Inheritance Planning, Estate Administration & Senior Law Archives

Enduring Power of Attorney – Prepare for the unexpected

Written by publik.nz on 30 September 2024. Posted in Inheritance Planning, Estate Administration & Senior Law.

Martha Phillips

30 September 2024

Life is unpredictable, and while we hope for the best, it is wise to be prepared for the unexpected. One crucial aspect of this preparation is understanding and establishing an Enduring Power of Attorney (EPOA). This legal document can provide peace of mind and ensure your affairs are managed according to your wishes, even if you become unable to make decisions yourself.

What is an Enduring Power of Attorney?

An EPOA is a legal document that grants another person, known as the attorney, the authority to make decisions on your behalf. This means that if you lose mental capacity to make your own decisions, your chosen attorney or attorneys can manage your affairs without interruption, ensuring continuity and stability.

Types of Enduring Power of Attorney

There are two types of EPOAs:

Property EPOA: This allows your appointed attorney(s) to manage your financial affairs, such as paying your bills, managing your investments, and handling property transactions. A Property EPOA can grant authority to your attorney(s) whilst you have mental capacity with such authority to continue even if you have lost mental capacity OR it can specify that authority is only granted if you have lost mental capacity.
Personal Care and Welfare EPOA: This grants your appointed attorney(s) authority, only if you have lost capacity, to make healthcare decisions on your behalf, including consent to medical treatments and decisions about long-term care.
A medical certificate by a suitably qualified practitioner confirming your incapacity is always required before this enduring power of attorney commences.

Why do you need an Enduring Power of Attorney?

Peace of Mind: Knowing that someone you have chosen and trust will manage your affairs if you become unable to do so yourself can provide significant peace of mind. It ensures that your financial and medical decisions are handled according to your wishes.
Avoiding Legal Complications: Without an EPOA, your loved ones might need to go through a lengthy and costly Court process to gain the authority to manage your affairs. Having an EPOA in place avoids this otherwise unnecessary legal application, and saves you and your family stress, cost, and time when it matters most.
Protecting Your Interests: An EPOA ensures that your interests are protected by someone you have chosen who understands your values and preferences. This is particularly important for medical decisions, where your attorney can advocate for your preferred treatments and care options.
Continuity in Financial Management: If you become mentally incapacitated, your financial affairs can quickly become complicated. An EPOA allows your attorney to seamlessly manage your finances, ensuring bills are paid, investments are managed, and your financial security is maintained.
Personalised Decision-Making: By appointing an attorney, you can choose someone who knows you well and understands your personal preferences and financial goals.

How to establish an Enduring Power of Attorney

Creating an EPOA involves several steps:

Choose Your Attorney or Attorneys: Select someone you trust implicitly, as they will have significant authority over your affairs. It is often a close family member or a trusted friend who is appointed.
Consult a Legal Professional: There are many rules and legal requirements that need to be considered when drafting EPOAs such as how many attorneys you can appoint to act at one time, the appointment of successor attorneys, the ability for attorneys to self-benefit or benefit others, the intended scope of the specific EPOA, how EPOAs can be activated and revoked and if and when Doctors’ certificates of incapacity are required. It is therefore advisable to consult with a lawyer to ensure the EPOA is correctly drafted and signed by you and by your attorney(s).
Consider the Extent of the Powers Granted: Clearly outline the powers you are granting to your attorney. You can include specific instructions for financial management and healthcare decisions, or you can simply have the Property EPOA cover all your property and the Personal Care and Welfare EPOA cover all personal care and welfare matters.
Communicate Your Wishes: Discuss your wishes and expectations with your chosen attorney to ensure they understand your preferences and are prepared to act on your behalf.
Executing the Document: The EPOA must be disclosed to you and signed and witnessed with a practising solicitor or registered legal executive.

An Enduring Power of Attorney is a vital tool in planning for the future. It ensures that your affairs are managed according to your wishes, even if you become unable to make decisions yourself. By establishing an EPOA, you can protect your interests, provide peace of mind for your loved ones, and avoid unnecessary legal complications. It is a proactive step that can make a significant difference in times of uncertainty.

Contact us to get your EPOAs in place

Contact Pitt & Moore on 03 5488349. Our team are here to provide you with personalised assistance and guidance.

Wills Month – is yours up to date?

Written by publik.nz on 28 August 2024. Posted in Inheritance Planning, Estate Administration & Senior Law.

Emma Marshall

28 August 2024

For some, creating a Will can feel like a very daunting prospect, especially for those who rarely engage with lawyers or do not feel comfortable discussing what should happen after they pass away. Others may not see their assets as worthy of a Will. And some people simply do not know what having an up-to-date Will means for them or their loved ones.

