Fuseworks Media

Legacy Planning: Seniors’ ambition to strengthen family financial security – NZ Seniors

Auckland, November 2023 – Estate and will planning is top of mind among older Kiwis amid current economic uncertainty, with more Kiwis over fifty planning to provide financial support to their loved ones.

According to new research by New Zealand Seniors, around eight in ten (80%) Kiwis over fifty have intentions of leaving an inheritance, with two-thirds (66%) aiming to provide greater financial security for their younger family members. Meanwhile, a growing number of (37%) of Kiwis have already or are planning to transfer their wealth to their loved ones before they pass.

The Legacy Report 2023, commissioned by New Zealand Seniors in partnership with consumer research group, CoreData, surveyed more than 500 Kiwis over 50 about their attitudes toward leaving financial legacies.

The study found over half (54%) believe the wealth of younger generations is now largely reliant on how much they inherit. And while the majority (82%) already have a wealth transfer plan in place, just over half (58%) have discussed a will or an asset inventory with family.

Nearly a third of survey respondents (30%) agreed that leaving a positive financial legacy behind is now more important than ever, with the vast majority planning to pass down financial assets, such as valuable personal property (72%), real estate (68%), and cash savings (65%).

Interestingly, the older Kiwis get, the more thought they give to legacy planning. According to the findings, less than a third (31%) Gen X respondents have given a great or considerable amount of thought to their legacy, compared Baby Boomers (49%) and Pre-Boomers (68%).

Vicki Ammundsen, Director of Vicki Ammundsen Trust Law, who specialises in family law, will and estates, comments on the growing trend of passing down financial legacies in life: “It is helpful to appreciate that legacies do not necessarily have to be made following death. Provided sufficient resources are retained to ensure an appropriate standard of living, lifetime support can be more meaningful and a better representation of values than inheritances. Looking at legacies through the lens of the recipient can provide helpful guidance as to meaningful financial support that is reflective of personal values independently of legal convention, While these may be difficult conversations to start, once the conversation has been started it can be re-visited and built on. Regardless of views regarding legacies, the importance of legal advice cannot be overstated.

Economic challenges dent legacy confidence

Approximately a fifth (23%) feel less confident about the help they can afford to give. And well over half (57%) have some concern about the financial legacy they will leave behind, the most common of which is being unable to leave as much as they would like (41%).

A key consideration for Kiwis has been the slew of economic challenges in recent memory. On one front, the pandemic disrupted jobs and wages. On another front, property in New Zealand has traditionally been in short supply and, therefore, expensive. And earlier in June, the country slipped into recession.

According to the Reserve Bank of New Zealand, most Kiwis are homeowners, and more than half (57%) of household wealth consists of land and houses.

In this context, an overwhelming majority (91%) of respondents have estate planning top-of-mind. This majority believes home ownership in New Zealand is becoming increasingly difficult for those whose parents are not able to help.

The research also found two-fifths (40%) of seniors hope that providing a financial legacy will support the younger generation with getting into or ahead in the property market.

For some, they believe executing on their wishes before they pass is key to successful legacy planning. The research uncovered that almost two in five (37%) are in the process of planning to transfer or have already transferred wealth. And among them, cash savings are the most common (52%), followed by personal property (34%), and real estate (29%).

Leaving nothing unsaid

The findings also highlight the significance of open communication, revealing that an overwhelming majority (86%) of Kiwis over fifty consider discussing inheritance with the family to be at least somewhat important. Furthermore, slightly more than half (52%) deem this conversation to be very or extremely important.

Engaging in open conversations and sharing your legacy plans with loved ones is a fundamental step in guaranteeing the successful execution of your intentions.

Family trust law specialist, Vicki Ammundsen, shares advice for starting legacy conversations with loved ones: “Conversations regarding mortality and legacy planning can be confronting especially where these are left until later in life. The recommended approach is to communicate with family members or other parties involved in your life regarding wishes, fears, expectations and how these change over time. A common strategy is to review wills and life plans each decade or sooner where there is a major life change. It is also important to have legal support so that legacy planning and testamentary wishes are correctly recorded with an appreciation of the relevant legal framework.”

 

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