Penny Jones
By Penny Jones

Many people assume that a will automatically covers all assets they own at their death. However, this is not necessarily so. There are some important exceptions, and it is essential that you understand them when you undertake an estate planning review with your lawyer.

What Assets Does A Will Cover?

The general starting point is that a will covers all assets in your name at your death. It will automatically cover assets in most overseas countries as well as those in New Zealand, unless your will specifically states that it only applies to assets in New Zealand.

Do You Have Assets Overseas?

If you have assets overseas, let your lawyer know as it is usually best to have a separate will for each country in which you have assets.

What Assets Are Not Covered By A Will?

Jointly Owned Property

If you jointly own property with another person, your interest in that property automatically passes to that person on your death. Your interest in the property cannot be given to another person in your will. It is important that you clearly know how you own your property. Your lawyer should also always check property titles when preparing your will to ensure your recollection of how you own your property is correct. You would be surprised how often it is not correct and this can have a big impact on the ability of your will to carry out your wishes on your death. For example, you may assume you own a half share of a property with a sibling and want in your will to gift it to your child. If you in fact own the property jointly with your sibling then your share passes automatically to your sibling regardless of what your will says. Your child will not receive your share of the property.

If you have named a person to be the beneficiary (owner) of your life policy on your death then the life policy proceeds will be automatically given to that person on your death, regardless of what your will says. If you have not named a person then you are the owner of your life policy and the proceeds on your death will belong to your estate and will be treated according to your will. Your lawyer should always ask you to carefully check with your insurance company who owns your life policy to avoid a gift of life policy proceeds in your will failing as the policy records someone else as the owner.

It is common to own assets such as your home in a family trust. Your will has no effect on assets owned by your family trust. It is important to be clear on what assets are owned by your family trust and what assets are owned by you personally. Your will deals only with your personally owned assets, and you should have a separate document called a Memorandum of Guidance (sometimes called a Memorandum of Wishes) to set out your wishes for how a trust should deal with its assets on your death.

It is common to own assets such as investment properties in a company rather than in your personal name. These companies are often simply structured with you being the director and shareholder. Your will cannot directly deal with or gift assets owned by your company. Your will can however gift the shares in the company to a person so that person effectively owns the company. This will usually enable that person to appoint themselves a director of the company, giving them control of the company and the ability to deal with the company’s assets as they see fit.

What’s Next

Every estate planning exercise with your lawyer should start with a careful review of all your assets, one at a time, to establish exactly how they are owned. Only then will your lawyer be able to prepare a will for you that ensures that your exact wishes are carried out on your death. Your will is one of the most important documents you will enter during your life. It should not be rushed or neglected. It deserves proper time and effort with an experienced lawyer to get it right!

Contact our wills specialists for thorough advice, wills preparation and will updates. We’ll listen and understand your personal situation, and help you prepare for the future.