A guide to leaving items to beneficiaries in your will

No matter what you own in life, it’s important to plan for what will happen to your assets when you die. Giving it some thought now will protect your loved ones from any confusion or conflict later on.

Bequests: What are you leaving?

As well as stating what your wishes are for your funeral, your will details how you would like your property and other assets handled.

If there are specific items you want to leave to particular people, you can include them as gifts in your will. These items may have monetary or sentimental value. Leaving specific items to someone is called a ‘bequest’.

Fortunately, you don’t need to make an exhaustive – and exhausting – list of everything you own. Usually, assets in wills are referred to in general terms. This saves you from having to update your will every time you get something new or get rid of something.

Types of bequest include:

Life interest: Granting ‘life interest’ to someone enables them to use a property for the rest of their life, without becoming the owner. This is usually used to provide for people who are dependent on the will-maker, such as an elderly relative.
Gifts: This can include leaving money to particular people, charities or organisations. Or leaving specific gifts of personal items such as family heirlooms, paintings or furniture. There is usually a clause in your will stating what should happen to the rest of the estate, often called the ‘residue’, after funeral costs, taxes and other liabilities are paid.
Testamentary trusts: Sometimes trusts are created by a will. These are called 'testamentary trusts' and are often used when part of the estate must be held in trust for children until they are old enough to access it.

Once you’ve made a list of your assets, the next step is deciding who you’d like to leave them to.

Beneficiaries: Who benefits?

Under New Zealand law, you are not obliged to leave a specific amount of your estate to anyone. You have the freedom to dispose of your assets as you wish.

That said, claims may be made by spouses or partners, relatives you have a moral duty to, or people who believe you made a promise to in exchange for specific services. If you think there may be cause for dispute over your assets, get advice from your lawyer.

Your beneficiaries have a right to be kept informed while your estate is being distributed, and it’s part of your executor’s job to keep everyone in the loop.

The role of your executor

An executor is responsible for managing the distribution of your belongings after you die. Anyone can be an executor as long as they’re over 18 at the time of your death and of sound mind. Most people choose a family member or friend, or a professional executor such as a lawyer or trustee corporation, which provides wills and estates services.

After you die, the executor applies to the court for probate. Probate is when the court validates the appointment of your executor, giving them the green light to deal with your assets. Once probate is granted, the executor becomes a trustee and holds the assets in trust for your beneficiaries.

If you have a large or complicated estate, you could consider appointing a professional executor. After all, it may be a time-consuming and stressful burden for a family member or friend to take on. When you’ve decided on your executor, talk to them about it well ahead of time so they are aware of their responsibilities.

Set and forget

Your will – including your bequests – should be kept with your funeral insurance policy. Make sure your executor knows where both important documents are. Then you can relax knowing you’ve done your best by the people you care for most.

13 Aug 2019