Being a discretionary beneficiary of a trust – as many older New Zealanders are – can have a lot of upsides. It can also have downsides – especially if you’re applying for a Residential Care Subsidy (as many older New Zealanders are or are going to). The short version is this: if you are applying for a Residential Care Subsidy and you have any connection to a trust, then the Ministry of Social Development will want to know. And once they know, then they will want to know more. Most of us do not enjoy being asked probing questions concerning our finances, especially when the answers may have significant financial consequences. This can be stressful at best and positively frightening at worst. Ask for help. When assessing your application for a residential care subsidy, the Ministry of Social Development is required to make calculations that are accurate and precise. We can help you to make sure that it does. Qualifying for a residential care subsidy is not as easy as it used to be. But we have been able to help a number of clients see their application through to success. If you would like to discuss a residential care subsidy application give us a call (03) 477 8080

The legal landscape is littered with stories of fortunes lost and/or families torn apart – particularly where a farm or a family business is involved – as a direct result of inadequate succession planning. But even for those of us who live in more humble circumstances, good succession planning is really important. A classic example involves the family home. Typically, when Mum and Dad pass on, the house is sold and the money is split between the kids. Quite often, one of the children wants to purchase the house from the estate, but doesn’t have enough money to do so (even if they use their share of the residuary estate). Tensions can begin to rise between the children – tensions which can become especially acute if the child in question does not yet have a home of their own (an increasingly common situation). But there are potential solutions – especially if advice is sought while Mum and Dad are still alive. Succession planning isn’t about money – it’s about the family legacy that you leave behind.

The need for residential care for the elderly is growing. This care has to be paid for, and so many elderly New Zealanders (or more usually, their children) are applying to the Ministry of Social Development for residential care subsidies. Wading through the extensive application form and searching for the required records can be a very stressful experience. Then there’s the correspondence that follows: 1. Letters from the Ministry; 2. Requests for additional information and banking records and legal records; 3. More letters from the Ministry, none of which sound particularly encouraging. Your first instinct (and perhaps your second and third instincts…) will probably be to give up. Don’t give up. There is no denying that it is not getting any easier to qualify for a residential care subsidy. However, it is often worth questioning the initial response. And while no victory is ever guaranteed, we have been able to help a number of clients ask the right questions and see their application through to success. If you would like to discuss a residential care subsidy application give us a call (03) 477 8080

Most parents want to help their kids. Often this help involves money. As kids get older, the sums of money involved tend to get bigger. Significant assets may be co-owned or transferred. Businesses may be purchased or passed on. Maintaining good family relationships can challenging at the best of times – even within the context of an otherwise loving and functional family. Throw some money into the mix, or perhaps an unexpected death, and you potentially have an emotional cocktail. When things are – or feel like they are – going awry, sound advice, accurate information and clear communication are amongst your greatest allies. So, if you are thinking about: 1. Purchasing a property with or for one (or more) or your kids; 2. Letting one of your kids join in the family business; or 3. Lending/gifting them money… …then let us help you to formulate, plan and execute a smooth transaction. Furthermore, we can help you to document the transaction in such a way, that if things do start to go awry further down the track, you and your children will be able to communicate clearly with each other, because you will have accurate information to work with.

The more financially successful you are, the more there is to manage, even when you are no longer here to manage it. And while a nest egg – however vast – can be readily divided as per your wishes, succession planning with respect to a working business or farm is a different issue entirely. How do you pass the family business on to one of your children (and in a commercially viable form) while at the same time treating your remaining children fairly? The answer is with conversations, sound advice and thoughtful planning. Succession planning is ultimately about the nature and the quality of the family legacy that you leave behind. The best legacies do not arise fortuitously from the pages of a last-minute Will. The best legacies are built very deliberately, in some cases over many years. So the sooner you begin building, the better.

Successfully passing the family farm on to the next generation in a way that it remains commercially viable and remains in the family, is fraught with challenges. Even if the kids all get on really well, over time their own families will grow and/or change – as will the needs and ambitions of the individual family members. But what if it’s even more complicated than that? What if the eldest child wants the farm, while three siblings just want a/their share of its cash value? How do you treat them fairly without selling or crippling the farm? What if all of the kids want a piece of the farming action, but they don’t get on with each other or the farm isn’t big enough to simply split into separate operations? Every farming family faces its own unique set of circumstances and challenges. These kinds of dilemmas rarely have easy solutions, and even the mere act of thinking about them can be really stressful. But with honest conversation, thoughtful consideration and careful planning, a solution can usually be found.

