Essential Estate Planning Documents Everyone Should Have
Estate planning is a crucial process that ensures your assets and wishes are properly managed and carried out after your passing. While it may seem daunting, having the right documents in place can provide peace of mind for you and your loved ones. In New Zealand, there are several essential estate planning documents that everyone should consider having. Let’s explore these in detail.
Will
A will is the cornerstone of any estate plan. It’s a legal document that outlines how you want your assets distributed after your death. In New Zealand, if you pass away without a will, you’re considered to have died ‘intestate’, which means your assets will be distributed according to New Zealand law, potentially not aligning with your wishes.
Your will should include:
- Distribution of physical assets (real estate, vehicles, furniture, etc.)
- Allocation of sentimental items (photo albums, family heirlooms)
- Distribution of financial assets (bank accounts, investments, KiwiSaver)
- Appointment of an executor
- Guardian nominations for minor children
While it’s possible to write your own will using online kits or templates, it’s highly recommended to have it reviewed by a legal professional, especially if you have complex affairs or a blended family situation.
Enduring Power of Attorney (EPA)
An Enduring Power of Attorney is a crucial document that allows someone to make decisions on your behalf if you become incapacitated. In New Zealand, there are two types of EPAs:
- EPA for Property: This allows your appointed attorney to manage your financial and property matters.
- EPA for Personal Care and Welfare: This enables your attorney to make decisions about your personal care and welfare, including medical decisions.
It’s important to note that these powers only come into effect if you lose mental capacity, ensuring you maintain control of your affairs while you’re able.
Advanced Directive (Living Will)
An Advanced Directive, also known as a Living Will, is a document that outlines your wishes for medical treatment if you’re unable to communicate these yourself. This can include decisions about life support, pain relief, and other medical interventions.
While not legally binding in New Zealand, an Advanced Directive can provide valuable guidance to your family and medical professionals about your preferences for end-of-life care.
Memorandum of Wishes
A Memorandum of Wishes is a non-binding document that accompanies your will. It provides more detailed instructions or explanations about your wishes that may not be appropriate to include in your will. This could include:
- Reasons for specific bequests
- Guidance for guardians of minor children
- Funeral preferences
- Distribution of personal items not specifically mentioned in the will
While not legally binding, this document can provide valuable context for your executor and beneficiaries.
Trust Deed
If you’ve established a trust as part of your estate planning, the trust deed is a crucial document. It outlines the terms of the trust, including:
- The purpose of the trust
- Who the beneficiaries are
- How assets are to be managed and distributed
- The powers and responsibilities of the trustees
Trusts can be complex, so it’s essential to seek professional advice when setting one up.
Document Checklist
A document checklist is a practical tool that can save time and stress for your executor. This should include:
- Location of important documents (will, EPAs, etc.)
- List of assets and liabilities
- Bank account details
- Insurance policies
- Share portfolio summaries
- Contact information for key people (accountant, lawyer, etc.)
Estate Information Form
An estate information form is a comprehensive document that provides all the necessary information about your estate. This might include:
- Personal details
- Family information
- Details of assets and liabilities
- Information about any businesses you own
- Details of any trusts you’re involved with
This form can be invaluable for your executor in managing your estate efficiently.
Estate planning is not just for the wealthy or the elderly. Regardless of your age or financial situation, having these essential documents in place can ensure your wishes are respected and your loved ones are protected. It’s important to review and update these documents regularly, especially after significant life events such as marriage, divorce, or the birth of children.
Remember, while there are many online resources available, estate planning can be complex. It’s always advisable to seek professional legal and financial advice to ensure your estate plan is robust and tailored to your specific circumstances. By taking the time to prepare these essential documents, you can provide clarity and security for your loved ones during what will undoubtedly be a difficult time.