New Zealand Guardian Trust

Estate planning

Wills

		If I prepare a new Will, do I need to advise the people who prepared and hold my previous Will?
		Whilst your last dated Will will be the Will in terms of which your estate is administered and distributed, it is advisable to notify the holder of your previous Will that you have prepared a new Will. This will avoid any confusion about where your last Will is held at what will be an emotional time for your family.

		When should I review my Will?
		It is important to update your Will whenever there are major changes in your circumstances. These might include: Having children or grandchildren The death of a loved one Marriage, remarriage, separation, divorce, starting a de facto relationship Acquisition or disposal of any major assets Establishing a family trust Any other changes that might affect your wishes. Regardless of major changes in your life, we recommend you review you Will every three years. As a client of Guardian Trust, we will automatically include you in our Wills review programme which involves prompting you at regular intervals to review your Will and make any alterations to meet your wishes and any changes in your circumstances.

		Can I appoint anyone as my Executor and trustee?
		You can appoint anyone to be your Executor and trustee as long as they meet the following requirements: The appointed person must be an adult – you cannot appoint a child They must be of sound mind The person should be of sound financial standing It is preferable for the appointed person to be resident in New Zealand in order for the courts to accept that they will be able to carry out their duties. When choosing your Executor and trustee, you should bear in mind that friends and family may not be able to act impartially towards your beneficiaries and they may not have the necessary expertise to administer an estate. A professional Executor such as Guardian Trust offers permanence - we won’t die, give up or go away. Guardian Trust is a statutory trustee company and this means peace of mind for you, the client, knowing we must perform to the highest standards expected of a professional adviser.

		What should I look for when choosing an Executor for my Will? Why is it so important?
		Choosing the right Executor is important because they will take full responsibility for protecting your assets and making sure they are properly managed, verifying and paying your liabilities, dealing with your family and beneficiaries sympathetically and impartially, overcoming legal difficulties and carrying our your wishes in terms of your Will. So it is important your Executor meets these requirements: Ability – Estate administration covers a range of specialist skills and the complexities are generally beyond the scope of the average person. Experience – Experience is more than knowing what needs to be done and when to do it. It's knowing the pitfalls, recognising potential problems and taking necessary steps to ensure the estate is administered efficiently without unnecessary cost and delay. Availability – An Executor must be available to take up the Executorship and be able to dedicate the time required to administer the estate diligently. Impartiality – An Executor must not take sides or be influenced to favour one beneficiary over another. This can become difficult if a dispute arises between the beneficiaries, especially if the Executor is a relative or friend.

		If I specify my funeral arrangements in my Will, will my Executor be responsible for making sure they are carried out?
		The sooner your Executor is advised of your death, the sooner he/she will be able to access your Will and advise your next-of-kin of your funeral requirements as specified in your Will. If you make specific requests in your Will regarding you funeral arrangements, it is advisable to also let those people who are likely to take responsibility for arranging you funeral, know of your wishes.

EPAs

Estate administration

		My brother has appointed me the Executor of his Will. How difficult will it be for me to wind up his estate?
		At Guardian Trust we are often approached in cases where a relative or friend is appointed Executor of an estate and isn't sure how to go about it. The degree of complexity of the estate administration process will largely be determined by the nature of the assets that make up the estate, the type and amount of debt that must be settled and of course, whether there will be any contentious claims or actions against the estate. Other factors which will determine how 'difficult' the estate will be for you to administer are the extent of your knowledge of estate administration and the time you have available to attend to the details of the process. Guardian Trust can act as an agent for you or as the Executor, in performing all the administrative duties and assist and advise you and the beneficiaries as required.

		Recently, a family member passed away and there were a few surprises when her will was read. Some family members want to contest the Will. Can you explain the legal process and the approximate cost of doing this?
		The process and cost of contesting a Will depends on the grounds on which the Will is being contested. There are two situations where a Will can be contested or challenged. The first is a claim that challenges a Will’s validity – for example, that it wasn’t correctly signed or witnessed or there is doubt over the mental capacity of the person making the Will at the time the Will was made. These claims are dealt with by the High Court. The second situation is a claim that challenges the contents of a Will. A number of laws provide for this such as the Family Protection Act, the Law Reform (Testamentary Promises) Act and the Property (Relationships) Act. The Family Court usually settles these claims although they may be referred to the High Court if the estate is of particularly high value or there are complex issues to be determined. If you decide to contest the Will in court, regardless of the claim, you will need to consult a lawyer. Depending on the lawyer's expertise, the hourly rate charged can vary between $200-$400 an hour. The complexity of the claim and the Will, will determine how many hours the lawyer will require. Court costs are normally deducted from the estate of the deceased however, if the judge deems the claim to be unrealistic, these costs might be passed on to those who are contesting the Will. Other costs to bear in mind are the emotional costs when dealing with sensitive issues, such as Wills, and the long-term impact it will have on the family involved. We recommend considering mediation between the various parties, to see if the issue can be resolved. Although lawyers will still need to be involved to ensure decisions made through mediation are made legally effective, it will usually be less costly than pursuing the claim in court. If mediation is not successful, there is also the option of Arbitration. This is quicker and cheaper than going to court but the parties will have less control over the final decision which is binding when made by an arbitrator.

