Why, when and how should you make a will?

Are your 20s and 30s too early to be thinking about a will? What exactly is an executor? What happens to your will when you get married? 

We talked to Kellie McKinstry, Trust Manager at Trustees Executors, about all things wills, and got the answers to all these questions and more!

Watch the YouTube video or read the transcript below.

Today we're going to be talking all about wills: what they are, why you should get one, when to get one, and what goes into one. Now, full disclosure: I don't know very much about this topic. But luckily, I have an expert here with me today. Kellie McKinstry from Trustees Executors is here to answer all my questions. So I'm going to be learning along with everyone else.

Welcome, Kellie, it's great to have you here. 

Thanks, Clarissa. Thanks for having me.

So let's get straight into it. What is a will?

A will is a legal document, which sets out what you want to happen to your assets when you die. it can include lots of other instructions, say, for example, what sort of funeral you'd like to have, who's going to be guardians for your children, what sort of arrangements you'd like to make for any pets you've got, and who you'd like to administer the whole process. 

Okay, so when we're talking about assets, what exactly do we mean by that? 

Your assets are really anything that you own. So it could be financial assets – like your bank accounts, your KiwiSaver, any investments that you might have – or it could be your home or properties that you own. Or it could just be things like your diamond ring, or your picture of a boat that's up on the wall. 

Okay, so it could be things that are not necessarily a house? So, for example, I don't own a house, but I have investments, I've probably got some things that are quite special to me. So it also includes stuff like that as well? 

Absolutely. It doesn't necessarily have to be things that have monetary value. It could be things that are passed down through your family for generations, or that have sentimental value. Also, you know, you might have life insurance, which might not be worth anything at the moment, but when you die, it’ll be worth something to your estate and for the people who would like to benefit. 

So a will is something that I guess to me seems quite scary, almost like something I always don't want to think about. I don't want to think about the time that I'm gonna die and all of these things. Would you recommend that someone in their 20s or 30s should start thinking about it now, or is it more for sort of older people that are in that later stage of life? 

Absolutely, this is something that you should be thinking about whether you're 25, whether you're 55. Let's face it, nobody really wants to think about what's going to happen when they die. If you've got any assets, if you've got a partner, if you've got children, if you've got KiwiSaver, if you've got life insurance, maybe you're going to be receiving an inheritance, if you own a home... Those are all things that should be triggering you to start thinking about your asset planning, your estate planning, which includes making a will. 

So in other words, it's always a good time to start thinking about it. Well, no matter what, what age you are? 

Absolutely, and you know, the process of making a well is a lot easier than what people think.  

What's the process, and how easy is it to actually make one? 

Well, the process of making a will is usually quite straightforward. It's a really important document, so it is important to get it right. So I would always recommend getting professional advice.  

There are a number of options, you can now complete them online, you can get a will kit, but these options are only really appropriate if your will is really simple. So generally, you know, I think it's an important enough document to have that you should get the right advice. And this would involve meeting your advisor, whether it be a solicitor or a trust manager, and just talking to them about what your circumstances are, what your plans are for your future, what assets you have, who you want to benefit from your estate. And based on that they'll give you some advice and prepare a document for you that's going to suit your needs. 

And how long does that process typically take? If you are doing it through a solicitor or an advisor, is it one meeting with that person or does it take a little while to get things sorted? 

So usually it would take two meetings. The first meeting would be the initial discussion about what your objectives are and what you want your will to say, and the second meeting would then be after the person has prepared the will for you, for you to come in and sign your will document.  

And it's very important that your documents signed correctly. So the law says that your will has to be signed and dated and it must be signed in the presence of two witnesses who can't be beneficiaries of your will, and they shouldn't be people that are related to you in any way either. For your will to be validly signed, it's very important that it meets those criteria.  

It's also really important that your will’s kept in a safe place. And I also always tell my clients to let their loved ones know that they've made a will, to let them know where it's held. 

So how does that process work? Is it still possible to sign and witness a will when you create it online? 

Yes, depending on which company you use to create your will. Often it will generate a document which then just needs to be signed and witnessed. As I said anybody can make a will, it doesn't have to be a lawyer. It doesn't have to be a JP, a justice of the peace. An individual can do it as long as they're preferably not related to you or not benefiting under your will.

