A better question, do you want your things to go to those you care about and have your family looked after?

• Yes? A will and good estate planning will help ensure this happens.

If you have good estate planning, it often means I can do better insurance planning for you. This often means you insure less and pay a lower premium.

As your insurance adviser, if I have to account for estate management costs (read legal costs defending the estate), relationship property issues, poorly structured assets, and debt, I will recommend significantly higher levels of coverage, which will cost you significantly more in the long term.

• Take a typical $1,000,000 property in Auckland; mix in a blended family situation, with current & previous children and habitation for the current partner, and without too much thought, we have a $500,000 problem.

Let's look at a case study

Let us assume that this couple will approach it 50/50, 50% his and 50% hers, as they both contributed assets to start with and income to pay for it along the way.

Of the half of the property for the person who passed away;

• How much goes to the partner, and how much to his or her own children?
• When is the property sold to realise this value?
• Where does the remaining partner now live?
• What about the debt, if any?
• All significant questions that need an answer.

Let us crank up the volume a bit.

If the estate planning has been done with the surviving partner, but the deceased partner had not, which happens, then this conversation is potentially more challenging.

• While the surviving partner already has 50% of the property under their current estate planning, they may still have a claim under relationship property to a significant portion of the deceased's half.
• Which means the deceased’s children will get less.

This article discusses some of the recent challenges the very wealthy have had with their estates when things have not worked quite so well.

• While this may not apply to everyone at this level, it highlights what can happen when emotions, feelings, and principles get involved.

How do you solve this in a cost-effective way?

Strange as it might seem, talk to a lawyer.

• The perceptions of lawyers charging like wounded bulls are well founded, but times are changing.
• A good lawyer who is prepared to do the right thing by you will often not charge for the initial consultation.

They will charge for their work, but the initial consultation will give you a better idea of what is required, what can be achieved, what it's likely to cost, and most importantly, what you need to discuss and decide on before the clock starts ticking with the lawyer.

By taking an approach to understanding your situation and guiding you on what your homework will be, you can minimise your costs in getting this right.

• Funny enough, your lawyer does want to get this right in a cost-effective way.

What do you need to consider?

• What you own and whom it will go to when you die
• Are your assets to be sold, and your family get cash, or do you remove debt and pass on the asset?
• Are assets to be retained to produce income or to provide a lump sum to your beneficiaries?
• Do you have current or previous partners to consider?
• Alternatively, is there a distant niece or nephew who needs to be included?
• Do you have a business? What value does it have? Will this be sold or succeeded?
• Will your business pass to a specific family member?
• What about the shared value of the business to the rest?

Quickly, those are just a few, but they can be significant.

You have a business

Your business—maybe you value it as your business but do not think it has value for sale.

• That may be your perspective.
• My answer is all businesses have value, and the above is often the response from small business owners.

You have spent years building it—yes, it may just be you.

• If you're still in business, you have loyal customers and good products.
• If you did not, you probably would not have survived.
• This means there is value, value to someone who would love to run a business just like yours.

Ok, final reality check with estate planning

As a minimum, it is going to take 8 months for your estate to be distributed. 2 months for probate if you are worth more than $15,000, and another 6 months before the executor will distribute your estate.

• Can your family survive for 8 months if all of your assets are frozen?

What about the business? As sole director of your business, you face a similar challenge.

• Without a director, your business can't trade.
• Having a director appointed by the court takes time and money.
• Will this happen soon enough for the business to survive?

Where your insurance comes in

This is where your insurance planning comes into the picture.

• If you have good estate and insurance planning tied together, we can ensure the people needing money at this time do.

If your insurance pays into your estate, it will be tied up for 8 months—not an ideal answer for your family or business.

If any of this concerns you, give us a call for consultation.

It is free, and you will get clarity and understanding about what is going to happen to your family.

• In addition, if you need it, we will introduce you to trusted professionals in their respective fields, so you know you will be well taken care of.

Go on, this is your Round-Tuit!