10 Reasons Why You Shouldn’t Use an Online Will Kit

Preparing for your death can be an expensive proposition. You could leave it up to chance, but without an adequate will, everything you’ve worked for in life could go to the last people you want to see with it. Your loved ones could be left with no resources to help them survive after you’re gone. So, making a will is essential if you want to have any say about the final disposition of your assets. More importantly, you need to have a will to pass on your responsibilities the way you choose.

Lawyers charge big bucks for making a simple will. It’s tempting to do it yourself with one of those nifty online will kits you can easily find on the Internet by running a simple Google search. But it you think that’s a harmless way to save some cash, think again. These online will websites or software products miss the mark, especially if your situation isn’t absolutely simple and straightforward. Here are the top reasons why you should forget about making a will online and choose a legal professional instead.

1. Your love relationship has ended.

Generally speaking, your ex won’t inherit anything from you unless you specify it in your will. But, without a legal expert on your side, you won’t know whether your past relationship could be a problem or not – even if it was a spur-of-the-moment fling.

If you’re separated or divorced from your long-time spouse or life partner, the legal situation after you die can get messy. You may want them to get nothing. To accomplish that, you need a lawyer to craft the will with language that clearly states why your former partner or spouse is not a beneficiary.

If you are separated, divorced or in the process of getting a divorce, your lawyer will want to know specific details about the relationship such as when it started and ended. You’ll also need to give your lawyer a description and dates of any legal proceedings between you and your ex, as well as any court orders or other documents relating to the breakup.

2. You have a child or children from a previous relationship.

By law, you are expected to take care of your child dependents. This is no less true after you die than it is while you’re still living. If you don’t provide for their maintenance and support, your will probably won’t be carried out as you’ve written it.

Your will also needs to specify what would happen to your children if you were the only surviving parent. Even if you update your will yearly, something could happen to their other parent between the time you make a new will and the time you yourself die. To ensure your children don’t get placed with a random guardian, you need to address this possibility in your will.

Regardless of how common it is to have children from a previous relationship, online will kits aren’t designed to properly address these issues. A lawyer, though, can help you set up those provisions so they will be considered adequate by the court. Your lawyer will want to know your child’s age, who they live with, who spends time with them, whether either parent is paying child support, and what if any court orders have been made regarding the child.

3. You have a child who needs an enduring guardian.

If you have a child who needs special accommodations for a disability or long-term medical condition, you will want to make sure they have everything they need to survive and thrive throughout their life. The law also expects you to make these provisions. If you don’t choose how to set up the services your child needs, the court will decide for you in probate.

If your child needs enduring guardianship, it’s important to choose that person carefully and name a back-up guardian who would step in if your first choice is not available. You also need to include details about what medical treatments they need, what special services they will need, whether they need special housing, and how you want them to be cared for if you’re no longer there to do it yourself. Your lawyer can create a will that adequately provides for your special needs child for the rest of their life.

4. You don’t want to give expected portions of your estate to your spouse, child or other relatives.

Estates that end up in probate are divvied up in specific ways. Depending on the law where you live, that may mean your spouse and children would get the bulk of your estate. But, what if you don’t want them to? What if you want to leave your spouse less than the customary portion?

You might want your spouse to get less if you’re estranged or even just if your spouse has adequate resources of their own without a portion of your estate. More distant relatives with whom you have no relationship at all may also stand to inherit when you die without a will. If you don’t want them to, you need to have a lawyer include that in your will. Your lawyer may need to know why the relationship broke down, how it happened, whether you tried to reconcile with the person, and whether you’ve ever supported them financially.

5. You’ve chosen an heir that suffers from an addiction.

Your heart may go out to a loved one who suffers from an addiction. You want to see them have a good life, but you have no control over what they do. A will doesn’t fix that, but it can help you provide for them in a more lasting way than they could do by themselves. A lawyer can help you establish a trust and appoint trustees who can ensure your money is given out slowly rather than in one lump sum the person might use to feed their addiction.

6. You’re owner or part owner of a business.

Even the smallest business can be difficult to deal with after its owner dies. Businesses are complex by nature, and no one-stop internet will is going to address all the issues involved with passing the business or its assets on to your heirs.

When you meet with your lawyer to discuss your will, bring along evidence of how your business is structured. Your lawyer will need to know about the interests of any shareholders as well as your spouse, children, or anyone else who isn’t a partner in your business but deserves some or all of its assets.

Your lawyer will want to see three years of financial statements from your business, including balance sheets and profit and loss statements. Bring along your business plan so your lawyer can get a clear idea of your role in the company and what would happen to it without you. It’s also a good idea to create or update a succession plan for your business at the same time you make your will. If you’re using a trust to minimize taxation, you also need to bring details about that trust.

