If you have KiwiSaver or investments, here’s why you need a will
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Having a will is one of the most important things you can do to help protect you and your whānau. It’s especially important if you have assets, such as an investment portfolio or a KiwiSaver account, or sentimental items that you’d like to pass on.
What is a will?
A will is a legal document that sets out your wishes for your assets - including property, investments and your KiwiSaver account. It can also cover your wishes for any special items, names a testamentary guardian for any young children, what you’d like to happen to any pets and your funeral arrangements and burial wishes.
Why do I need a will if I have investments?
When someone dies and they have assets worth $40,000 or more in one institution (this could be in their KiwiSaver account, investments, a bank account or a house), an order from the High Court is needed before the estate administration process can go ahead.
Without a will, this process can be complex, time consuming, and stressful for family who are already going through a difficult time. It also means that your wishes may not be carried out as you would have liked.
“You don’t need a lot of money and assets to have a will and we encourage everyone over 18 to have one,” says Glenys Talivai, Public Trust’s chief executive.
Why does my KiwiSaver account matter?
When you think of what assets you have, it’s easy to forget or overlook your KiwiSaver account. You might not check your account very often.
“For many of us, our KiwiSaver and investment portfolio will form a key part of our retirement savings and our overall wealth,” Talivai says.
Talivai said there are around 3.4 million people with KiwiSaver accounts. With the average balance around $37,000, there are more of us who need a will than we realise, she says.
“A will is a way to clearly outline your wishes for what you’d like to happen to important assets of yours, like your KiwiSaver account.”
How do I decide how I’d like my assets divided?
In your will, you can specify what you’d like to have happen to your assets. For example, you could decide that everything you own is to be divided equally between your children, or assign different percentages to different family members, friends or charities. We recommend keeping it simple to avoid complexity for your family.
Other decisions include whether you want your assets liquidated and divided amongst your beneficiaries. Or you may wish to specifically gift your entire investment portfolio to someone who will carry it on. For example, you may have a younger relative who has a real interest in shares and you’d like to gift some specific shares to them.
“You may also decide that you want your loved ones to have the potential to maximise the long-term benefits of keeping the portfolio invested, instead of selling,” explains Talivai.
We recommend getting professional advice to help guide you in your decisions.
Start the conversations with loved ones
Talivai says it can be confronting to discuss what happens when you die but having these conversations with your loved ones before they are needed benefits everyone.
She says that while these conversations can be difficult, having a will set up is one of the best gifts you can give your loved ones, as it can make things easier down the track.