Charlotte Lockhart - Using estate planning to take care of your children and grandchildren

When most people think about estate planning, it's not uncommon for them to dismiss it as 'something that only rich or famous people do' – everybody has an estate, a legacy to pass on to their children and grandchildren, and we owe it to them and ourselves to do it properly.

Estate planning is more than a Will. It is all about understanding what assets you have, no matter how small; in other words everything you own whether it's a house, a car, KiwiSaver, savings account, funeral policy, furniture or small personal items like mementoes or jewellery. By putting in place various legal structures – such as a Will or a Trust – you're able to ensure that your family is not disadvantaged by Government, compliance and tax issues.

If you want to your wishes to be carried out, if you want your promises to be honoured and if you want your family – your children and grandchildren – to be treated fairly, talk to an expert about what planning you need to do around your estate. No matter how humble you may believe your assets are, you will be surprised to find what can go wrong when you're no longer around to oversee things.

The three pillars of a good estate plan are:

A valid Will

While only around 50% of Kiwis have an up-to-date Will, a Will is critical for providing fairly for your family, ensuring your children have guardians and putting in place arrangements for the sale and distribution of your assets.

A family Trust

Almost one in five New Zealanders (18%) have a Trust, but many are unaware of legal changes that could potentially leave them exposed. A Trust is there to protect the ownership of your assets and to ensure that your family receives the full benefits of your hard work.

An Enduring Power of Attorney (EPA)

The Future of New Zealand’s Estate Planning, an independent research report commissioned by Perpetual Guardian, found that one-third of adult New Zealanders (35%) do not know what an EPA is, and almost two-thirds (64%) do not have one. An EPA is a legal document that appoints somebody else, whom you trust, to act on your behalf in legal and financial matters when you cannot.

Wills, Trusts and EPAs should not be looked at in isolation, but as part of an overall plan for you and your family. With New Zealand’s ageing population and growing level of wealth, these issues around estate planning will only become more important over time.