7. You have any special funds, such as a self-managed super fund, or a family trust.

Super funds can be extremely complex retirement funds to manage. Even if you’re one of the many business owners who have set up a superannuation fund to provide retirement pensions to employees, you may not fully understand how they work. Family trusts can be the same way, especially if family members don’t have a background in business or accounting.

Your lawyer will need to know the details of these kinds of funds or trusts to help you create a will that deals with them adequately. If possible, talk to the accountant or financial advisor that originally helped you set up the super fund or family trust. If that person is no longer available, consult with your current financial professional. Either way, they can give you all the details your lawyer needs to help you address these funds in your will.

8. You want some or all your assets to go to charities or other organizations.

If you’re deeply involved in working with your favorite charity, you may want to leave some of your assets to that organization in your will. Perhaps the charity helped you years ago, before you achieved your current financial success. Or, maybe you just think what the charity is doing is a good idea and a great way to enhance your community. You might want to donate to a school or club instead, especially if they have been a part of your life or the lives of your loved ones.

No matter what your reasoning for choosing them, you can ensure that your favorite organization gets something from you after you pass away. But here’s the thing about that: it takes a legal professional to make sure the wording is precisely accurate in your will so that they can receive the portion of your estate you want to give them.

Now, while you may want to leave all of your assets to this organization, you may have other obligations you have to meet first. An online will can’t look at the big picture to see how the responsibilities you have to others affects the donations you want to make. And, if you don’t meet these obligations, there’s a good chance your will is going to be contested. So, it’s important to work with a lawyer if you have your heart set on leaving anything to an organization.

9. You may have assets beyond what you list in the will.

When you have a very large estate, it can be easy to leave out assets when you draft your will. Even if you have a modest-sized estate, you may have assets you don’t realize are valuable or become valuable after you pass.
So, what happens if an asset isn’t mentioned in the will? That asset would be split up by the court in the customary way. You can decide for yourself how these assets will be distributed even if you don’t know right now what they are. Your lawyer can include information in your will about who will inherit your Residuary Estate when all other assets and liabilities have been dealt with.

10. You need help choosing a personal representative or guardian.

An online will gives you little if any guidance about how to choose the people who will carry out the terms of your will. A lawyer won’t choose a personal representative or guardian for you when you make your will, either. But, what they can do is talk it over with you and give you a better idea of what to consider when you make that choice. They can also help you determine if the person you want to choose meets the legal requirements for doing the job you’re about to assign them.

Making a will is serious business. It has to be legally correct and formally worded. It has to be signed and witnessed according to law. And, it has to take into account all the circumstances that make up your financial life and family relationships. To manage all these factors and still leave your estate to those you want to have it, your best option is to forego the cheap, easy method of using an online will kit. It may seem like an attractive option, but in many cases, it’s worse than having no will at all.


Preparing a Digital Asset Estate Plan and Will

Over and over again, the mainstream media have been publishing articles highlighting the ever increasing problem of what happens with our digital assets when we are gone.

Recently, the CBC in Canada told the story of Peggy Bush.

Peggy’s husband had succumbed to lung cancer and she liked to play card games on their iPad to pass the time. The card game stopped working so she wanted to update it. Unfortunately the 72 year old widow needed the Apple ID password, and her husband had never thought to tell her what it was.

The best option that Apple gave her was to create a new Apple ID, but this would mean re-purchasing all of the games that had already been purchased by her husband. Apple suggested that they would only be able to release the User ID and password of the account with a court order.

The Washington Post picked up on the story and run with the headline.

Her dying husband left her the house and the car, but he forgot the Apple password

And the Daily Mail in the UK ran with the headline

Widow who wanted her dead husband’s Apple ID so she could play games on their iPad is refused and told to get a COURT order instead

Google news is claiming the story was republished as 19,000 separate news articles.

Legal experts have been warning about the need to make out a will for centuries. By now, nearly everyone is convinced that creating an estate plan is absolutely essential, especially if you have many assets. Yet, even today, most wills say nothing about what you want your loved ones to do with your digital assets after you’re beyond taking care of them.

When we reach our 40s and 50s, most of us begin to think about what will happen after we’re gone. What will our relatives do about our house, car, savings and business? The usual thing to do at this time is make a will to outline our wishes and appoint an executor to carry them out. It’s all a part of maturing. But, think about this: you may have a last will and testament, but do you have a digital will?

Preparing a digital asset estate plan grows increasingly more important every year, as technology advances and more people embrace the digital age. For many years, it was the young people who had the most digital assets. But, as time goes by, those people age and older people become more connected.

In 2015, Limelight Networks, a digital content delivery network, did a series of surveys that were compiled and analyzed in their 2015 State of the User Experience. Limelight asked people from various demographics about their internet experiences and habits. A total of 1,302 people in Canada, the U.S., the U.K. and Singapore took the surveys.