YOUR WILL It is easy to put off one of the most important documents that you will make in your lifetime – your Will. You may already have a Will in place but when was the last time you reviewed it? Do you know where it is held? Does it still benefit the correct people in your life, or have your wishes or financial position simply changed over time? This may be the time to revisit your existing Will and think about any changes that may be required. You don't have a Will the law will determine how your estate is divided, and this could be very different to what you want to happen. Your Will stipulates what you want to happen to your property and possessions after you’re gone. Having a Will ensures that the people and things that matter most to you are taken care of later on. ENDURING POWER OF ATTORNEY Do you need Enduring Powers of Attorney? For most people the answer will be a simple “YES”. They are called “enduring” powers of attorney because they continue to have effect even after a person loses mental capacity. This is the very time when people need care. Enduring Powers of Attorney allows other people to make decisions on your behalf. It is always good to have your affairs in order and to have proper arrangements for the future. Enduring Powers of Attorney give you control over who will look after you and how your affairs could be managed. It’s all about peace of mind. MANAGING YOUR AFFAIRS Are your assets (your family home, bank accounts investments etc) jointly owned and in both your names? If your spouse or partner dies (before you do), any assets that were not jointly owned by yourself and your spouse/partner – i.e. your name was not on the applicable ownership documents – will immediately form part of the deceased’s estate. Paying Bills Is your name on your utility accounts? Do you know how to pay for your utility bills? And do you have authority to speak to your utility providers? RESIDENTIAL CARE SUBSIDY To qualify for the Residential Care Subsidy the value of your assets must be equal to or below the application threshold. If you meet the asset threshold, the Ministry of Social Development will also complete an income assessment. When assessing your application, the Ministry is required to make calculations that are accurate and precise. We can help you to make sure that it does. If you need advice, give us a call 03 477 8080.

If you are the co-owner of a property as joint tenants and you die, the property will pass to the surviving co-owner(s) by survivorship – that is, automatically as a matter of law. On the other hand, if you are the co-owner of a property as tenants in common and you die, your share of the property will form part of your estate and be dealt with in accordance with the terms of your Will (or if you don’t have a Will, the Administration Act 1969). Obviously, it is really important for you to a) know how you own your property, and b) understand the legal and practical consequences that will be triggered by your death and/or the death(s) of your co-owner(s). We regularly talk with people who don’t know how they own their property (or if they own it at all…), and who are worried about what the future might hold – especially if their partner dies before they do. There may not be a (simple) solution to the problems/challenges that you think you might be facing. But at the very least, we can a) ensure that you fully understand them, and b) help you take steps to mitigate or minimise them. If you have questions around joint tenants and tenants in common, please call us 03 4778080.

You can own property (or a share in a property) with other people in one of two ways: as joint tenants or as tenants in common. Being joint tenants is a bit like having a joint bank account – i.e. you both/all own the whole property together. If one or more of the owners dies, their interest in the property does not form part of their estate. Instead, the surviving owner(s) simply continues to own the whole property. Being tenants in common is different, and the difference is very important. If you own a property with one or more other people as tenants in common, then you each own an identifiable share of the property. If you take a look at the applicable Record of Title, you will see that it says: John Smith as to a ½ share. Sarah Black as to a ½ share. Or if there are three owners: John Smith as to a 1/3 share. Sarah Black as to a 1/3 share. Paul Doe as to a 1/3 share. Because the respective shares of the owners are identifiable, if one of the owners dies, then their share forms part of their estate. If you have questions around joint tenants and tenants in common, please call us.

Deceased estates are not without their challenges. Perhaps one of the more common challenges arises where one (or more) of the beneficiaries of the estate wants to purchase an estate asset – e.g. the family home or perhaps a vehicle. The executors of an estate have a legal obligation to protect the interests of the residuary beneficiaries. That means all of the residuary beneficiaries – not just the ones they like. In practical terms, this means that the executors are obligated to realise the maximum value of the estate – i.e. sell the estate’s assets for something approximating market value. Consequently, an executor who decides to cut one (or more) of the beneficiaries a sweetheart deal on the family home without the approval of the other beneficiaries, is playing with fire. Aside from potentially laying a foundation for family conflict, they are putting themselves in harm’s way from a legal point of view. There are many different roles within this scenario: the executor of the estate, the beneficiary wishing to buy an estate asset, or another residuary beneficiary. Whichever applies to you, and you require advice, give is a call 03 477 8080.

We recommend when you are considering updating you will, that if you have a child or children, you consider who you would like to be involved in the decision making for you children. You do this in your will by appointing a guardian to take over some responsibilities for your children, if you die. Guardians appointed under a will are called testamentary guardians. It is important that you know that just because you appoint a testamentary guardian does not necessarily mean they will provide the day-to-day care for a child(ren), but they are responsible for making the key decisions concerning the upbringing of the child and it helps everyone to know who needs to be involved in the big decisions. While you are not required to appoint a testamentary guardian for your children, we do recommend that it is a good idea to include one in your will. Both parents of a child may appoint a person or persons in their will to be the guardian of the child following their death. This is especially important should both parents die together or one parent dies, especially if that parent is separated or divorced. The court will always focus on the best interests of the child. As parents, we encourage you to focus on who will be able to assist the court know your child’s best interests. If you need advice, give us a call 03 477 8080.

It can be tempting to approach your relationship with your lawyer in much the same way as you approach your relationship with St John – you only call them when things start going awry. And this is understandable: most of us don’t want to get a bill from our lawyer any more than we want to take a ride in an ambulance. Of course, some problems hit us like a well-laid ambush – unforeseen and entirely not of our making. But there are plenty of snags and landmines that we can lay for ourselves – despite our best intentions. What is more, not every problem has a readily available solution; not every injustice has an immediately apparent remedy. At Lucas and Lucas we will always do our best to help you solve (or at least mitigate) the challenges that confront you from time to time. But where we have the best opportunity to add the most value to your life and your affairs, is working with you at the beginning. Helping you to develop the plans that will lay the groundwork for the future that you are trying to build. Let us help you prepare for the worst, so that you can genuinely hope for the best. If you need advice, give us a call 03 477 8080.