Losing your partner would entail some devastating times but imagine hurdles appearing to administer your home loan adding to the stress.
This happened to a client recently after her husband passed away. Because they hadn’t updated their affairs and didn’t have a will, she struggled to renegotiate the terms of her mortgage.
It took her almost a year just to get the legal right to administer all his affairs.
Why Does a Missing Will Cause So Much Chaos?
I recently caught up with Feifei, a lawyer who runs a firm with a couple of branches, and she explained exactly why this happens. In New Zealand, if you die without a will, the law steps in. A set formula under the Administration Act attempts to decipher who gets first right to handle the estate — and that takes time and costs money.
You might think it’s just a problem for married couples. But what if you’re on your own?
Even If You Are Single
I know a smart, single guy with a house who figures he doesn’t need a will yet. But if something happens to him, his parents — who aren’t originally from New Zealand and don’t know our legal system — will be left dealing with a massive legal headache. A simple legal document would save them a ton of hassle, money, and anxiety.
What About Trusts?
A lot of people think of trusts are purely for asset protection, but Feifei points out they’re also a crucial part of estate planning. Here’s what you get to control with a trust:
- Clear beneficiaries: You can name exactly who has control and benefits.
- Memorandum of wishes: You can lay out specific requests for your beneficiaries. (Though Feifei did warn me that my brilliant idea of making my sister complete a daily 30-minute exercise challenge to get her inheritance wouldn’t actually be legally binding.)
It’s a bit of a dry topic, but getting your wishes recorded early is a no-brainer. Unless you actually want a bit of drama and everyone fighting over things after you’re gone — get it sorted.