What were the results? For one thing, an astonishing 51% of consumers aged 51-69 spent 15 hours per week online that anyone, including Millennials only 41% of whom of the spent that much time using a computer, laptop or phone to access the internet. The U.K. Office for National Statistics found similar statistics that revealed a whopping 70% of people aged 65-74 were online. Each of those people were leaving a digital footprint on the web. Along with their digital presence online, they were accumulating digital assets that would have to be dealt with when they were no longer able to do it themselves.

What Are Digital Assets?

To put it simply, digital assets are anything of value that can be stored or managed on a digital device. They include information you store on your personal computer, laptop, tablet or phone, as well as assets your store on the cloud. Their value may be monetary, such as bitcoin or a PayPal account. Digital photos are included, too, even if they aren’t bought or sold, if they have sentimental value for the user, their loved ones or anyone else who would be interested in them.

The value of a Facebook, LinkedIn or Twitter account is in its power over the user’s reputation and the good will he or she wants to express to others. Textual content has value, too, like a Word document that contains important information or content that could be bought or sold, or a Kindle library filled with books others might want to read.

Metadata, which is data about this data such as account numbers, usernames and passwords, also has value because it allows the user (and anyone who has that information) to login to the account and make changes. When you give others that metadata, they may be able to withdraw funds from your accounts, close your accounts, or steal your digital, intellectual and even physical property. It stands to reason that if these assets have value, you will not only want to safeguard them, but you may want to pass them on after you become incapacitated or die.

What If You Can’t Manage Your Digital Assets?

Once you realize the value of your digital assets, you can begin to imagine what would happen if those assets were lost or stolen after you’re no longer able to manage them. First, your loved ones would not benefit from them or the monetary or physical assets they control.

For instance, if you have a seller’s account on eBay, your loved ones won’t be able to manage that money. Most digital marketplaces have a set procedure for when an account isn’t used for a long period. PayPal will send your money to your bank account after a certain time, but what if no one knows about that money? They might close your bank account before the cash is sent, making it much harder for them to get it.

Your account numbers and passwords to utilities and other services allow you to learn your account balances and pay bills. But, if you leave a spouse and/or children in your household, they might not be able to pay the family bills. Power or water could be shut off to the house before anyone realizes a utility bill is due.

Social media accounts, just like any account with a password, might be hacked. Thieves in the digital underworld might use your social accounts to defraud others. They may make posts on your account that are disturbing to your friends and family. Your reputation can be damaged, too, if your private messages or online habits are revealed. If these are things matter to you, it’s crucial that you prepare your digital will while you still can.

What Do Popular Online Sites and Services Do with Your Accounts?

Since there are really no laws governing what happens with your digital accounts when you pass away, each company decides what happens to your account when you can no longer access it. The most popular social media sites have policies on this, but they’re different in each case.


Facebook’s policy on user death or disability is a bit strange in that it potentially gives power over your Facebook account to strangers. If anyone contacts them, no matter who it is, and they can provide a link to an obituary, Facebook allows that person to delete your account or choose to memorialize it. Your loved ones could get in trouble by using your account directly. That could be illegal and definitely goes against Facebook’s user agreement and policies.


Considering Twitter’s stated policy that you own your Tweets, it’s surprising that they also allow anyone showing a public notice of a death to close the deceased’s Twitter account or store a backup of it. Other than that, they give no guarantees about what will happen to your account after you die.


LinkedIn is another social site that allows anyone to close an account after they report someone has died LinkedIn needs a link to an obituary and the date of death. The only other things they need are some basic information, most of which is available by visiting your profile and making notes. They need to know your LinkedIn URL, your email address and the company you last worked for along with your name. They have to state their relationship to you, but if they don’t know you, they can just choose ‘other.’


YouTube is a bit stricter with their policy. They require the person wishing to manage your YouTube account to supply a digital copy of their Power of Attorney. Otherwise, the account may be deleted by YouTube after six months of inactivity on the account.


Amazon is a marketplace where products and services can be both bought and sold. When you’re the buyer, you are adding to your digital assets. When you’re the seller or have an Amazon Associates account, you may be doing the same thing – even after you die. Yet, Amazon has no clear policy about what they’ll do when someone passes away. If anyone gives Amazon any proof the company believes to be factual that you’ve died, then they can close your account.


Ebay also has no stated policy about accounts and ebay stores that are left when someone dies. If anyone produces a death certificate, they can close down the account. If you have funds in your ebay account or transactions going on in your ebay store, the people you’ve chosen to manage your estate might not become aware of it before a competitor (or anyone else) closes the account.


If you use your PayPal account often, it’s likely that you have some money there. PayPal will close your account if it hasn’t been accessed for three years. Then, it will dispose of your funds as it chooses or as the law requires. If the executor of your will doesn’t know about the account, that money will be lost to your loved ones. Other than that, PayPal has no standard policies whatsoever about what will happen to this important digital asset.