In fact, it is estimated that half of Kiwi adults do not have a Will at all.

This is why, every September, New Zealand shines a light on the importance of estate planning through Wills Month. Wills Month serves as a vital reminder for New Zealanders to update or create this all-important record to ensure their wishes are honoured after passing away.

Creating a Will is a straightforward process that provides significant benefits in terms of legal clarity, financial efficiency, and personal peace of mind for both the individual and their loved ones.

A Will ensures that everything you own now and in the future goes to the people and organisations you care most about. They are not just for those with significant assets, every adult (and in some instances, people under 18) should have a Will.

Younger adults in particular often think they have no need for a Will but overlook forgetting they have a Kiwisaver investment. In these situations, with no Will, a full intestacy application is required to liquidate and distribute this one asset.

Once you die, everything you own and everything you owe, is called your “Estate”, so it’s not just money you need to think about, but all your possessions and debt.

What happens if I die without a Will?

If you die intestate, which means you don’t have a Will in place when you die, the Administration Act 1969 will decide how your assets are to be divided amongst your family members by setting out an order of priority with rules and limitations around who will get what and how much. This could result in your loved ones not being taken care of as you would have wanted.

The process of administering an intestate estate can be more complicated and costly than when a Will is present. It can leave your loved ones with a situation that is complex, expensive, time consuming and stressful.

What can I include in my Will?

Your Will can include a wide range of instructions, for example:

your funeral wishes and whether you want to be an organ donor
appointing an executor who is the person responsible for applying to the High Court for Probate, collecting all your assets, paying all your debts, carrying out your wishes and distributing your property under your Will, and dealing with any disputes.
appointing a Testamentary Guardian to care for your children.
gifting of a specific item or amount of money to a charity, friend or family member.
gifting of shares in a business.
dealing with certain overseas assets and liabilities.

Wills Month acts as a timely reminder to get your Will in place or to update an existing one. Once you have a Will, it is important to review it regularly and update it when things change in your life. A change in your financial situation or your relationship status, a new addition to the family, or coming into possession of a family heirloom you want to leave to someone are all situations that warrant a Will update.

Get in Touch

Although discussing what is to happen after you die can be an awkward topic and something many of us do not want to think about, let alone plan for, the team at Pitt & Moore are here to make the process as smooth as possible with our personalised assistance and guidance.

To celebrate Wills Month, for every Will signed with us in September we are donating $50 to the Nelson Tasman Hospice.

Support your local hospice and start your Will with us today at the link below or contact us at Pitt & Moore on 03 5488349.

What happens if I die without a Will?

Written by Alister on 3 July 2024. Posted in Inheritance Planning, Estate Administration & Senior Law.

Angeline Cousins

July 2024

Discussing what is to happen after you die can be an awkward topic and something many of us do not want to think about, let alone plan for.

Once you die, everything you own and everything you owe, is called your “Estate”, so it’s not just money you need to think about, but all your possessions and debt.

What happens if I die without a Will?

Passing away without a Will is referred to as dying “Intestate”. When this happens, the Administration Act 1969 will decide how your assets are to be divided amongst your family members by setting out an order of priority with rules and limitations around who will get what and how much.

The basic order of priority is:

Spouse, civil union partner or de facto partner;
Children, regardless of whether the parents were married;
Parents;
Brothers and sisters;
Grandparents;
Uncles and aunts;
If none of the above parties exist, the New Zealand Government will receive your property.

The law could determine that:

If there is a spouse or partner, but no parents or children, the spouse receives your entire estate.
If there is a spouse or partner and children, dependent on the value of your estate, some (or all) may pass to your spouse, but some may also go to your children.

The Process

When someone dies intestate, your family member (wife, husband, partner or children) cannot touch your estate without the authority from the Court. A member of your family will need to apply to the High Court for permission to be the ‘Administrator’ of your estate. In some instances, the Court will appoint someone to administer your estate, and this may not be the person you would have chosen.
Your estate will be distributed by the Administrator according to a set formula in the Administration Act 1969 which could result in your loved ones not being taken care of as you would have wanted. This would not happen if you had a Will, as you would have appointed a person of your choice to be your Executor(s) to distribute your property to the people who you want to inherit your property according to your instructions and wishes in your Will.

Who can make a Will

A person of 18 years or over may make a Will. A person under 18 may make a will if they are, or have been, married or in a civil union or de facto relationship. Others under the age of 18 can make a will if given approval by the Family Court or if they are in the military or a seagoing person, join the Armed forces for operational service, or join a ship as a seafarer.

