Navigating End-of-Life planning amidst rising dementia rates

Clive Fernandes

Clive Fernandes

Auckland, January 30, 2024

In the complicated world of planning for the end of life, there has been a rise in last-minute requests for wills. This can be traced to the fact that more people in Southland and across New Zealand are dealing with dementia and Alzheimer’s disease. 

This trend was brought to light in the ‘Dementia Economic Impact Report 2016’ by Alzheimer’s New Zealand. The report showed a big increase in the number of people with dementia – from 62,287 in 2016 to an expected 102,015 by 2030.

This shift in society, combined with the fact that people are living longer, makes it clear that planning for the future, especially financially, is becoming more and more important.

A Prudent Approach

Given this trend, Leanne Shallish, Principal Trustee at Public Trust in Invercargill, says that it is important for people to make wills while they are still able to think clearly. As more seniors are choosing to live in retirement complexes, she highlights the need for making wills before moving into such places, as it has become a common practice.

Along the same lines, it is essential to deal with KiwiSaver situations actively. This ensures a well-rounded financial plan that considers all the important aspects of getting ready for the end of life.

KiwiSaver as a Pivotal Asset

In understanding the ins and outs of end-of-life planning, especially the money tied up in KiwiSaver, I want to stress how crucial it is to see KiwiSaver as a big part of your overall plan.

Considering the average KiwiSaver account has about $28,000 & growing, it is not just a savings account – it is a vital part of what you leave behind.

When your assets, including KiwiSaver, go over $15,000, your family needs a High Court order to start sorting things out after you are gone.

Not including KiwiSaver in a will can make things more complicated.

It could lead to a probate process, which can be complex and take a long time, putting extra stress on the family that’s already dealing with the loss.

KiwiSaver probate processes can impact how your funds are distributed if your investment exceeds $15,000, as mentioned earlier.

In Case A with a will, your relatives will likely apply for ‘probate,’ and once approved, your KiwiSaver provider transfers funds to your estate as per your will.

It’s important for them to know your provider for a smooth withdrawal.

In Case B, without a will, the process is complex and costly. Your family must apply for an administrator through “Letters of Administration,” and assets are distributed based on the Administration Act 1969, taking six to 24 months, depending on how complex they are.

Regularly review wills and seek professional advice to stay on top of things.

Preparation today can safeguard your family from financial challenges and legal complexities, which is why it is also recommended to fill out a KiwiSaver HealthCheck, to understand where your unique situation places you currently and how to move forward.

Some key steps

On a similar note, planning for the end of life is essential to make sure you and your loved ones feel secure.

Let us break down some more key things to consider:

Estate Planning: Make a plan for your belongings so they go where you want. This might involve trusts for managing things and making sure your loved ones get what you want them to.

Advanced Directives: Create legal papers that say what kind of medical care you want if you can’t talk about it. This is especially important when communication is difficult.

Life Insurance: Check your life insurance to make sure the people you want to get the money are listed, and that you have enough coverage for what you need.

Long-Term Care Planning: Think about the possibility of needing help for a long time, like in a nursing home or at home. Figure out how to pay for this kind of care.

Healthcare Costs and Insurance: Plan for changes in healthcare costs, like what Medicare covers, and think about extra insurance you might need as your health changes.

Funeral and Final Expenses: Make plans for your funeral ahead of time, and if you can, pay for it. This eases some stress for your loved ones.

Tax Planning: Understand how taxes might affect your family and plan to make it easier for them.

Beneficiary Designations: Keep your retirement accounts and life insurance updated so the money goes to the right people.

Financial Power of Attorney: Choose someone you trust to handle your money matters if you can’t.

Everyone’s situation is different, so these plans should fit what you need and want. Talk to financial advisors, lawyers, and healthcare pros for advice that fits your unique needs and goals.

Clive Fernandes is the Director of National Capital, a financial advisory firm that provides personalised investment advice, primarily focusing on KiwiSaver.
Disclaimer: The views expressed in the above article are his views. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.

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