Making a Digital Will

A digital will puts you in the driver’s seat when it comes to your digital assets. You get to be the one who decides what happens to them if you can no longer use them. You’ll also have the opportunity to pass along the metadata that goes with each digital asset so the executor of your digital estate can follow your wishes.

Gathering Info

As you prepare your digital asset estate, you need to start by gathering all the information you have or can get about the digital assets you own, including account numbers, usernames, passwords and more. You’ll already know the details of some of your digital assets by heart. Then, you’ll have to look up and record any other digital assets you can’t remember precisely. It’s important to remember every account, but that can be hard if you use the Internet for a lot of different things.

Writing the Will

In most cases, a digital will is a part of the traditional will. The information could be contained in the will itself, but the possibility that the information will become public or used by someone else to commit fraud is significant. You would need to put all your account numbers, passwords and the specific digital assets you have in a legal document that could be viewed and used by just about anyone.

A better way to write the digital will is to have it on a separate document. You can include a very brief mention of the existence and location of your digital assets estate plan in your standard will. It may seem like a monumental task, but you need to include as much of your digital information as you can. Then, you need to name a special executor to carry out this digital will.

This separate document will likely need to be updated frequently. You may change passwords, add or delete accounts or change your mind about how you want them handled. The more up-to-date you can keep your digital asset estate plan, the more helpful it will be to your executor and the more good your family will get from your digital assets.

Choosing an Executor for Your Digital Will

Another thing you need to do is appoint a digital asset estate manager. Many people who have thought about the importance of a digital will are still giving this job to the same executor that must deal with all their physical property and funds. Then, that person is overloaded with responsibilities or doesn’t have the tech knowledge to do the job right. So, having a digital will may not be enough. Instead, you need to carefully consider who will manage your digital assets only after you die. Finding that perfect executor can be quite a task. Here are a few guidelines to help you along the way:

1) You need someone you can trust.

This person will have access to all your digital assets. They may have a lot of freedom to do as they wish rather than following your wishes. Make sure you choose someone who has you and your loved one’s best interests at heart.

2) The executor needs to be tech-savvy.

Since your digital will executor will be working with a computer and digital data to manage your digital asset estate, they need to have a good knowledge of technology. They need to be able to access all your digital assets, whether they are on your computer or stored on the cloud, and make the changes you have requested. They also need to be comfortable with asking for tech support and dealing with Internet companies.

3) They need to be hardworking and dedicated to carrying out your wishes.

Digital estate management can be an overwhelming job to someone who isn’t prepared to do whatever it takes to complete all your digital business in a timely way. So, choose someone who is responsible and hardworking.

Online Digital Assets Management Options

Since most people have such an enormous internet presence, managing digital assets can be extremely difficult. After all, who remembers every site they supplied a password for and what that username and password is? Have you really considered what you’ll do with every asset? If you’re like most people, even you aren’t aware of everything your digital asset estate holds.

A few options for managing digital assets have been devised by Internet companies. Most of them are designed for storing usernames and passwords. Although this service does have some value, it only begins to touch the breadth and depth of your digital assets. A better solution would be one that not only stores the basic information about those assets, but also lets your guardian know what to do with them.

WishesKept – A Better Solution

WishesKept is a comprehensive digital asset estate management tool. Not only does it allow you to store the details of your digital assets – but it also allows you to store everything about your life in one safe place, where is can be shared with loved one when the time is right.

The beauty of WishesKept is its detailed prompts for adding the information your digital will executor will need. So, you don’t have to remember each account or even each category on your own. The prompts guide you through the process, and will often remind you of digital services you may have forgotten about or not used in a while.

While most password applications only store your login details, WishesKept lets you store important information like your bank accounts, loans, mortgages, insurance policies, home bills, advance care plan and your funeral preferences. In fact WishesKept records hundreds of facts, covering all aspects of your life (both online and offline).

Wisheskept lets you organize your life and gives you a secure place where you can store everything important to you and your loved ones.

What happens when a business owner dies?

Life as a business owner can be stressful at the best of times. But if you think owning a business is tough, figuring out what happens when a business owner dies (or leaves suddenly) can be an absolute nightmare.

The death or permanent disability of a partner or business owner can result in chaos for other business owners, business associates and the family. It can often threaten the core survival of the business itself.

Did you know that fewer than 30% of small business owners have a succession plan in place?

That’s a shocking statistic – but it makes complete sense when you consider that most businesses are started informally between two or more people.

Often the partners are so busy growing the business that they don’t have the time or money to put anything formal in place. And when they do, they often form a company or a partnership with the prime focus around shareholding or equity.

Thinking about death at the start of a business venture is the last thing on their mind.