When to make a Will

Every adult (18 years or older) with more than $15,000 of assets (including savings, KiwiSaver and shares) should have a will. Even if your assets do not exceed $15,000 you should have a Will. You may have some money in a savings account, a car, furniture and household items, electronic gaming devices, jewellery etc., that you want to gift to specific family members or friends. Having a Will ensures that these items will be gifted according to your wishes.

Things you could include in your Will

Your Will can include a wide range of instructions, for example:

your funeral wishes and whether you want to be an organ donor;
appointing an executor who is the person responsible for applying to the High Court for Probate, collecting all your assets, paying all your debts, carrying out your wishes under your Will and dealing with any disputes.
appointing a Testamentary Guardian to care for your children. Note that Testamentary Guardians are not responsible for the day-to-day care of your child and their role generally ends when the child turns 18 years old.
gifting of a specific item or amount of money to a charity or friend;
gifting of shares in a business;
dealing with your overseas assets and liabilities, however, depending on the country the assets are held in and the value and the type of these assets, it may be best to have a Will in that country.

Once you have a Will, it is important to review it regularly and update it when things change in your life such as a change in your financial situation or your relationship status (i.e. if you get married/divorced/separated), a new addition to the family, or if you become in possession of specific family heirloom you want to leave to someone.

Conclusion

Not having a Will may result in unintended complications with loved ones not being adequately provided for or persons who you wanted to benefit being excluded. For instance, certain family members, close friends and charities do not automatically inherit anything under the rules of intestacy. This legal process can be costly, complicated, time consuming and not to mention stressful for your loved ones who will already be struggling at this challenging time. If dying intestate results in an unexpected distribution of your assets or one that is perceived to be unfair it can put pressure on what were, until your death, close and healthy family relationships.

If you die without a Will, you may leave your loved ones with a situation that is complex, expensive, time consuming and stressful. Save your loved ones stress, time, and money by making your Will today.

Get in Touch

Start your will today using the link below or for personalized assistance and guidance on preparing a Will, contact us at Pitt & Moore on 03 5488349.

last will and testament white printer paper

Choosing an Executor for Your Will in a Blended Family Situation

Written by Veneeta on 10 April 2024. Posted in Inheritance Planning, Estate Administration & Senior Law.

With the complexities that can arise in blended families, it is important to ensure that the directions in your will are carried out efficiently and fairly, providing peace of mind for you and your loved ones.

Choosing the right person to be an executor for your will is important.

Before choosing who is to act as executor, it is essential to understand what the role of executor encompasses. An executor is the person responsible for administering your estate after your death. This involves “getting in” or liquidating your assets, paying any debts, and then distributing your assets, and ensuring that your directions, as outlined in your will, are followed. In a blended family situation, the role of executor becomes even more significant, as there may be multiple beneficiaries with varying interests and needs.

When selecting an executor, you must choose someone who is able to be impartial, is confident in financial matters and also a good communicator, as there may be complex financial arrangements, such as multiple properties, businesses, and investments to deal with.

Most people choose those who are close to them. However, this can cause issues, especially in a blended family situation where conflicts can arise due to the involvement of stepchildren, former spouses or partners, and multiple families.

It can be helpful to appoint someone who is seen by the beneficiaries (who may be children from each partner/spouse’s earlier relationships) as neutral in the sense of not being a beneficiary and not related to you. Alternatively, appointing a person to act as executor from each side of the family, (for example, a child of each partner or spouse who are able to work well together), may sometimes be appropriate.

We recommend that you choose more than one person to be your executor, and who can navigate such complexities fairly or, if you decide to appoint only one person to act in the first instance, you appoint a successor person in the event that the first appointed person is unable or unwilling to act. If finding the right people proves to be a difficult decision for you, then you may wish to consider appointing an executor, provided by a law-firm or other professional organisation, such as Pitt & Moore Lawyers.

We recommend that you consult with a legal professional for guidance when selecting executors for your blended family will. Seeking legal advice can help address any concerns or complexities specific to your situation, ensuring that your estate is handled in accordance with your wishes and the law and helping to avoid conflicts and disputes arising after you have died.

If you would like more in-depth advice or further information about the content of this article, please get in touch with the team at Pitt & Moore on 03 5488349.

Who to Call…

Written by Pitt & Moore Admin on 22 September 2020. Posted in Agribusiness & Rural, Inheritance Planning, Estate Administration & Senior Law, Trusts and wealth management.

I recently received a call from a farming client who I will call Bob. Bob recently experienced a bereavement of a close family member and he wanted to discuss the estate administration.

