5 financially important questions most Kiwis don’t think to ask!
At Public Trust, we’re all for improving the financial smarts of Kiwis. That’s why Money Week is a worthy cause – a chance for people to openly talk about money matters. We thought we’d do our part too, with a few Q&A’s on wills and EPAs. Sure, it’s not as exciting as the share market or home loans, but wills and EPAs play a big role in how you build and protect your legacy. And they’re definitely worth knowing about sooner rather than later. So, without further ado...
1. What happens if I ‘cross over’ without a will?
Firstly, a moment’s silence... you would be sorely missed. Okay, so this is probably not what you’d call a best-case scenario, particularly for loved ones.
If you pass away without a will, any money, property, personal belongings, even your KiwiSaver, can get bundled up into a world of admin and process, which can go on for months longer than it has to. Not a great experience for your nearest and dearest when they’re also coming to grips with your passing.
The good news is, this is easily avoidable. Making a will doesn’t have to be complicated or time-consuming. And your assets will be more easily transferred to the people who matter most (after you’ve departed).
To find out more about getting your post-life affairs in order, check our write-up about demystifying wills. It’s well worth a few minutes’ read.
2. Apart from cash and property, what else are wills good for?
The short answer is... a lot! Naturally, you’ll want friends and family to benefit from your financial achievements but, as the saying goes, there’s more to life than money.
A will can also be a deeply meaningful way to say your good-byes, express your love for friends and family and ensure your final wishes are understood and fulfilled. This is also known as your ‘legacy’ and it can be as long as it is broad.
Perhaps you have certain personal items you’d like someone to have. You can express who you’d like to look after your children. Or pets for that matter. You may have charities you’d like to support.
Of course, ensuring your legacy lives on does require a bit of think-time. You may find some useful tips in our article on building your legacy.
3. Exactly when should I update my will?
It’s a good question – and a good response would be ‘before it’s too late’. However, you might be looking for something a little more definitive. So, let’s explore this further, because it can be quite important.
As a general rule, we advise people to review their wills if they’ve experienced a ‘significant life change’. This could be any number of things. A new relationship or marriage, for instance. A new human (child/grandchild). Maybe you’ve purchased a new home or even started a new business. There’s no conclusive list, but you get the idea.
Of course, sometimes these things creep up on you. Or you’re just too busy watching Netflix. Either way, a smart idea is to check your will at least every five years. For more on updating wills, head to our ‘7 reasons to update your will’ article.
4. EPA... What is this mysterious acronym?
Isn’t it annoying when you’re expected to understand random groups of capital letters? But in this case, EPA is one acronym you really should know about. It stands for Enduring Power of Attorney, which is a document everyone adult should have.
While an EPA might sound kind of legal and complicated, in simple terms it sets out who will look after your personal and financial matters when you can’t do it yourself – usually because of sickness or injury.
There are two types of EPAs: One for property and finance, and another for your welfare and personal care. You’ll want to have a good think about who would be best to look after your affairs if it became necessary. We won’t go into detail here, but if you have a few moments, you can get a good rundown of EPAs on our website.
Sorting out an EPA can actually be quite easy and affordable. It’s certainly something we recommend people do.
5. Who or what is an executor?
Admittedly, this isn’t the most user-friendly term, but it’s actually quite straightforward. An executor is simply the person you choose to be in charge of overseeing your will – after you’ve gone.
Deciding who your executor will be is something you want to carefully consider. Yes, it can be a big honour, but it’s also a big responsibility and can take up a lot of time – often months!
Your executor’s job is to carry out the instructions in your will. Aside from distributing your assets, this also includes plenty of administrative tasks like closing bank accounts, paying off debts and taxes, and even helping with funeral plans.
If this seems like too much of a burden, you can assign a professional executor. This will involve fees, but it can be a good option – keep in mind this will be a difficult time for friends and loved ones.
For more info about executors and how to choose one, take a look at our past blog post, which includes a handy 2-minute video.
Like to know more about wills or EPAs?
No problems... that’s what we’re here for. A good place to start is back on our help & resources hub, which covers off most topics. You’ll find our website very informative too.