Short Term Fixes and Potential Issues

When a business owner dies or becomes permanently disabled, the remaining owner(s) need to figure out ways the business can continue with the least disruption possible. Some of the options include:

  • Recruit a qualified replacement
    Hiring a candidate with similar skills can quickly fill a void. Keep in mind that the person will not have the business knowledge or personal relationships that the previous owner had. The remaining owners will need to factor in time to bring the new person up to speed, and they may need to take over the management of client relationships for the key accounts.

    They cannot expect the new person to match the 100% efficiency of the previous owner. It is a good idea to consider applying the 80/20 rule where they get the new candidate to work on the 20% of the business that will provide 80% of the benefit.

  • Train an existing employee to do the job
    Existing employees will often understand how the business works, and will already have relationships with many of the existing clients. If the job is not too technical, consider training the employee to fill the void. Once again, concentrate on the things that will have the greatest positive impact on the business. Paying Bonuses can often motivate staff to step up into the new role.
  • Offer shares to existing employees
    While most employees will be unable to take up this type of offer, your most senior employees may be in a position to help. The added benefit is that the employee is more invested into the business and will want to see it succeed.
  • Contract work out to a qualified competitor
    In most cases this will not be a practical option. This should only be considered if the remaining owners are able to isolate the work into client or contract lots, without exposing big parts of the business. This option is especially helpful if there are non-performance clauses, and the competitor can guarantee completion on time.

    The remaining owners may want to consider implementing a confidentiality agreement. However, even with a confidentiality agreement in place, they need to be prepared for the competitor to gain knowledge about the business that can be used against them in the future. More often than not, this means working with competitors is untenable.

  • Borrow to fund a reduction in cashflow
    A short-term reduction in cashflow is almost inevitable. Borrowing funds can help them get over the temporary shortfall. They should only consider this option if they are sure the business can return to its previous income levels, and that it can service its loans in the meantime. If they are unable to service the loan, they may be forced into liquidation, and if they are considering closing down the business anyway, they don’t want to be adding further debts into the company accounts. The bank will require additional security, and may require new personal guarantees.

    If they are really desperate, they can consider “factoring” the debtors ledger. This will give them a short term cash boost – but will result in significantly reduced cash-flow in the months that follow.

    Remember that “trading while insolvent” is an offense that will make them personally liable for company debts. If they think this is a possibility, they should get advice from an accountant as soon as possible.

  • Sell assets to fund a reduction in cash-flow
    Have a look around the business to see if there are surplus assets that can be sold to inject cash into the business. They need to be assets that don' need replacing in the immediate future. The assets will not realize their full value, and may not be easy to sell. If it is necessary to replace an asset shortly after it has been sold, this is merely delaying the cash-flow problems (and actually making it worse in the long run)

What happens to the business?

When a business owner dies without a plan, the business structure can often dictate the outcome.

  • Sole Proprietorship :
    In a Sole Proprietorship, the business and the owner are essentially the same thing. If the owner of the business dies, it is almost certain that the business will too. The business assets will become part of the owner's estate, and will be liquidated to pay off any business debts. If there is anything left, it will be distributed according to the persons will (if they had one – but that’s another story)

    In some cases the business can be transferred or sold to another person. This needs to be handled within the owner's last will and testament. While the business itself may not be worth much without the owner, the business may contain significant good will (eg key customers) that can realize a value if it is sold to a competitor. Not only does this help the family of the deceased owner – but it can help the owner's of the old businesses to move forward.

    There may be cases where a family member can step in and continue the business. In a sole proprietorship, this presents its own set of problems.

    Because the business forms part of the owner's estate, it is normally distributed as part of the will. If there is no will in place, then the distribution follows a predetermined formula that doesn’t automatically allow the entire business to be passed to one person. Depending on the country and state/city the owner lives in, the rules may vary slightly. But as a rule of thumb, the spouse or defacto partner will receive 50% of the estate and the remaining 50% will be split evenly between any children.

    If the family can reach agreement, it may be possible to pass the business to one member of the family – but it may be challenged in a court of law. For this reason, it is a good idea to have the business accurately valued to stop any future arguments about unfair/preferential distribution under the will. It will also be necessary to get the business valued if the tax department requires an estate tax return to be completed.

  • Corporation or Limited Liability Company :
    The value of a Corporation or Company lies in its shareholding. Because a Corporation is its own legal entity, a Corporation will survive the death of one of its owners.

    When one of the owner's (shareholders) dies, the shares will normally become part of owner's estate and will be handled within the provisions of their will. If the owner holds the majority of the shares, or is a sole owner, the new owner of the business will be the estate.

  • LLC :
    LLCs have their own operating agreement which normally includes a provision that explains what happens if a member dies.

    If the agreement allows the LLC to continue after the death of a member, new members can be admitted in their place. If the agreement doesn’t have a continuity clause, the local laws will determine what happens.