Now, you mentioned putting your will in a safe place once you created it. And I'm just wondering, do you need to update a will? Is that something that once you've done once you created it, you put it in a safe place, and then it's done – tick! Move on to the next thing, don't look at it again until you need to? Or do you need to actually go back and make changes to it later on? 

Yeah, well, in the first instance, it's great when you have made a will - well done for getting your will in place. But it is kind of a living document. Because throughout your life, your circumstances are going to change, you know, you might buy or sell houses, you might get married, get divorced, might have children, some of your beneficiaries might actually pass away, you might win lotto. All kinds of different changes could happen in your life.

And it's really important to regularly, even once a year, just turn your mind to whether ‘hey, you know, this has happened this year, maybe that means I need to update my will, I’d better just get it out and have a look at it to see if I need to change anything, make sure it's still relevant to my life.’ So it's not really a set and forget kind of thing. A lot of people don't realise as well that if they get married, it means their will’s no longer valid. 

Really, okay, I didn’t know that. 

Unless you make your will in contemplation of getting married to a particular person. Then it will still stand, but often people don't realise that that if they've got married, their will is no longer valid. 

Right, so if you get married, that should be on your to do list as well as planning your wedding, update your will! 

Definitely on the to do list. Yes.  

And I'm guessing also if you have a kid and start a family that would also affect it, because then suddenly you've got a child that you might want to include in that will, right? 

Yes, that's right. Not only would you want your child or children to benefit from your estate, but also, it's really important that you take the opportunity to think about who you would want to be responsible for the upbringing of your children. So to name guardians in your will you know, it's a real opportunity for you to have your say, and not just leave it up to up to the court to decide who's going to look after or raise your children.  

And it's important that your guardians are able to instill in your children the values that you would have wanted them to have. So for you to actually appoint guardians from your will is a really important thing.

What's the worst thing that could happen as a result of not having any sort of well, whatsoever? 

Well, unfortunately, this is not uncommon. Not enough people in New Zealand have made wills and planned for what's going to happen if they pass away. If you don't have a will, or if your will’s not valid, it means the law actually sets out who's going to receive your assets, your estate when you pass away, and it might not be what you would have wanted.  

For example, situations where perhaps you're in a relationship and you've been in a long-term relationship for many years, but you never updated your will to include your new partner. Or you didn't make a will that included your new partner. Perhaps if you have children and a partner, you know, things could get a bit tricky, especially if those children are from a different relationship.  

If you don't have a well, it's referred to as dying intestate. And that means a few things will need to happen. One is that somebody will need to apply to administer your estate. So they need to file an application in the court. Now this person who's got looking to administer your estate might not be the person you would have chosen to manage that process. 

In addition to that, as I previously mentioned, your assets or belongings may not go to the person or people that you wanted them to go to. It's usually a lot more expensive in terms of legal process and administration as well, because the relationships of anyone who might be entitled to benefit from your estate needs to be proven legally. This is usually done by getting evidence from births deaths and marriages, or in some cases you need a genealogist or a private investigator needs to be hired to find people in order to trace those family records. So that can cost a lot of money.  

I would also say that, if you make a will, it kind of provides a bit of a roadmap for your loved ones and tells them what you want to happen. If you don't have a will, often they don't know. I've dealt with estates where there was no will, or there was a will that didn't have any funeral instructions, or the friends didn't know what the person would have wanted. And it causes a lot of stress on top of the fact that people are actually grieving. So you know, just think of it as a you're also helping out your loved ones by putting your will in place, and letting them know what it is that you'd and it can give them some peace of mind as well, to know that your wishes are being carried out. 

Yeah, that's something I didn't actually think about. I think – and I'm sure I'm not the only one – okay, a will, it's for me, but it's actually more for other people, isn't it?  

Well, it can be and families are complicated these days. You know, it's a lot less common that we just have the usual nuclear family. You know, a lot of people don't get married, some people are in more than one relationship, they have children from different relationships, we have blended families, people have family trusts, there's all kinds of aspects that can come into play which complicate matters. And I guess you can say that when you have your will in place, that's just a part of what just helps to set out your plan.  

Now, I also wanted to ask, there are a few terms that are used in relation to wills. Trustees, beneficiaries, executives - what do some of these terms actually mean? What is a beneficiary when we're talking about wills? 

