Updating your will is a crucial aspect of estate planning that ensures your wishes are accurately reflected and legally enforceable. Here are several compelling reasons why you should consider updating your will:
1. Changes in Family Dynamics
Life is full of changes, and your family dynamics can shift significantly over time. Events such as marriage, divorce, the birth of children or grandchildren, or the death of a beneficiary can all necessitate updates to your will. For instance, if you have remarried, you may want to include your new spouse or stepchildren in your will. Conversely, if you have divorced, you might want to remove your ex-spouse as a beneficiary.
Likewise if a minor has become of age, and you have concerns regarding their capacity to receive your estate then you may want to include some safe guards.
2. Changes in Assets
Your financial situation can change dramatically over the years. You might acquire new assets such as property, investments, or businesses, or you might sell or lose assets that were previously included in your will. Updating your will ensures that all your current assets are accounted for and distributed according to your wishes.
3. Changes in Relationships
Relationships evolve, and people who were once close to you may no longer be part of your life, while new important relationships may have formed. Updating your will allows you to reflect these changes, ensuring that your estate is distributed to those who matter most to you.
If you make a will and then later get married or enter a civil union, your will is automatically cancelled.
Equally, if you have started a business or formed a trust we recommend you update your Will.
4. Changes in Law
Tax laws and estate planning regulations can change, potentially affecting how your estate is taxed and distributed. For example, the basic trustee tax rate in New Zealand ihas changed from 33% to 39% from 1 April 2024, for Trusts with revenue greater than $10k per annum. Keeping your will updated ensures that it complies with current laws and takes advantage of any new legal benefits.
We've seen instances of property transferring into a trust on death, for the protection of the remaining spouse, but with the Brightline rules in some instances this may result in unintended tax obligations, not to mention the compliance costs.
5. Avoiding Disputes
An outdated will can lead to confusion and disputes among your beneficiaries. By regularly updating your will, you can provide clear instructions and reduce the likelihood of conflicts. This is particularly important if you have a complex family structure or significant assets.
6. Reflecting Charitable Intentions
If you have developed a desire to support charitable causes, updating your will allows you to include bequests to charities or organisations that are important to you. This ensures that your philanthropic goals are honoured after your passing.
7. Appointing Guardians for Minor Children
If you have minor children, your will should designate guardians who will take care of them in the event of your death. As your children grow and your relationships with potential guardians change, it’s important to update this information to ensure your children are cared for by the right people.
8. Updating Executors and Trustees
The individuals you initially chose as executors or trustees may no longer be the best fit for these roles due to changes in their circumstances or your relationship with them. Updating your will allows you to appoint new executors or trustees who are better suited to manage your estate.
9. Reflecting Personal Wishes
Your personal wishes and priorities may change over time. Regularly updating your will ensures that it accurately reflects your current desires, whether it’s regarding the distribution of specific items, funeral arrangements, or other personal matters.
10. Ensuring Legal Validity
Over time, the legal requirements for a valid will may change. Regularly reviewing and updating your will with the help of a legal professional ensures that it remains legally valid and enforceable.
Is my Will still valid if I separate or get a divorce?
In New Zealand, the validity of your will can be affected by separation or divorce, but it does not automatically become invalid. Here are some practical steps to consider:
Consult a Legal Professional: Seek advice from a lawyer who specialises in wills and estate planning to understand the specific implications of your separation or divorce on your will.
Update Beneficiaries: Review and update the beneficiaries in your will to reflect your current intentions.
Appoint New Executors and Trustees: If your ex-spouse was named as an executor or trustee, appoint new individuals to these roles.
Consider Guardianship: If you have minor children, ensure that the guardianship provisions in your will are up to date and reflect your current wishes.
While separation or divorce does not automatically invalidate your entire will, it can significantly impact its provisions. To ensure that your estate is managed and distributed according to your current wishes, it is essential to review and update your will promptly after such life events.
Conclusion
Updating your will is an essential part of maintaining an effective estate plan. It ensures that your current wishes are honoured, reduces the potential for disputes, and keeps your estate plan compliant with current laws. Regularly reviewing and updating your will can provide peace of mind, knowing that your loved ones will be taken care of according to your intentions.
Comments