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13 Apr 2021

Will you or won’t you? Or rather, when will you? Yes, we’re talking wills in this article, and we have 7 great reasons why you should write your first will, or when might be a good time to update an old will.

A will serves multiple purposes. It can serve a very practical purpose - who gets what and when, and ensures that the people you care about are taken care of financially. A will often sets out clearly the distribution of any high-value items too - property, shares, jewellery and so on.

 A will can also help to convey your wishes for the end of your life. Your wishes may include a detailed outline of your funeral service, or how you want to share out lesser value items that you own - vintage clothing, books or sentimental items and collections.

 Importantly, a will is not a ‘set-and-forget’ item, but rather a living document, that should be reviewed regularly (turning your mind to it when you’re reviewing your annual insurance policies can be a good way to make sure you don’t forget about it), or at major milestones in your life. Not having a will can complicate matters for your estate and your family members. Your assets will be distributed according to law, not as you choose, and the law specifies who can apply to the Court to administer your estate.

This article will consider some of the key milestones that may prompt you to either create your first will or review your existing will and update it. People often consider their household budgets when these milestones occur too, getting a life insurance policy, or reviewing their current life insurance policies to ensure they’re still relevant to their new life stage.

Source: Laura O Riley

1. Buying a house

 Without a doubt, buying a house is likely to be one of the largest ticket items you ever buy. If you’ve been successful in your property purchase you may be swimming in paperwork from your real estate agent, bank and insurers, but there is another important piece of paper you need to make sure is in place too - your will.

As one of your largest assets, you need to consider who this asset will go to in the event you pass away. If you have dependents living in the house with you, will they be able to continue making the mortgage repayments if you were no longer there? Ensuring you have a life insurance policy that may help to cover your outstanding debt and some extra money to cover some living expenses for a few months or years may give you peace of mind that your loved ones are looked after when you go. A will that details who will take over the ownership of your property in your absence is also an important piece of the puzzle. 

The New Zealand Property (Relationships) Act does have rules about how assets will be distributed in the event of your passing without a will in place, so if you have specific requirements about the distribution of your portion of assets it is wise to state this in your will.

2. Getting married

You’ve done it - you’ve tied the knot! And often tied your finances together for the rest of your life too. This can be a first for many couples who may have traditionally had very separate financial affairs. Marriage is one of those key milestones, along with buying a house or having a baby that often get couples thinking about their future and tasks such as budgeting, investing, life insurance and making a will.

From a will perspective, walking down the aisle will change the validity of any existing will you have already drafted. It’s important to understand that a marriage or civil union is a crucial time to update a previous will, because if you don’t, you’ll be considered as passing away intestate if you die without doing so. Not having a valid will can get complicated for remaining family members, and those who consider themselves eligible for a share of your estate or personal assets. Dealing with your estate can also be more expensive with no valid will in place, if disputes arise and matters have to be dealt with through the courts.

Give yourself peace of mind when entering a new relationship, that your loved ones are included in your will and well provided for.

Source: Stacey Welsh

3. Having a baby

When you decide to have a baby, most couples are more excited about lists of baby names, agreeing which cot to buy and decorating a nursery. Updating your will isn’t typically top of the Baby To-Do List. It is an important task to cross off though.

It may be a prompt to draft your first will, or at least to update your existing will. What’s more, a will is the perfect document to outline your wishes for your children if you and your partner both die - who will take on guardianship of your children, where will they live, funds to be put aside for their secondary or tertiary education, how old they will need to be to access the remainder of your estate, and so on.

Our recent Parenting Survey of over 5,000 Kiwi parents told us that 36% had a will, but no life insurance policy in place. That’s just over a third of surveyed parents ensuring they have a will in place to help protect their families, but not any access to further financial support if they need it. For many parents, having a baby is the perfect time to consider if a life insurance policy is for them.  If one parent dies, can the remaining parent continue to live in the family home and support their child(ren)? If both parents die, is there enough cash to support a child(ren) until they become adults?

4. Separations, Divorce and Dissolving a Marriage

Unfortunately for some people, relationships can end in a separation or divorce. Depending on your circumstances, if you were to pass away before dealing with relationship property, your ex-partner may be entitled to make a claim on your estate.

It’s important you make changes to your will at the point of separation or divorce - it is your opportunity to ensure that your estate is bequeathed to the loved ones that are most important to you.

5. Setting up a family trust or business

A family trust can be used to protect your assets, for you and your family, both now, and in the future. It can also be a way to protect some of your assets from future claims on your personal estate.

If you own your business, you’ll also want to ensure that your business affairs are separate from your personal affairs. If you were to die suddenly, as a business owner, and business assets fell short of business debt, you wouldn't want business creditors making claims on your personal estate.

6.  If a named person in your will has died

It’s not the first thing you think of in the event of a close family member or friend dying, but if they are named as an executor or beneficiary of your will, you’ll need to update your will promptly. We often use our parents or immediate family members in our wills, so being mindful of updating these when needed is helpful.

When naming people in your will, it can be useful to also name someone else as a back-up. For example, “In the event of my death, I’d like my parents John and Jane Smith (or my parents-in-law in the event that my parents have already died) to become legal guardians of my remaining children, if they’re under 18 years of age.”

7. It’s been a while

When was the last time you even read your will? If it’s been 3 to 5 years since you reviewed your will, chances are you’ll have some changes to make. It could be to add or remove beneficiaries, update your executor(s) or you may have new assets that you particularly want to leave with a certain family member. For example, it might make sense to leave that classic car you love with the mechanic granddaughter who adores vintage vehicles and will treat it with the same love that you do.

Some people like to review their will every year. A good time to do this is when you’re reviewing your insurance policies and other important ‘life admin’.

Bear in mind that a will is a living document, and needs to be updated as your circumstances change. It will enable your family members and close friends to carry out your final wishes, and distribute your estate as you’d like it to be. It can also ensure that your family members are clear about your final wishes at what can be a stressful, emotional and busy time, supporting them with your funeral arrangements and remove and provide certainty about your estate distribution.

Take care of the big things with Cigna

Another practical way to support your family at this time, is to consider your life insurance policy. This is another safeguard you can put in place to protect your family financially, and ensure you monitor it from year to year so that it changes with the needs of your family.

Keen to know more about protecting your whanau? Use our simple calculator, or get an instant, no-obligation quote today. Unsure where to start? A Cigna adviser can tailor a life insurance policy to suit you and your family.