Push to combine nest-egg and will
Queen of Soul Aretha Franklin died without a will.
Wealthy enough to have lawyers on tap, Franklin left her loved ones to fight over her extensive assets.
Four in 10 Kiwis, if they died unexpectedly tomorrow, would leave their heirs in exactly the same position, research from Perpetual Guardian shows.
But there’s a simple fix, said Andrew Barnes, founder of Perpetual Guardian: Make KiwiSaver providers offer wills as well as investments.
‘‘We have a fundamental flaw in KiwiSaver,’’ said Barnes. ‘‘We still do not have a binding letter of wishes as an integral part of the establishment of a KiwiSaver account.’’
A letter of wishes is a legally binding instruction setting out who inherits a deceased’s savings.
That mechanism was built into Australian super scheme sign-up rules, Barnes said.
But he favours something more ambitious here, which could reduce the stubbornly high number of people without a will – some 44 per cent of adults.
‘‘The solution has to be that when you set up a KiwiSaver account, you have a will as part of the set-up process. You can then tweak it, change it, twist it as you go forward.
‘‘It wouldn’t seem to me to be particularly onerous on the Government to say, ‘Why don’t we work with these institutions, and see whether, within the charging structure put in place for KiwiSaver, ensure that everyone gets a will with it’?’’
He envisions an opt-out for people who have a will.
The only way KiwiSaver providers could realise Barnes’ suggestion would be contracts with legal tech companies to provide online-will writing services driven by artificial intelligence.
That, however, would also need a change in the law to allow digital signatures, which can be used in many areas of personal commerce.
‘‘Not hard,’’ Barnes said. Procrastination was the number one reason people had not written wills, Perpetual Guardian’s research found, despite an almost universal belief that having a will was important.
‘‘People think it is harder to make a will than it really is, and that one has to be made with an expensive lawyer,’’ Barnes said.
The document can be largely drawn up online these days through services such as Perpetual Guardian’s e-wills.
There’s some ignorance as well. Many people who don’t have a will also believe their assets will automatically go to their children, without the need for court hearings to get probate granted.
Some people also seemed immune to will-writing ‘‘trigger events’’ such as buying a house, having children, and even divorcing.
Perceptive found 44 per cent of those without wills owned a house, 57 per cent had children, and 30 per cent had children from previous relationships.
A further 28 per cent had even been in more than one relationship in which assets were split on break-up.
And it wasn’t as if all those without wills were penniless, with 19 per cent having assets worth more than $500,000.