacity’ when it comes to signing a will or an important legal document? This has recently become a hot topic, with new case law shining some much-needed light on the subject. It’s also something that families need to be aware of as their loved ones age.

Mental Incapacity

Mental capacity, as a concept, seems straightforward and self-explanatory. Common sense would suggest that if there is even a slight question as to a will-maker’s capacity, an assessment should be carried out to ensure they fully understand the provisions in their will, as well as the possible consequences that could arise from them.

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When Grandma comes to live with us

As parents age, their children often find they need to take an increasing role in looking after them. Unpalatable as it seems, it’s important to think about the legal difficulties that can arise where one member of the family has assumed responsibility.

If questions are asked some time later, it may not be enough to say “but that is what mum/dad wanted”. We also explain the restrictions on when an attorney (the person who holds the Enduring Power of Attorney) can benefit from the decisions they make. We touch on the issues where a parent later needs to go into care.

EPA

Often elderly people do not want to live alone. Buying a unit in a retirement village, or some other form of sheltered accommodation, may be a good option. Others may find buying a unit is not financially possible or desirable. Some prefer to stay with one of the family. In that case, an increasing burden may be thrown on the family member who is providing care. These arrangements should be recorded carefully and it’s important to get legal advice.

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Option A or Option B? That is the question!

Entitlements under your spouse or partner’s will

When your spouse or partner dies you will need to make a very important decision between your entitlements under their will and potential claims against their estate. We discuss the implications of that decision, some of the issues that it raises and the consequences of the choice that you make.

In 2002 the law in New Zealand was changed so that when one of the spouses to a marriage or one of the partners in a de facto relationship of more than three years dies, the death for most purposes is treated the same as separation. Under the Matrimonial Property Act 1976, when a married couple separated the general rule was that their matrimonial property was split 50/50.

Wills

The changes to the law in 2002 extended this division to the situation where one of the spouses or de facto couples dies leaving a surviving spouse or partner. For practical purposes, death is treated the same as a separation under the Property (Relationships) Act 1976, known as the PRA.

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Blended Families – Wills and Trusts

Can it be fair for everyone?

Making sure everyone you care about gets a fair share of your property after you die is an issue most of us grapple with. This may also have additional complications when you have a blended family.

It’s not always as easy as just writing your Will and specifying who gets what. There are several statutes that give family members and/or your new partner’s family, a right to contest your Will. The two main statutes are the Family Protection Act 1955 (FPA) and the Property (Relationships) Act 1976 (PRA).

Leaving it all to your partner?

A common way of structuring your affairs is to leave everything to your partner or spouse, knowing they will provide for your children as well as their own in their Will. These are often called ‘mirror Wills’. Unfortunately, this structure doesn’t always satisfy all the children involved, as we have seen in several recent court cases. You also run the risk of your partner or spouse changing their Will at a later date after you have died.

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Get Your Enduring Powers of Attorney Sorted Out

Having an Enduring Power of Attorney (EPA) is as vital as making sure you have a Will. Whether you’re 18 or 80 years old, you never know when you may need to have a responsible person to make decisions on your behalf.

What is an EPA?

An EPA is a set of two legal documents, one for personal care and welfare, and the other for property. They appoint an attorney to act on your behalf to carry out your wishes at times when you may lack the mental capacity to do so yourself or, in the case of property matters, at your discretion. Lack of mental capacity can be caused by, for example, a brain injury, an accident, or a medical condition such as a stroke or Alzheimer’s.

It’s important that you appoint someone you trust, and who understands you, to be your attorney. It can be difficult to talk about, but you should consult with your family about your EPAs so that everyone knows what to do if you become unwell and can’t manage your affairs by yourself.

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Looking After Your Inheritance

Keep it protected

For many people a gift by Will (also known as a legacy) from a relative or friend can be very significant – both personally and financially. The relative or friend wants to show you kindness but also usually wants the gift to be of real benefit to you personally. The gift is not intended to benefit other parties such as creditors, the Official Assignee or a de facto partner, however, unless it’s protected, that can be the unintended outcome.

Relationship property claims

If you are a beneficiary under a Will and you’re married, in a civil union or de facto relationship, the gift (under the Will) is separate property (as opposed to relationship property). The difference is important because if your marriage or relationship breaks down or you die, your spouse or partner cannot claim half of the gift (or its proceeds) because it’s separate property which is not subject to the equal sharing regime under the Property (Relationships) Act 1976.

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Will Your Business Survive if You Don’t?

Planning is key

Most owners want to ensure their business will continue after they have died. Often they want their family to be able to carry on the business. A common form of business in New Zealand is the family farm and this poses particular problems all of its own. Most people know that they need to have an up-to-date Will and Enduring Powers of Attorney (EPA) to cope with any unexpected events. However, there is a lot more planning that you should do as well.

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