It’s essential to have a plan for what happens to your assets and finances after you pass away. Even if your estate is modest it is important to have even a simple plan in place to protect your wishes and avoid confusion and disputes.
Below we outline the steps that need to be followed. Hopefully this helps to make it seem like a less daunting task.
Write a will
Writing a will is the first thing to take care of. If you pass away without a will your assets and finances will be distributed according to New Zealand Law. Writing a will doesn’t have to be a hard task but should be well thought out. It will outline what will happen to your money and property and can include instructions for your funeral.
Funeral Essentials
It can be a hard thing to think about, your own funeral, but it is important to consider how your ceremony will go and the costs that will need to be allocated to this. Things you should include are; people who should be notified of your passing, a record of your personal information and the arrangements of your funeral.
Costs
The average cost of a funeral in New Zealand is $8,000 – $10,000. Funeral insurance is often taken as it will help with these costs and any other expenses that may come up such as outstanding debts. This helps make the time easier on your loved ones who are carrying out your funeral plans and protects them from financial stress.
If you have life insurance and are hoping to use this to cover your funeral costs it is important to consider that it can take 18 months for the life insurance policy to be paid to your estate. This can be avoided by having a nominated beneficiary but it is best to speak to your insurance provider so you know what will happen with your policy payment when you pass away.
Debts
The person chosen to execute your will is responsible for paying any outstanding debts you have. Outstanding debts will be paid from your estate before the beneficiaries of your estate are paid. To make things flow as smoothly as possible you can have your financial statements in order and leave instructions for the person executing your will.
There are different tax situations that will be relative to your assets. It is important to understand these. It’s recommend to talk to a financial advisor about how your assets will be effected when you pass them on.
It is also important to understand the tax situation around your assets. Talking to a financial advisor about how New Zealand tax law may impact what is passed on to your beneficiaries is highly recommended.
If you have any questions or are looking for help with your estate planning, please get in touch.