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By Paul de Klerk
Investment Specialist
In New Zealand, one of the most important steps you can take in planning for the future is making a legal Will. This is especially critical if you are a KiwiSaver member.
Here's what you need to know: Protecting Your Loved Ones A will is a legal document that outlines how you want your assets to be distributed after your death. Without a will, New Zealand's intestacy laws will determine how your estate is divided. This may not align with your wishes, potentially causing confusion and distress for your loved ones during an already difficult time. For KiwiSaver members, a will ensures that any savings or funds in your KiwiSaver account are directed to the people or causes you intend. KiwiSaver can form a significant portion of a person’s retirement savings or family wealth, and without a clear directive, it may not be distributed in accordance with your desires. KiwiSaver Account Ownership and Beneficiaries One key reason KiwiSaver members need a legal Will is the specific rules around how the funds in a KiwiSaver account are distributed after death. Even if you are married or have a de-facto partner, your KiwiSaver may not automatically pass to your partner because KiwiSaver cannot be jointly owned, like a banking account or a family home can be. Upon your death, your KiwiSaver provider will follow the instructions in your Will about where the monies should go. However, if you don’t have a Will, or if your Will is unclear, this can lead to complications. In such cases, the funds might not go to the person you would have preferred, and it may take longer to resolve. By clearly specifying your desired beneficiary(ies) in your Will, you avoid potential delays, disputes, and confusion about who should receive your KiwiSaver balance. Furthermore, a valid will can help ensure that your nominated beneficiaries are able to access the funds as quickly as possible, which can be particularly important if your KiwiSaver account represents a substantial portion of your wealth. Provide for Children and Dependent Family Members If you have children or other dependent family members, a Will provides an important opportunity to make provisions for their future. This is especially crucial if your KiwiSaver balance is substantial and could be used to provide ongoing support to those who rely on you financially. Without a Will, your family may face challenges in receiving your KiwiSaver funds or any other assets. For example, if you pass away intestate (without a Will), the division of your estate is dictated by New Zealand's intestacy laws, which may not take into account the specific needs of your children or dependents. A clear, legally valid Will allows you to designate your KiwiSaver balance (and other assets) to help provide for those you care about. Avoiding Delays and Legal Complications In the event of your death, the administration of your estate (what happens to your belongings, property, and savings) requires a legal process called "probate." If you die without a valid Will, the process of distributing your estate can take longer (much longer!) and may involve complications, disputes, and additional legal costs. This process is often more complicated for families when assets like KiwiSaver are involved. A clear, legally recognized will can help simplify the probate process. Your Will will serve as a guide for the executor (the person you designate to manage your estate), making their job easier and faster. When it comes to your KiwiSaver account, this is crucial, as your account balance may be substantial and could be tied up in the probate process for an extended period. Updating Your Will as Your Circumstances Change Life is always evolving. Whether it’s through changes in family circumstances (such as the birth of children or grandchildren), changes in your relationship status (marriage, divorce, etc.), or changes in financial status (like accumulating more savings in your KiwiSaver account), your Will needs to be updated regularly to reflect these changes. A key element to consider is the fact that KiwiSaver balances can grow significantly over time, meaning your Will may need to be amended to ensure that any new beneficiaries (or changes to existing ones) are properly accounted for. If you haven’t updated your will to reflect changes in your life, your KiwiSaver funds could end up being distributed in ways that don’t reflect your current wishes. The Peace of Mind That Comes with Having a Plan Finally, one of the most important reasons to have a Will—especially if you're a KiwiSaver member—is the peace of mind it brings. Having a legally binding document that clearly outlines how you want your assets, including your KiwiSaver savings, to be handled after your death can alleviate much of the stress and uncertainty for your family. It gives you control over your financial legacy and ensures that those you leave behind are taken care of in the way you intended. Conclusion: Don’t Leave Your KiwiSaver Balance to Chance KiwiSaver is an important asset for most New Zealanders, and it deserves the same careful consideration as any other asset when it comes to estate planning. Having a legal Will that specifically addresses your KiwiSaver account and the distribution of your funds can help ensure that your wishes are carried out and your loved ones are provided for. Whether you're just starting out in your KiwiSaver journey or have a growing account balance, taking the time to create or update your Will is an essential step in securing your financial legacy. By making sure your Will is up to date, clear, and legally valid, you give yourself—and those you care about—the best chance of avoiding unnecessary complications after you're gone. Don’t leave it to chance. Protect your future and your family's future by creating a legal Will today. 
PAUL DE KLERK
Paul de Klerk (FSP110367) is a Kiwisaver and investment specialist working for the Financial Advice Provider known as De Klerk Business Services Ltd (FSP1105978). Nothing in this article should be considered as personal financial advice. If you need personalised investment advice, speak to Paul for free at www.pauldeklerk.co.nz/contact. For a disclosure statement visit www.pauldeklerk.co.nz/disclosure Comments are closed.
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