    In most cases, this will involve the winding up of the LLC and the distribution of assets.

  • Partnerships :
    If a formal agreement is in place, there may be provisions for sale or purchase of a deceased partner's interest.

    Without the existence of a formal partnership agreement, the death of a partner will automatically dissolve the partnership.

    This can cause significant problems for the remaining partner. It is their responsibility to wind up the business. They will have to run the business to complete any unfinished contracts, not take on any new business, pay off debts and distribute whatever is left. If there is not enough left at the end of this process, it is the surviving partner and the deceased estate's responsibility (liability) to pay for any shortfall.

    Even if the remaining partner can continue to run the business in their own right, it cannot be continued under the existing partnership. The process of winding up a partnership can cause substantial damage to the finances and goodwill of the business. It can also take considerable time to sort out. Obtaining a probate to a deceased partner's estate can take months and can significantly slow down the process.

    If a partnership agreement is in place, provision can be made for payment to a dependent spouse/partner shortly after death. The amount is normally discretionary and determined by the surviving business partner. It can be offset against the deceased share of the partnership and means that dependent spouse or partner can receive income before the estate of the deceased person completes probate.


Winding up a business or partnership can take a long time. Two or three years is not unusual. Delays can be caused by the need to prepare financial accounts as-at the date of the partner's death, subsequent payment of creditors and winding up the actual business.

You may have options

If you are in a position where you don’t have to dissolve the business and the business can continue without the previous owner, you have several choices available to you:

  • Take the deceased representative or heir into the business :
    This option can tend to be problematic, especially if the representative or heir is not as passionate, experienced, or willing to negotiate as your partner was.

    Before heading down this path, ask yourself if they will support or oppose the decision of the remaining shareholders. Are they only in it for the cash/dividend payments? Will they be willing to put in the time and effort to support the business? Do they have the skills and technical knowledge to carry out the responsibilities and duties of the previous owner? If they are not going to put in the same effort as the previous partner, are they going to be negotiable on the current distribution of dividends and/or remuneration? What if the heir or representative is a minor and unable to enter into binding contracts? Do they have the resources to support the business if additional capital is required?

  • Sell out to the deceased Owner’s representatives or heirs :
    Unfortunately, this option can lead to a lot of arguing over the purchase price. This may also not be practical if the proposed new owner is not qualified to operate the business, or the remaining owners are not prepared to retire or remain as business employees.

    Before heading down this path, ask yourself how you will determine the price. Often the best solution is to get the business valued. However, this costs money and can take considerable time and expertise to come up with a realistic value. The other problem is that a valuer may not fully appreciate the good will included in the business and the emotional value the business has to the remaining partners. They may not be ready to retire yet, and this has some bearing on the value of the business. It also depends if the business is in financial distress and its ability to continue trading without the previous owner.

    Once a price has been determined, there is also the question of payment terms and the ability to be released from any business debts and personal guarantees.

  • Bring in outsiders to purchase the deceased owners share :
    Sometimes new partners can be a good thing. The problems with this option are very similar to selling out to the deceased owner's representatives or heirs. The advantage with this option is that you can select someone who can add real value to the business or has domain experience (eg marketing, technical etc)

    Unfortunately there may not be a pool of willing buyers, and you may have to discount the price, or offer equity in exchange for work. The instant injection of expertise to replace the missing owner will often justify this sacrifice.

    Another issue you may face is that outsiders may not be interested if the result is a minority share. You may have to give up more of the business to attract the right talent – and this may put you in a position where you lose control of the business anyway.

  • Buy out the deceased Owner’s interest :
    Often, this is the best choice. However you will still have to negotiate price and settlement terms, and you will need to come up with the money to fund the agreed price. This is where a buy-sell arrangement can help. Without a buy-sell agreement, and without any other purchasers, the parties may feel that they are paying too much or receiving less than they deserve. Strained negotiations and legal delays may make it difficult to reach a mutually acceptable position. Additional difficulties can occur if the deceased or disabled owner has given a Personal Guarantee on a lease or business loan.
  • Liquidate the business or sell to a third party :
    Unless the parties can agree on another option, this alternative may be forced on them. Unfortunately a business that is forced to liquidate or is in distress has a much lower value than when it is a going concern. Finding a way to run the business in the short term will often result in a greater return – providing there is a pool of willing purchasers. However, if the business is in a specialist niche, finding a buyer may be a real problem and you may be forced to liquidate the business.

    Dragging the process out is also not a good idea. If the sale or liquidation is delayed there may not be sufficient cash to pay all debts. This may result in the forced sale of personal assets to meet personal guarantees.

A buy-sell agreement

A buy-sell agreement is a legally binding contract that spells out exactly what is to happen if one of the business owners dies or becomes permanently disabled. A buy-sell agreement is also referred to as a business continuation agreement, a stock purchase agreement, or a buyout agreement. Buy-sell agreements can also be triggered by retirement, divorce, bankruptcy of an owner, conviction for a crime or loss of a professional license required to work in the business.

