RSA Review Spring 2020

RSA REVIEW • spring 2020 7 There is a misconception in New Zealand that our next of kin automatically has the authority to access our assets oncewe have passed away. The harsh reality is: That is not the case. Without awill or enduring power of attorney, no one has authority to access bank accounts, sell property, cancel payments, or conduct any other financial or property transaction. Cassandra Fellows, an associate trustee from The Public Trust, says many husbands, wives or partners maintain individual bank accounts and don’t operate a joint account, relying on one another's funds to pay bills, grocery shopping and day-to-day living. “When one person passes away without a will, funds from that person’s account can no longer be accessed. In the absence of a will, a person’s estate falls under the laws of intestacy and probate must be obtained through the Family Court or a solicitor. It can be a long, distressing and expensive alternative.” The will provides a delegated individual/s or entity—suchas ThePublic Trust—withauthority to administer the estate. This relieves family of being placed a very stressful legal situation and leaves them free to focus on their own families in a time of grief. While the administrator gets the authority from the will, that authority must be proven by applying to the High Court. The court’s confirmation of this authority is shown by a grant of probate to the administrator. The Public Trust is a Crown entity which operates across the country and is is responsible for drafting wills, trusts and enduring powers of attorney—some of the most important docu- ments in terms of preparingan individual’s asset and managing their finances and livelihoods. “In the larger framework, once our client has passed away, The Public Trust often acts as the estate's executor, responsible for the reading of the will, gathering and distribution of assets to beneficiaries,” says Cassandra. “The will also sets out what and how the person wants someone to inherit. It provides the opportunity to ensure assets accrued over a lifetime, and which mean something, get passed to beneficiaries the person drafting the will would like to see inherit.” Cassandra says while anyone can draft a will—you don’t need to go to The Public Trust or a solicitor—reputable professional organisa- tions ensure the client receives expertise in estate administration. “People ask why we charge for our services when awill packet can be bought cheaply from a bookstore or on line, and people can draft it themselves," says Cassandra. "You can literally write your will on a napkin at a restaurant if you want to. But one of the biggest pitfalls is not seeking professional advice. It’s the advice you get, confidence the will will stand the test of time, will be kept safe and free from flaws that could lead to a legal challenge. "Wills are complex documents – once they’re signed and you pass away, that’s it. There’s no reading between the lines, inference, or ‘that was just an error’.” Her advice when drafting a will is not to ‘gift’ everything you own. When someone dies, bills, outstanding debts and liabilities are paid first; then the gifts are given, and then the residue distributed. Everything not specifically gifted falls into a residue. Gifts could be parcels ofmoney to individuals or specific items of property, suchas aMoorcroft pottery collection. Everything else not specifi- callygifted fallsunder residue, and is distributed as percentages as directed in the will. “That’s thebestway todistribute your estate— you don’t want to account for every dollar you have because youmay not have that when you pass away. We probate wills that are more than 20-30 years old, and a lot can change in that time. So, creating a will that will last and stand the test of time rather than what suits your situation right now is important. "But awill is also a living document, and if your situation changes, it may need to be updated.” Drafting or revising a will should be considered in extreme changes in circum- stances, such as getting married, having children, ending a relationship, the loss of a job, inheriting or a move overseas. Being honest with the will drafter is another key to a watertight will, Cassandra says. “Family dynamics can be difficult, but transparency is the best thing you can do. Many people like to keep relationships secret, not tell us about children they may have or be estranged from. "The best thing people can do is lay out their situation transparently so that we can provide the best advice and know how to administer the estate. "Direct family members omitted from the will have a right to claim on the estate. If there are extenuating circumstances why someone does not want a person to inherit—perhaps there has been long-term estrangement, long-term abuse or the person is financially imprudent— notes to that affect can be included, and are discoverable in court.” Askedwho shouldhave awill, Cassandra is quite clear—everyone—it’s that simple. “If you have a bank account and a job, or a collection of important memorabilia, having a will is never going to be a bad thing.” The case for will power Wills are complex documents – once they're signed and you pass away, that's it. Member services