		How long does it take for an estate to be finalised?
		The length of time it will take to administer an estate will depend on: How quickly the Executor/administrator has all the necessary information at their disposal The nature and complexity of the assets and the liabilities Whether there are any disputes. The law relating to estate administration prescribes certain processes and these must be adhered to. This question cannot be answered in general terms and it would be best to ask the Trust Manager who is dealing with the estate administration for a time estimate.

Asset protection

		Can I appoint friends or family as my trustees?
		Settlors have the freedom to choose their trustees. You can appoint trusted friends or family members as trustees and still have the benefits of professional trust administration through the Guardian Trust Monitoring and FlexiTrust Services. Guardian Trust can offer your trustees: Permanence - there when you need us Experience - after 120 years, we know the risks and how to manage them Expertise - a range of specialist resources including legal, accounting, tax and investing

		I don’t want to lose control of my assets.
		Whilst you may no longer own and control trust assets personally, a number of steps can be taken to reduce loss of control and maintain a degree of influence over the trust. As the settlor, you can hold the power to appoint additional trustees as well as remove trustees. You can also appoint yourself a trustee of the trust. In both roles, as settlor and trustee, you can maintain a level of influence over the trust property. As the settlor, you may also give the trustees a Letter of Wishes which sets out how you would like the trustees to exercise their discretionary powers, particularly with regard to beneficiaries and income and capital distributions. Your Letter of Wishes can be reviewed annually. Guardian Trust's Flexi and Monitoring Trust services, are specifically designed for settlors who wish to be trustees, but who also want the benefit of professional trust management support.

		I have been told that you need to have at least 3 trustees for a trust. Is this correct?
		There are no rules about how many trustees you need. Guardian Trust is the sole trustee of many trusts. You can have 1, 2, 3 trustees or more. The only rule is that if you start off with 2 or more trustees the trust must always have at least 2 (or one trustee corporation). Remember, trustees are normally required to act unanimously. This means all the trustees must be involved in all decisions and sign all documents. Failure to do so may put the trust at risk. Too many trustees, might slow down processes and potentially add to the cost of getting things done. So, more than 3 trustees is usually not practical, especially if they live some distance apart. On the other hand, too few trustees can also create problems. Being the sole trustee of your trust as well as the main person to benefit during your lifetime, might raise the question, "is this really a trust at all?". The risk is that you may still be regarded legally as the owner of the assets thus the trust would be deemed a sham. So the choices are: a) Have an independent person to act with you as co-trustee – but you must treat them as a real trustee and involve them in every decision; or b) appoint a trustee company such as Guardian Trust who will have an unbiased approach and ensure that the trust deed is followed; or c) act as trustee by yourself (in the case of a couple, you may be the only 2 trustees) but in that case a much higher standard of record and account keeping is required in order to demonstrate that this is really a trust and the assets are not treated as if they were your own property.

		I’m concerned that my family’s assets will be tied up by a document that won’t allow for changes when they’re needed.
		The modern discretionary trust is one of the safest and most flexible methods of ownership. At the discretion of the trustees, within the parameters of the Trust Deed, beneficiaries can be changed - new beneficiaries can be included and others excluded from the trust benefits. With a discretionary trust, there is also no fixed entitlement for beneficiaries. The value and frequency of the benefits can also be changed by the trustees. The discretionary trust also allows for: Resettlement Capital advances to beneficiaries Vesting dates to be brought forward

		Can I withdraw the funds set aside in my Funeral Trust?
		Funds set aside in a Funeral Trust cannot be withdrawn during your lifetime. The reason for this is that these funds are excluded from your total assets by Work and Income New Zealand when they assess your eligibility for a rest home subsidy. In order to protect the funds from this asset testing it is necessary that the funds cannot be withdrawn.

