Is my Will in order? What will happen when I die? Part 2

Further to our previous blogs on “Is my Will in order? What will happen when I die?” and “Where there’s a Will, there’s a relative-deceased estates” a recent case has highlighted the need to take extra caution when drafting and finalising your will yet again.

Recent case

In the case of Sutton v Public Trust [2015] NZHC 1844 (6 August 2015), a testator left his estate equally to three of his children (in the event that his wife passed away before him which she did). The problem was that one of his children had always struggled with the threat of bankruptcy and he was finally made bankrupt in July 2010, before the testator passed away.

willtestThe Will stated that if the gift did not “take effect” then the share would go to his/her children. The bankrupt son’s children (the testator’s grandchildren) claimed that the gift did not “take effect” and should be given to them instead of the Official Assignee who would use the funds to pay off the son’s debt.

The Public Trust were unable to provide file notes or documents to assist the court in determining the testator’s intentions at the time the Will was signed in 2003. The High Court of New Zealand found that there was no ambiguity in the Will, that the testator intended the estate to be given to his children if they were alive (and the bankrupt son was alive) and the one third share was awarded to the official assigner on behalf of the bankrupt son to repay his debts.

Undoubtedly, this would not have been what the testator intended and could have easily been avoided at the time the Will was drafted or even at the time the son was made bankrupt.

You should ensure you discuss any relevant matters with your Will drafter and the Will drafter should also be careful to take full instructions and keep adequate file notes of the client’s intentions at the time the Will is finalised.

Common mistakes

There are some common mistakes made on the following scenarios and we recommend you take special care:

1. What will happen if one of your two children dies before you? Does your surviving child get the full share or does the deceased child’s children and/or partner get the half share? This could potentially make a big difference.

2. What will happen if your spouse/partner dies before you and your children are minors? Do you want the children to get their full share before they turn 18 or do you want someone to hold this on trust? Who will then be your children’s guardians and/or trustees?

3. Do you wish for your burial/funeral service to follow a certain religion? While this cannot be legally binding, it would be a good idea to specify this if you have a specific intention. It is now becoming “fashionable” overseas for people to pre-plan and pre-pay for their own funeral customising their own photos, services, coffins etc.

4. Do you have any special wishes for your trustee/executor/family to continue on a certain business or hold onto a certain property to give effect to a special wish?

5. Your overseas properties (immoveable assets) are not affected by a Will in New Zealand and if you own overseas properties, you may need to leave a separate Will in that country.

6. Change in legal positions automatically revoking a Will (marriage/dissolution).

7. Will your trustee/executor/family know your online passwords to deactivate certain accounts? Due to the complications of your cyber space life, it is often helpful to have a sealed envelope with a list of your passwords so that this can be managed.

To download this article as a PDF click here.

To download a PDF copy of our Will Instruction Form click here.

If you have any further questions or require any further assistance in regards to Wills, please contact us here.