Gifting your inheritance: don’t leave it unsaid
If there’s one thing certain to polarise Kiwi families, it’s inheritance. You’d think it would be a simple thing: you write a will, split up your wealth between your loved ones, and that’s the end of it. But it’s not quite that simple – so it’s essential to discuss early.
And if you’re moving towards retirement age, talking about your estate is one of many awkward conversations you may have with your loved ones. It’s part of getting your affairs in order, which could also include researching any insurance you may need or sharing your end of life wishes.
And although it’s not quite the dinner table conversation a typical family wants to have, getting inheritance out in the open and being transparent about your plans may actually be the key to stronger, happier family relationships.
Retirement and inheritance: what we know
The number of people aged 65 and over is on the rise, and it’s only set to increase according to research. By 2036 it’s projected that about 1 in 4.5 New Zealanders will be 65 or older.
That means there’ll be a lot of retirees or people considering retirement in the coming years, and planning out their inheritance. This can be a challenging task, given that there can be some legal uncertainty surrounding inheritances. The Family Protection Act places a ‘moral duty’ on certain people to provide for close relatives – such as their spouse and children – so your will can be contested. And if your will is deemed not to fulfil the responsibilities of the deceased, under the Family Protection Act and the Property (Relationships) Act, the New Zealand courts are able to override it.
Why these conversations are important for families
If talking about death or what you’d like to leave to your wife, children and extended relatives doesn’t come easy to you, you’re certainly not alone. Many of us resist discussing these topics because it can be hard, awkward and upsetting. But avoiding the conversation can only cause more anxiety to everyone and may lead to fractured family relationships.
The good news is, the more you bring it up, the easier it is to start talking about it openly. Doing so early will also give you peace of mind knowing your loved ones know your wishes, are aware of your plans for your estate, and know that funeral expenses and costs may be taken care of.
How to have the conversation with your family
- Start on a practical note: It might be easier for your loved ones to discuss things like your end of life wishes, how you’d like to split up your estate or be cared for if you get ill.
- Use other means to talk: Writing loved ones a letter or recording a video can be great ways of getting your message out without being derailed or interrupted, and it also gives family members space to think about how to respond.
- Realise it’s an ongoing conversation: As these topics can be hard to talk about, you may face resistance from some family members. If someone’s struggling, don’t push – just come back to the conversation another time. You may even find that your plans change over the years, so starting the conversation early will help you keep the line of communication open with loved ones.
Retirement age is a great time to start putting your affairs in order – and making sure your loved ones are aware of your wishes. While your family may not want to think about you dying, letting them know what your plans are for everything from their inheritance to your funeral is actually a loving gesture that will only serve to make things easier on your family when you’re gone.
And if your whole family are aware of what you’d like to happen – particularly around how you want to gift your inheritance – it gives them time to ask you questions and get their head around it. If you worry about the possibility of family members contesting the will later, being upfront and open from the start may help your family accept your wishes.
19 Nov 2020