		Isn’t it better to do this through a funeral director?
		Whilst funeral directors offer this service, there is always a business risk that the funeral director may not be able to provide the funeral service when required to do so. With a Guardian Trust Funeral Trust you can rely on our continued existence and, as a statutory trust company, Guardian Trust will act with the highest level of integrity and professionalism.

		How is my money invested?
		The funds are invested in the Guardian Cash Fund, an award winning cash management account which gives investors access to a wide range of short-term money market investments.

		What happens if there is money left over in the Trust after paying my Funeral costs?
		Funds that are surplus after the payment of funeral costs are paid to your executor and will form part of your estate to be distributed to your beneficiaries.

Investing

Lifestyle management

		I have accepted a contract to work overseas for a year. I would like to rent out my house for the period that I will be away but I am concerned about managing all the financial and maintenance details from a distance. Would Lifestyle Management Services be able to provide me with some support?
		Guardian Trust takes care of the financial and maintenance management of properties all over New Zealand: Rental: If you own residential or commercial property, we can find tenants, negotiate leases and renewals, collect rents, carry out property inspections and look after regular maintenance of property including supervising quotes for major work Buying and Selling: If you decide to sell your property we can act as an intermediary on your behalf to obtain valuations and appraisals and generally undertake the sale process for you. We will discuss reserve prices with you and recommend the best option Maintenance: Guardian Trust can organise tradespeople to carry out maintenance work that needs to be done around the house, supervising and paying them when work is satisfactorily completed.

		My elderly mother will shortly be going into a rest home and has decided to sell her home and invest the proceeds. We are concerned that she won't be able to manage the investments and the family are reluctant to get involved as we feel this would intrude on her privacy and could also potentially lead to disputes within the family. How could your Lifestyle Management Services help?
		As experienced investment managers, Guardian Trust offers expertise and professionalism in managing your mother's investments. You can also be assured of our impartiality, which means we will only act in your mother's best interests. Our comprehensive investment management service includes: Investment advice and portfolio reviews Collecting interest and/or dividends on investments Arranging new investments Instructing share brokers Arranging regular payments for day-to-day living expenses Making payments to family members, churches, charities etc under instruction from the client.

		At what age should I set up Enduring Powers of Attorney?
		Incapacity can happen for a wide variety of reasons at any time and at any age, through illness or an accident. You could also be 'incapacitated' in the sense that you are unable to act on your own affairs if you went offshore for business, or decided to travel. In your absence, some urgent matter, such as signing sale documents for your property, may be required. There are numerous instances where Enduring Powers of Attorney have saved time and additional costs - many not restricted to older people.

		Can I appoint a family member or friend as my attorney?
		Only an individual can be appointed as your personal care and welfare attorney. A family member or friend that you trust would be suitable for this role. We strongly recommend that you appoint a professional trustee company, like Guardian Trust, as your property attorney. Friends or family may not have the expertise or time to manage your affairs properly and, they may not be available to help when you need them. It is likely they will have other demands on their time and your affairs could be neglected. If family or friends do not act impartially and in your best interests, you could be exposed to financial risk.

		What will happen if I don’t have Enduring Powers of Attorney?
		If you are unable to act on your affairs for any reason and you don’t have Enduring Powers of Attorney, no one can step in and manage your affairs without first applying to the Family Court. In the interim, until someone is appointed by the Family Court, your financial position could be severely affected and this may even result in personal financial loss. If for example you had a business and were the sole signatory, no one else would be empowered to sign on your behalf and this would probably have severe consequences for your business, your staff etc.

		What does the Guardian Trust Financial Planning Service offer?
		A variety of benefits including: Financial Management (including cash management services) Risk Management (Insurances) Retirement Planning Investment Planning (access to: managed funds, listed & unlisted securities) Ongoing portfolio management and review of strategies to meet client needs & goals

		How much does it cost?
		The proposed basis of our charges and full details of specific charges will be provided to you at the time of entering into an agreement and after we are fully aware of the nature & scope of our engagement. By way of example: We offer standard fees based on a published scale. We also offer a performance based fee structure on our 'recommended portfolios' for the ongoing management, monitoring and review of your portfolio. For performance based fees we charge 0.5% per annum. Above that, you pay only if you get a positive return. The higher the return, the higher the fee - so we get paid the most when we add the most value. A negative return means no extra fee. Talk to us to find out which fee structure will suit you best.

		How much money do I need before I can make an appointment?
		If you have investment assets of over $250,000 you should definitely consider a financial plan. If you have less than $250,000 you may still need some advice on investments and estate planning issues. Call us.