The document can be as simple or complex as needed and can provide for virtually any contingency. In most cases it states that the survivors will buy the deceased owners share of the business. It will also include an objective formula to work out a value or an actual purchase price.

The agreement is put together well before it is needed and when the owners are on a level playing field. It provides a fair way to arrive at a value, and allows the surviving partner(s) to keep control of the business.

Raising the money and payment terms

A buy-sell agreement normally documents a method to fund the purchase of the business when it is needed. If the buyer does not have the cash or access to cash when needed for the buyout, the agreement won’t serve any useful purpose.

Common ways of funding a buyout include Key-person Insurance, Life Insurance policies held in trust for the other business owners, Debtor factoring or Bank Loans. When an owner is retiring, the agreement may also include options to fund the buyout from future revenues with extended payment terms.

What can you do now?

No matter what, have a plan!

We can't stress this enough. Take the time to sit down with your business partners or family to discuss a succession plan, and then PUT IT IN WRITING. It is definitely important to decide who will take over a business, but it’s just as important to decide how they will take over – and what that means to the rest of your business partners and family, both financially and emotionally.

For when you are sick or disabled :
Consider getting “Key Person” insurance for each of the owners. If you are a sole trader, you need to look into “Business Expense” insurance and “Total Permanent Disability” insurance. Key Person cover will pay a business an agreed monthly benefit for a set period if a key person is disabled because of a continuing sickness or injury. A key person is anyone in the business responsible for generating business income.

For when one of the owners dies :
Consider getting life insurance held in trust for each of the other owners. Life insurance provides a lump sum payment to help minimize the financial impact on your business if you or a key team member dies or is diagnosed with a terminal illness.

Prepare a Buy-Sell agreement :
Unless you plan to be lucky forever, you’d better have one. Without it, a closely held or family business faces considerable financial and tax problems on an owner’s death, incapacity, divorce, bankruptcy, sale or retirement.

The cost of a buy-sell agreement is tiny compared to its benefits. A buy-sell agreement can ward off infighting by family members, co-owners and spouses, keep the business afloat so it's goodwill and customer base remain intact, and avoid liquidity problems that often arise on these major events.

Put the business in a trust :
A trust can be a particularly good option for family-run businesses, offering tax advantages and flexibility in the way profits are distributed to beneficiaries. They also provide a legal entity that does not die.

A trading trust can survive the death a traditional business owner. But trusts can have their drawbacks as well. As with any major decision, professional advice is paramount in deciding if a trust is right for your business.


WishesKept has an entire section devoted to business continuity.

You can store scanned copies of your insurance and business agreements in a highly secure online vault.

Provisions have been made for recording account details and supplier/client instructions.

The information is highly encrypted and can only be shared if you become incapacitated or are no longer here.

What Happens to Someone’s Property after They Die in New Zealand?

Nearly everyone leaves behind some sort of property when they die. At that point, it is up to the people remaining to figure out what to do with it. At a time when grief can be nearly overwhelming, someone has to deal with the estate. While this may be a difficult task, knowing what to do can bring about the first bit of relief in the situation.

Who is responsible?

The personal representative of the deceased is responsible for distributing the deceased's property. A personal representative is either someone who was named as executor in the deceased's will or a court-appointed administrator, who is usually chosen from among their close relatives.

What is included in the deceased's estate?

The estate of the deceased includes all their possessions. Physical property might include clothing, jewelry or vehicles, among other items, as well as real property such as land or a house. It also includes any money they have in a bank.

When the deceased owned property with someone else as joint tenants, this means that they both owned the property. This may happen if two people own a house together. Because the house belonged to both of them, the person still living automatically takes sole ownership of it and it is not considered a part of the estate. However, if they do not own the property jointly but each have an individual share in it, this is called tenants in common. In this case, the deceased's share of the property becomes a part of his estate.

Is there a need for an official administrator of the estate?

For most estates, the answer is yes, there does need to be an executor or court-appointed administrator to satisfy legal requirements. The only exception is that if the deceased left only a small estate, then it does not have to go through probate and thus doesn't need an official administrator. A small estate is defined as one that does not include ownership of land but does include any or all of the following:

  • $15,000 in bank accounts.
  • $15,000 in shares.
  • $15,000 in life insurance policies.
  • $15,000 in Government stock.
  • $15,000 in local authority stock.

This property can be transferred to the executor or a close family member without probate. Remember here that real property such as a house that is jointly owned is not considered a part of the estate, so joint ownership of land does not require probate, either. The executor, administrator or a beneficiary of the estate simply provides a death certificate to the person or organisation holding the property. As soon as they are satisfied that probate and letters of administration have not been granted by the court, they can release the property.

