Why You Need to Plan Your Estate

Elderly couple smiling at lawyer out of frame holding paperwork.Do you really need an estate planning lawyer? Well, if you want your assets looked after in a particular way after you pass away, the answer is yes. Planning your estate can be complicated, but it’s very important—a well-planned estate safeguards your assets from potential creditors, relationship claims, and ensure your wealth benefits those you want it to.

For further details on why a professionally planned estate is the best way to safeguard your future, read on.

Future Creditor Claims

Typically, you will only need to be concerned about protecting assets from possible future creditors if you are a company director. A common way to protect these types of commercial assets is to transfer them to a family trust. This means your assets are no longer owned by you, and therefore cannot legally be claimed by creditors claiming your business assets.

This usually doesn’t work when existing creditors are involved. It’s only worth doing in order to protect your assets from future creditors, who may become involved after your death.

Furthermore, there are a variety of circumstances under which a court might be able to reverse the transfer of assets into a family trust, such as if the court suspects the transfer was made specifically to thwart a claim by another person.

Relationship Property Claims

If you are currently married, have previously been married, or in a civil union or you are in a de facto relationship (i.e. you have been living together as a couple for at least three years), then your relationship property is considered to be owned equally. This can include property you purchased before the relationship, even a house. It also may include savings, such as your KiwiSaver. Once you have passed away, this remains in effect.

A surviving partner can divide relationship property by applying to the High Court. They can automatically accept what you have willed them, but if you don’t have a will, they can accept relationship property based on the intestacy rules.

As you can imagine, this can get tricky. If you have children from a prior relationship that you’d like to prioritise, but you don’t have a will and your estate is of a certain size, under intestacy, your partner automatically gets everything, and nothing will go to your children.

Finally, consider that if your assets are left to your partner, and they re-marry, your assets could end up as relationship property in this new relationship, meaning that you may unintentionally disinherit your children.

There are multiple options when it comes to planning your estate to future-proof it for relationship property claims, including contracting out agreements (prenups), or life-interest wills.

Want to know more?

If you don’t have any plans for your estate in place, or you do, but they were drafted several years ago, it’s important to seek counsel. Don’t leave it up to chance—for the benefit of your family, plan your estate today. For the best estate planning attorney in Wellington, get in touch with one of the team here at Breaden McCardle Lawyers.