September is Wills Month.

As we have moved into a more digital age, consideration should be made as to what happens to your digital assets when you die. Increasingly, people are amassing both personal and business digital assets that have value – let’s not forget about James Howells who has spent a considerable fortune trying to dig through a Newport landfill site to find his private access key for his Bitcoin, which is now worth a whopping $800m. So, what are your digital assets, what happens to them when you die, and how can you make sure they are not lost? Your digital assets, which may have more value than others, include: Digital assets on computing devices; Financial accounts, including online gaming accounts, Bitcoin or other cryptocurrency wallets, and FOREX trading accounts; Digital books, music or video streaming; Cloud storage accounts; Payment services; Social media accounts used for marketing or advertising, loyalty programmes and any other; Computer programmes directly installed onto a computer or provide the software as a service; Intellectual property; The infrastructure of an online business – websites and blogs; Customer management services that manage mailing or newsletter descriptions. You may also have assets of sentimental or other value such as photos, family trees (ancestry.com), or emails. The best thing you can do is consider what you wish to happen to these digital assets and make provisions in your Will as to who has the right to access your digital assets, either stored on your computer, phone or that exist online, to amend or remove any profiles and provide any other notifications as required.   Provision should also be made in your Will as to where all of the details of relevant passwords and logins are contained.  It is therefore important to have a “password safe or manager” that stores and encrypts a list of passwords and user names for all online assets with the master password either provided in a sealed envelope with your Will or some other way with your Executors. In addition, many online providers have their own policies as to what happens when you die and the rights to those digital assets will vary from provider to provider – for example, Facebook allows people to turn a deceased profile into a memorial page and Google allows you to plan ahead and appoint inactive account managers who are notified if the account is inactive for a certain period of time or you can choose to have the account deleted entirely. Speak to your legal advisor about a specific clause in your Will relating to digital assets and what you would like to achieve.  This clause should cover whom you wish to leave your digital assets to, what that includes and any appropriate login data.

Mirror Wills In a typical, nuclear family structure, it is common for a couple to leave their entire estate to each other, and for their Wills to provide that after they have both died the family estate will go to their children. This is commonly known as a mirror Will. In the modern age, however, blended family structures are becoming increasingly common. If you have children from a previous relationship, you may find yourself stuck between wanting to ensure your children are provided for, and also ensuring your partner is looked after when you die. If a couple is comfortable relying on their new partner to provide for their respective children in the surviving spouse or partner’s Will, a mirror Will could still be used. However, these Wills do not create a legally binding agreement between couples. Either spouse or partner is therefore free to change their Will at any time during their lifetime. These Wills frequently result in claims against the estate made by the deceased spouse or partner’s children from a previous relationship. Mutual Wills A mutual Will is another available option. A mutual Will is a mirror Will signed alongside an agreement between the respective Will-makers that they will not amend the terms of the Will in a way that will worsen the position for their stepchildren. While mutual Wills are effective for protecting the interests of both partners’ children, they are restrictive on the surviving partner and can be difficult to enforce. To help avoid the risk of claims against your estate, and to offer peace of mind, a life interest Will may provide the answer. Life Interest Wills In your Will you can grant to somebody a life interest in an asset, giving that person the right to use that asset for the rest of their life. On their death, the asset will pass to the people named in your Will. Life interests may be granted in: Your entire estate; Specific assets e.g. family heirlooms; Real property e.g. the family home; or A right to receive income from estate property e.g. bank account, shares or other investments. A life interest can be a good way to provide for your partner, while still ensuring the asset will eventually be given to the named beneficiaries, usually your children. A common example is where a person provides a life interest in the family home to a spouse or partner, and once their spouse or partner dies the family home will pass to the Will-maker’s children. Often the couple will own the family home in equal shares. This allows each of them to deal with their 1/2 share in their Will in the way they choose. A life interest Will provides a basic level of asset protection. Any assets subject to a life interest will be held by the trustees appointed in the Will and do not legally belong to the person with the benefit of the life interest (such as the surviving spouse or partner). It can therefore provide peace of mind to the Will-maker that all of their loved ones will be looked after. On the other hand, a life interest can be restrictive for the surviving spouse or partner. The surviving spouse or partner effectively loses control over assets that they may have considered to be theirs if they were used by the couple to benefit both of them. Any dealings with the asset will require the trustees of the Will to consent, and will be subject to the terms of the life interest in the Will. Issues can also arise if the circumstances of the surviving partner change, for example, if they need to go into care or move into a retirement village. A life interest Will can also mean the children may not see their inheritance for many years. Holland Beckett’s succession and estates team is here to discuss your particular circumstances to determine if a life interest Will is right for you.