Right, so a beneficiary is a person or it could be an organisation or charity. It's whoever is going to receive something under the will. So it could be your sister who's going to get your toy ragdoll in your will, or it could be your child who's going to receive that gift of $100,000 from your estate. That beneficiary is whoever is going to receive something under the will. 

And how about executor, what does that refer to? 

So the executor is the person or a trustee company that’s responsible for administering the estate. So what that involves is administering the assets, so collecting the assets of the estates and distributing them out, paying them out or transferring to the people who are named in the will as the beneficiaries. Technically also, the executor is responsible for dealing with the funeral, making sure the debts are paid, dealing with any tax liabilities.  

Usually in your will you would say ‘I appoint so and so as my executor and trustee.’ So I've just explained what executor is. Sometimes, estates are held in trust for a period of time and that could be if for example the beneficiaries of the estate were children and they were too young to actually have the estate paid out to them. So that means that the estate has to be held until they are old enough. So at that point the executor then becomes a trustee and the trustee’s job is to hold the estate for those children until they're old enough to receive it. So that's why they say in the will 'I appoint so and so as my executor and trustee.’ Covering off both of those points. 

Thanks for clarifying that - I'm learning a lot!  

What are some of the misconceptions that people have around well as I'm sure that you know, you get lots of questions from people all the time as part of your job and read and say things yeah, there's certain things that that people don't get quite right or kind of don't understand as well as they should? 

There are a few things that I've come across quite regularly. As I mentioned before, about your will being becoming invalid if you get married and you haven't made your will in contemplation of marrying your partner. That usually surprises people they’re quite often surprised to hear that the will that they made 20 years ago before they met their current spouse is no longer valid. 

Another misconception I guess is that oh well it doesn't matter if I haven't got a will because it's just going to go to the kids or it's just going to go to my wife. It's not necessarily the case under the law. 

Other misconceptions might include who can witness the will. So I've read some things online recently that some people think it has to be a lawyer or a JP that can witness a will. It's not true  - actually anybody can witness a will. As long as you're an adult and you are not going to receive anything under the will or you're not married to or a partner of anybody who's receiving something under the will.  

Alright I’ve learnt so much today – thank you! Is there anything that you'd like to leave people with? 

I think these days it's a lot easier than what it has ever been to get a will in place. I've been working in this industry for a couple of decades now and I've seen what happens when people haven't made a will. I've seen how hard it can be on their family or the loved ones that they leave behind. I've seen the arguments that can come up as well. I think it's probably a good – I wouldn't say a habit – but it's a good thing to just to get into your mind. You know you update your insurance every year, if you've got a property you're reviewing your mortgage, you're you know, you're trying to save money in a bank account. All those sorts of things that you're looking at on a fairly regular basis and also thinking about when your circumstances change.  

If you can just make it your habit to sort of say ‘actually, maybe I need to think about a will because this has happened’ or ‘I've got KiwiSaver, well I need to think about getting a will’ and then you know something changes – ‘maybe I need to update my will’.  

I think it's just a really good habit to get into as part of just your general financial life planning. And like I said, it's easier now than it's ever been. I think a lot of people sometimes feel a little bit worried about the process because it is kind of thinking about what's gonna happen when you die. But often after I’ve had a meeting with them and talked about it, I often get told, ‘oh, actually, that was a lot easier than I thought. And now it's done.’ You know, you've got a will in place. So I would just say, just say, go ahead, have a look online if your circumstances are simple. If not, just pick up the phone. 

It sounds like one of those things that you kind of put off or you don't want to think about, but once you actually do it, it's done. And then it's just a case of updating it from time to time with these, you know, there's a big life event or something changes. 

Yeah, and often people say to me, ‘oh, it's always been in the back of my mind that I have to do it, but I just never got around to it.’ And ‘oh, now I wish I'd done it sooner’ and 'now it's good to have everything in place, and it gives a bit of peace of mind.’ Once it's done, then you've got things sorted. 

Fantastic. Well, thanks so much, Kellie. As I said, I've picked up a lot of things and learned a lot and those misconceptions that you talked about particularly, were really interesting. There were some things that I definitely didn't know. Thanks again for joining us. 

You're so welcome. Thank you for having me.  

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