It became apparent during our conversation that life is tough for him at the moment and he feels like he’s walking through treacle. Bob also had other issues on his plate, at this stage all fairly minor, one with a contractor, another with a tenant and yet another arising from the Trusts Act 2019. On top of that were issues that were not strictly legal matters and more to do with family dynamics.

Bob didn’t feel the need to get legal advice on any of these matters outside of the estate administration largely due the fact the issues themselves weren’t overly significant and because he didn’t see the need for a ‘legal response’. And fair enough too, the cost of legal advice can at times seem disproportionate to the issue at hand.

But, as a consequence of Bob and I talking through the issues at a relatively high level we were able to create a plan for Bob and that left Bob feeling empowered and most importantly, no longer feeling overwhelmed. And that is the part of my job that I enjoy and treasure the most, being able to help guide people to their destination whatever or wherever that might be.

It made me reflect that not infrequently when I talk with clients, some issues which could have been ‘nipped in the bud’, have fully bloomed – because in part, the client thought it was too early to call in the lawyers. And again it is understandable that most people don’t reach for the phone and dial 0800-lawyer at the first sign of trouble or the embarking of an exciting new venture. But so often a small amount of time spent with a lawyer sooner rather than later is time well spent. I particularly think this is true for those in the rural sector where forging a livelihood takes a significant level of determination, confidence and resilience. And is an environment where time and money can often be in short supply. Having trusted advisors walking next to you, pointing out the pitfalls and hazards and giving you an objective sounding board is enormously beneficial. And having those discussions earlier rather than later is enormously cost effective.

It is my view that the role of a lawyer is not to know all the answers all of the time (an impossible goal) but rather to know where or how to find the answers, to provide objective advice and to shoulder some of the worry. So, my message in a nutshell – if you have an issue that’s troubling you even only a little, call your lawyer to talk it through.

Greater Transparency for Trusts in New Zealand

Written by Pitt & Moore Admin on 19 March 2020. Posted in Inheritance Planning, Estate Administration & Senior Law, Litigation and Dispute Resolution, Trusts and wealth management.

Significant changes are on the horizon for the landscape of trust law. The Trusts Act 2019 (“Trusts Act”) comes into force on 30 January 2021.

Trusts are extremely prominent in New Zealand, it is estimated there are between 300,000 and 500,00 trusts in New Zealand. There are a vast number of reasons why trusts are set up, for example, asset protection and tax purposes.

The changes being adopted by the Trusts Act gives the beneficiaries of a trust more power to hold the trustees to account.

Changes in Trust Law

Trustees will be required to retain and hold on to integral trust documents which set out the terms of the trust, records of trust property and accounting and financial statements.

Upon request by a beneficiary, trustees may also be required to disclose trust information to beneficiaries who request it. This information can range from the fact that a person is a beneficiary, to the terms of the trust and the administration of the trust. Trustees can withhold information from beneficiaries if they reasonably consider it should not be disclosed.

Below are some of the factors trustees will consider when weighing up whether to disclose trust information to beneficiaries.

The nature of the beneficial interest (what does the beneficiary stand to receive from the trust);
Whether any personal or commercial sensitive information is present (confidentiality issue);
Age of beneficiary;
Expectations of the settlor; and
Context or necessity of any request for information

It is likely the weight each factor is given, will become more clear when trustees decide not to disclose, and their decisions are challenged by a beneficiary through the courts.

Steps to take in the interim

Over the next year, trustees should discuss the process they plan to follow in respect of retaining and disclosing information to beneficiaries. Where required, trustees should seek advice to ensure they follow the Trusts Act. If processes are put in place now, then adhering to the new Act will not be an issue. It will also mean that when trustees change, there will be a robust process in place, which enables the new trustee to get up to speed on their obligations quickly.

Summary

The new law regarding disclosure allows greater transparency of trusts in New Zealand. Whilst this is a positive, the change is also likely to bring about exposure to matters which were previously kept confidential, often for good reason. It is now more crucial than ever that trustees understand their obligations in their role.

Talk to us

For expert advice on this area talk to our Trusts and Estate Planning Team.

How Do I Challenge a Will?

Written by Pitt & Moore Admin on 25 September 2018. Posted in Inheritance Planning, Estate Administration & Senior Law, Litigation and Dispute Resolution, Trusts and wealth management.

There are many ways a will can be challenged and when making your own will it is important that you record the reasons why you are making the provisions that you are.

An upset relative or friend can bring a claim that a will should be declared invalid because the will-maker did not have the mental capacity to make a will, or was suffering from undue influence at the time the will was made.

The Family Protection Act 1955 also provides for a class of people (generally immediately family) to challenge a will on the basis that the will-maker owed them a moral duty to provide for their proper maintenance and support but breached that duty in making the provisions made for them.