Contracting Out Agreements (often referred to as prenuptial agreements) are often viewed quite negatively. They can be seen as having one foot out of the door in a relationship. However, Contracting Out Agreements can be powerful tools to help you and your partner cement your intentions for how your property is dealt with when you die thus preventing a future argument between families. A Contracting Out Agreement is not just for separating couples - it can assist to ensure your wishes are upheld upon death. When you pass away with a Will, your partner has two options; they can chose to follow the terms of your Will pursuant to the Administration Act 1969 (“Administration Act”) or they can make an election under the Property (Relationships) Act 1976 (“PRA”) to have their share of relationship property determined. Why does this matter? This matters because modern relationships are complex. For a multitude of reasons you may not intend to leave your partner 50% of your property upon death. For many of our clients in second relationships, they want to provide for their partner, but they want the majority of their estate to go to their children from their first relationship. The option for partners to elect whether or not to follow your Will, can take control of your property out of your hands leaving what you may see as an unfairness to your children. This is why a Contracting Out Agreement can be such a powerful tool. With a Contracting Out Agreement in place, even if your partner elects a determination for a division of your estate in line with the PRA, they are bound by the terms of the Contracting Out Agreement which determines which assets are in the pool for division and which are out. What does a Contracting Out Agreement do? Under the PRA there is a presumption that upon death or separation your partner is entitled to an equal share of the relationship property. This legislation will apply to you unless you elect to “opt out” by entering into a Contracting Out agreement whereby you and your partner reach your own agreement on what property will be determined separate property and what will be relationship property. Without a Contracting Out agreement relationship property includes: The family home; The household chattels; Vehicles used for family purposes; That share of Kiwisaver or other superannuation policies accrued during the relationship; Your income; and Anything else acquired during the relationship or used for your shared life together. A Contracting Out Agreement is capable in most circumstances of mirroring the terms of your Will. It has the capacity to be very specific. Not only can you dictate which property belongs to which partner and their estate, you can also make special provisions for your partner upon separation or death. An example of this is in circumstances where you want the family home to pass to your children or some other third party upon death, you can still provide your partner with a qualified life interest in the home. You may decide, for example, that you wish for your partner to continue living in the home for a specific period of time (or the rest of their life) but as soon as they move out, start a new relationship, or die, the home will pass to your beneficiaries in accordance with your Will. A Contracting Out Agreement is a flexible tool capable of reflecting your Will. How do we make a Contracting Out Agreement? A Contracting Out Agreement is a binding legal document. Like most legal documents, there are specific procedures that must be followed to make sure your document is enforceable. For your Contracting Out Agreement to be valid and legally enforceable you will need to: Record the agreements reached in writing; Receive independent legal advice; and Have your signing witnessed by a lawyer. You and your partner will need different lawyers. Once you have engaged a lawyer, you can share your intentions for how you want your relationship property to be divided and any specifications for what you want to happen upon death. Lawyers can assist you and your partner to make sure you are both adequately provided for. If you have concerns about how your estate will be distributed when you die, we recommend that you discuss matters with your partner and get some advice. Furthermore if you already have a Will or a Contracting Out Agreement, we recommend that you review the terms of these documents regularly to ensure they still reflect your intentions and your circumstances.Talk to the Holland Beckett Family or Succession and Estates team for more information. This article was first published for First Mortgage Trust newsletter, April 2025.