Tuesday, May 19th, 2020
Since over 65s have been allowed to open KiwiSaver accounts, more retirees have invested in KiwiSaver.
What is the problem with this? KiwiSaver has to be held in the name of an individual and this can cause estate planning problems. If one partner dies, there could be a considerable delay in getting access to investments held in their name. This also applies to any other investment held in the name of one partner.
When someone dies it can take several weeks to go through the High Court to get probate if there is a Will or several months to apply for letters of administration if there is no Will. Then the executor of the Will has to allow 6-12 months for any claims to be made against the estate before distributing the assets.
Couples who don’t have Wills often assume that everything will be left to their partner if they die. This would only be the case if the deceased has no children or living parents. If they have children their estate would be split between the partner and children. If there are no children their estate would be split between their parents and partner. For more information on the split prescribed by law click here.
Take care of your family by making a will so your wishes are carried out placing the least burden on your family.
When structuring your investments, think about whether your partner will have access to sufficient money to pay for your funeral and living costs until the estate is distributed. Ideally investments should be in joint names as they will remain accessible to the surviving person. The attraction of KiwiSaver is the low fees, so splitting a couple’s combined KiwiSaver balance in two and investing in individual names might be a good compromise.
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