Blended families may face legal, financial minefield without a will as legal fees eat away at wealth

Blended families without a will may face a “legal and financial minefield” after a family member’s death, an expert warns.

Without a will, legal fees could often “eat away” at wealth during a time of grief.

The Public Trust Rotorua said only 53 per cent of people in the Bay of Plenty region had a written will. Nationally the figure is 48 per cent .

A blended family is a family consisting of a couple and the children they have had together and their children from previous relationships.

Rotorua Public Trust principal trustee Tracey Boyes said every family was unique but blended families could be complex.

Rotorua Public Trust principal trustee Tracey Boyes. Photo / Andrew Warner

Boyes said a will was not just about financial assets but also outlined a person’s wishes for their child’s guardianship.

“If a parent dies without a will and they have a blended family, it can be significantly more complicated,” she said.

Boyes said 65 per cent of parents and guardians with children aged under 5 did not have a will.

“If you die without a will, often the state [court] will decide what happens,” she said.

Boyes said the system was not always “very friendly toward the complexities of blended families”.

She said the courts might appoint a guardian, who might “not be your preferred option”.

Boyes believed the courts took into consideration family dynamics but ultimately made the final decision if no will was in place. A parent’s wishes for their child’s education might also be included in a will.

“For me personally, I wouldn’t want them making decisions about my children,” Boyes said .

She said she was part of a blended family herself and advised getting professional advice.

Boyes said wills could now be easily compiled online or by contacting the Public Trust.

Holland Beckett Law consultant Bill Holland. Photo / Alex Cairns

Holland Beckett Law consultant Bill Holland said guardianship could be a very difficult decision “as it changes all the time as the child grows older”.

Holland said there was no standard arrangement for the guardianship of a child after a parental death, as each situation was different and was done in the best interests of the child.

He recommended leaving out specificities of a guardian’s name, as circumstances might change or it could impose a responsibility on a guardian that may not be appropriate at the time of a death.

Holland said different legal options were available for blended family dynamics, such as a life-interest will.

A life-interest will means “the surviving spouse has the benefit of assets during their lifetime” said Holland.

After their death, assets would go to the will-maker’s wishes.

Holland said sorting legal arguments was stressful for grieving family members.

He believed changes in circumstances, such as a marriage or a death in the family, indicated it might be time to update a will.

“Try to keep it simple. Review it and just have a look at it,” he said.

Te Ara Ahunga Ora Retirement Commission personal finance lead Tom Hartmann.

Te Ara Ahunga Ora Retirement Commission personal finance lead Tom Hartmann said not having a will in place could put a family into a “legal and financial minefield” during a time they need to be “grieving and regrouping”.

Hartmann said a will was a simple way to avoid stressful situations for families at a time when they were coping with loss.

Often estates could be challenged, he said.

“It’s human nature, especially when there’s a fair bit of money at stake.”

Legal fees could often “eat away” at wealth and a “well-crafted will can keep many claims at bay”.

Michaela Pointon is an NZME reporter based in the Bay of Plenty and was formerly a feature writer.