Wills are in the blood for Chris Kelly. His father worked for the Public Trust and now that Kelly is a lawyer, he sees a lot of them.
Naturally, he has seen some horror stories. Parents cutting children out of their wills, children from a first marriage contesting a second family's inheritance.
But for the most part, wills go smoothly and uncontested.
“When they work well, they work well.”
As people age, the number without wills drops, to the point where only 5 per cent of us die “intestate”.
But that figure doesn't capture the large number of people who have so few possessions that the matter does not need to go to court.
“If you go to the bank and say, 'my dad's died, all he's got is $10,000 in the bank and here's the funeral bill I've got to pay', the bank will give you some forms . . . they can pay out the money,” says Kelly.
For many of us, however, life is a lot messier. People marry, live in de facto or civil unions, divorce, remarry and sometimes have children to several partners.
And while it would be nice to think that all families deal with death harmoniously, the fact is that they don't.
“The thing I see most is elderly people coming in and they've had a bit of a falling out with someone in the family and they cut them out of their will,” says Kelly. “And it's really not a good idea.”
So his rule number one for will-making is: try to be fair.
“Don't play favourites,” says Kelly. “In the end you don't do anyone any great favours by giving them a big chunk of your estate if they then have to go to court and battle over it.”
Second marriages or partnerships can be particularly tricky. Sometimes the deceased cuts their children out altogether, which almost begs for a challenge.
Alternatively, the dead person leaves the second partner with a “life interest” in the house and the interest on any investments, with the remainder going to the children of the first relationship when they die. Usually no one is chuffed with this arrangement either, says Kelly.
“What you've then got is a second spouse who are usually a bit younger, who live longer than anyone anticipated, so as far as the children are concerned, they're never going to see their inheritance.
“The second spouse feels like she can't change house, she can't do anything with the money because it's all tied up… nobody's happy.”
So rule number two is: don't create a “trust-like” situation in your will.
Having said that, there is a place for family trusts. Assets placed in a trust while you are still alive are much more difficult to contest than a will because they are no longer part of your estate.
Otago University law professor Nicola Peart says it is equally common for beneficiaries to come to an arrangement, even if it goes against the original will.
“You could have a situation where, for example, dad is going to leave all his property to his daughter because he feels that his daughter is the one who needs the money and his son does not at all.
“And when dad dies, son gets really upset and the daughter may say, 'I agree, I don't think that's fair', and they split it between them. And the problem goes away.”
One of the best ways to future proof your will is to keep it up to date with changing circumstances, especially relationships.
In the case of marriage, for instance, only divorce stops your spouse from having a claim to your estate. So people who are separated but not divorced are often surprised to find their ex could inherit unless they change their will, says Peart.
Current de facto partners have rights, but former partners have no claim. However, if an ex de facto partner is named in the will, they still stand to inherit. That is because, unlike marriage, there was no divorce to trigger their exclusion and the claim is treated like a gift, says Peart.
“You may well find that the person from whom you've been separated for 20 years suddenly inherits your estate.”
And just in case you think this never happens, Peart does tell one cautionary tale where the husband was jailed for abusing his wife.
“They didn't get together again after he came out of prison, he left, she never made a will and when she died 15-20 years later, out of the woodwork he came. She had no children, she had nobody else, he took the lot.”
The only thing messier sometimes than carrying out a will is the absence of one. When that happens, the courts step in and ask a family member or a lawyer to be the “executor”, the person who administers the will.
Where there is no will, the court follows a strict formula, distributing to partners, children and/or parents. If no relatives exist, the Crown gets it all..
Even when the deceased has a partner, the formula decrees that parents receive a share of the estate. That is often a shock to the partners, says Peart, and a good incentive to state your own wishes.
Costs People who fear the cost of making a will sometimes do not realise that it can be virtually free.
Some lawyers will do it for you if you already have business with them or if they get to administer the will. Corporate trustees such as the Public Trust will also do it for a low fee.
If your affairs are complicated, getting legal advice is strongly advised. But make sure that you ask what the lawyer's fees are likely to be. Questions you should ask are whether the fees will be a set fee or a percentage of the estate and whether the firm expects to be appointed the executor.
For a long time, the Public Trust was considered a low-cost option for will-making. Matt Sale, its retail general manager, says there are some unhelpful myths out there including that the trust demands to be made the executor and charges commission.
The truth is that it uses set fees, charging for extra time by the hour, and allows people to appoint their own executor.
“Having said that, we often encounter beneficiaries who decide they are not well enough equipped to deal with the legalities and in a lot of instances, request us to undertake the administration of the estate, acting alongside the executor.”
Each will needs an executor and one or two trustees, who keep an eye on the estate.
Choosing a good executor is important to a smooth process, and many people try to reduce costs by asking a family member.
But it's a big job and executors can quit if it all gets too much, so having an independent trustee involved can be a good idea.
Another option for the thrifty is a do-it-yourself will, but lawyers invariably warn against them.
Kelly, who spends much time untangling DIY wills, says basic mistakes include not having the will signed and witnessed properly. Even a simple mistake like removing staples from a will to photocopy it can be a trap.
“The court writes back and says, 'confirm that no other document concerning this will is attached because we can see the holes there.
How do we know that there wasn't another document that changed the will?'
“So you've got to go round and find whoever had the will and get affidavits and file it, and by the time you've fiddled around with doing all that, the fees are mounting up.”
It is amazing what becomes valuable to family members when a person is gone.
Family photos are just as liable to start a feud as jewellery and art.
So to avoid those battles, it's a good idea to document who gets some of your most loved treasures in your will.
And then there is the most precious of assets – young children. Although wills are about assets, it is worth thinking about guardianship.
Nominating a guardian is particularly useful in the case of parents who have split.
Surviving partners always have some form of custody but you can still have a presence in your children's lives by appointing a friend or family member as their fellow guardian.
You will probably also want to think about money for their care. Unless you specify otherwise, the children will not be able to access any inheritance until they are 20. If your partner or ex ends up looking after them, they may need access to the funds to help with the children's care, something the courts may do anyway.
Written by Catherine Harris. First appeared on Stuff.co.nz.
Article created in partnership with Over60