A further line of attack is provided by the Law Reform (Testamentary Promises) Act 1949. This allows any person to claim that the will-maker made a promise to provide for them under their will in exchange for services provided them in their lifetime. The Court will force the deceased’s estate to honour that bargain provided there is sufficient credible evidence for that claim.

Fundamentally though, it is not easy to challenge a will. Courts are rightly loathe to interfere in the wishes of a will-maker about what should happen to their property after death.

The situation has become difficult with the prevalent use of trusts in more recent times. The property that a will-maker has transferred to a trust in his or her lifetime does not form part of the estate of that person. Other reasons that make challenging a will more difficult is the fact that we are all living longer, and may be more likely to have capacity issues alongside with the fact that many people are now having second, third, fourth, or even simultaneous relationships with children to those different partners.

Life is more complicated than it ever used to be and certainly more complicated than the law-makers back in 1949 or 1955 would have envisaged.

The whole area is fraught with complexity and because the area is highly discretionary can generally only be assessed on a case-by-case basis applying the principles that have been developed by the Courts since the mid-century. What the Courts are often faced with is a battle between the second or third partner and the deceased’s children. Or a battle between adult child siblings. A sensitive approach is always recommended, whatever the circumstances

Claims are often brought under both the Property (Relationships) Act 1976 and the Family Protection Act 1955.

Statutory timeframes mean a challenge has to be made within 6 to 12 months – the very time when family members are still in grieving. We encourage our clients to be firm on the issues but kind to all the people concerned. Such an approach is more likely to achieve resolution that all parties can agree on and give the parties involved the dignity to move on with their lives and not see the bulk of the deceased’s estate used up on legal fees. We are certain that no will-maker would want that!

Talk to us

For expert advice on these areas talk to our Litigation and Dispute Resolution Team.

Can You Trust a Trust to Protect Your Assets

Written by Pitt & Moore Admin on 18 May 2017. Posted in Family Law: Property & Separation Advice, Inheritance Planning, Estate Administration & Senior Law, Trusts and wealth management.

If your assets are in a trust they might not be as safe from creditors or relationship break-ups as you might think. The Courts are prepared to set aside or go around trust structures if it is justified.

Trust structures can be overturned in a number of different ways. These include if the trust has not been run properly; if it is really the “alter ego” of an individual or if the trust was really never intended to operate as a trust. If the trust structure is overturned then any benefits will be lost. For example, if the trust was established with a view to protecting assets from creditors’ claims, once overturned, those assets would be exposed. If the trust was established to hold and protect your family home from any subsequent relationships, the home will no longer be classified as “trust property” but classified as “relationship property” and therefore subject to Property (Relationships) Act, which generally presumes that both partners should share equally in the family home if their relationship is three years or more.

In the relationship property context, the Court of Appeal has recently ruled that trustees of a trust held the increase in value of a property not for the beneficiaries of the trust but for the benefit of the couple who had worked on the property. That meant it was “relationship property” not trust property and was to be shared equally. This is seen as a somewhat novel way to address efforts by a partner who was not a beneficiary of a trust and who otherwise would be unable to claim against any relationship property. The decision must be viewed against the legislative backdrop of the Property (Relationships) Act whereby all contributions, not just monetary, are considered.

When thinking about ways to protect your assets, consider a contracting out agreement instead of, or possibly as well as, a trust. Contracting out agreements allow partners to say what provisions of the Property (Relationships) Act won’t apply to their property interests in the event they separate or go into bankruptcy. Provided each person gets independent legal advice as to the effects and implications of the agreement they are hard to overturn as a challenger generally has to prove it was void due to a technicality or that it would give rise to serious injustice. For a creditor to overturn a contracting out agreement, they would generally have to prove that the agreement was entered into in order to defeat creditors. These are very high thresholds to meet.

Before you sign up to a trust it’s important to seek professional legal and accounting advice to consider whether it’s the right option or whether a contracting out agreement could better serve your needs. Good advice should also include how the trust should be administered in order to avoid potential court action later.

Talk to us

Contact our Litigation & Dispute Resolution Team today to discuss how we can assist you.

What is an Enduring Power of Attorney?

Types of Enduring Power of Attorney

Why do you need an Enduring Power of Attorney?

How to establish an Enduring Power of Attorney

What happens if I die without a Will?

What can I include in my Will?

Get in Touch

What happens if I die without a Will?

The Process

Who can make a Will

When to make a Will

Things you could include in your Will

Conclusion

Get in Touch

Changes in Trust Law

Steps to take in the interim

Summary

Talk to us

Talk to us

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