Steps in settling the estate

1. Whoever is handling the estate, whether that is an executor or a beneficiary, starts the process by applying to the courts if the property amounts to more than what would be considered a small estate. Probate must be granted before the will can be carried out. If there is no will, the court appoints an administrator.

2. After the person who will take care of the property has been chosen, either in accordance with the will or by order of the court, the property must be identified and prepared for distribution. A part of this is handling claims against the estate and paying taxes and debts.

3. The property left after satisfying debts, taxes and claims then has to be distributed to the person(s) entitled to it.

How to apply for probate if the deceased left a will

If the deceased left a will naming you as executor, the first step you need to take is to find the latest will and codicils, or changes. The best way to find out about them is to go directly to the deceased's lawyer or the Public Trust.

Once you have the final will, the next step is to apply for probate. In most cases, the estate's lawyer puts together the required documents, application and affidavit. The affidavit contains evidence that the person has died and where they were residing at the time of their death, along with a statement that the will is the final will of the deceased. The entire application, including all its required documents, must be prepared in the correct form, according to the High Court Rules. You then take over as executor and file the application. You get probate for the will when the High Court recognizes it as a valid will.

A High Court trial may be needed to determine the validity of the will if someone claims it is not an authentic will or the final will of the deceased. If that happens, a lawyer represents the estate.

After the High Court approves the will, it makes an order granting probate or letters of administration. The order and the will both become matters of public record, which can be viewed by anyone.

How to apply for letters of administration if there is no will

Your loved one may die without a will. This is called dying intestate. If they do die intestate, someone will need to file an application to get approval for administering the estate. This can be a closest relative, a trustee company or Public Trust. Even if the deceased had a will, this needs to be done if the will is invalid, named no executor or named an executor who will not or cannot follow through with handling the estate. The High Court approves an administrator, officially allowing them to deal with the estate.

What happens to the house and land?

Once the court grants probate or letters of administration, the house or land can be transferred legally to the executor or administrator. This personal representative can then transfer it to the beneficiary. However, if the property was owned jointly, it goes immediately to the joint owner.

Identifying property and obligations of the deceased

Once you approved as executor or administrator of the estate, you need to gather information about the deceased's assets and liabilities.

1. Find all the assets.
2. Take possession of the assets.
3. Have the assets valuated if necessary.
4. Identify anyone who might make a claim against the estate and seek a settlement of those claims.
5. Pay the deceased's debts and taxes.

Finding the assets

Finding all the assets of someone who is deceased is not always a simple task. You need to know about all their assets, including bank accounts, insurance policies, share accounts, overseas assets and any property that can be called an asset of the estate. In some cases, you might have to investigate this by looking through the deceased's property and papers, talking to people who know about their assets, and writing to organisations that hold their assets.

Taking Possession of the Assets

The administrator or executor shows the court order granting them administration to the organisations and individuals who are in possession of or responsible for the assets at the time of the death. As a part of this task, you need to produce the court order when dealing with the Land Titles Office to gain legal possession of the land. You will also need this document when dealing with overseas assets.

Settling claims against the estate

In certain circumstances, there may be valid claims against the estate. If a close family member is left out of the will, they may be entitled to a share under the Family Protection Act. Anyone might have a claim against the estate if they helped the deceased and were promised something in return. This would fall under the Law Reform Act covering Testamentary Promises. The executor or administrator of the estate needs to resolve such matters before moving ahead with distribution of the assets.

Making payments for debts and taxes

You first have to find out what the debts of the estate are. To help ensure that all debts are found, executors or administrators typically place a Notice to Creditors in the newspaper to let creditors know to send any claims against the deceased's estate to them. Once you know what the debts are, they can be paid out of the deceased's assets.
The deceased's taxes must be paid before the beneficiaries are given any of the remaining property. You must file tax returns covering the time from the last filing to the date of death, as well as tax on estate income earned after that date.

Distributing the Remaining Property

If there is a will, the executor transfers the deceased's property to the beneficiaries as named in the will.
However, if there is no will, the property is distributed to family members as required by the rules of intestacy. These rules name the following family members in order of their priority:

1. Spouse, civil union partner or de facto partner.
2. Children, whether or not their parents were married.
3. The deceased's parents.
4. The deceased's siblings.
5. The deceased's grandparents.
6. The deceased's uncles and aunts.

(A de facto partner is considered the top priority under intestacy only if they and the deceased were in a relationship for 3 years or longer, if there is a child of the relationship, or if the de facto partner contributed to the relationship substantially.)

The rules of intestacy determine who inherits and in what proportions. The following are some of the most common situations.

1. There is a spouse or partner and children:

The spouse or partner gets all of the deceased's personal physical property such as cars, furniture, jewelry, etc. They also receive a set amount, currently $155,000 plus one-third of the remaining property. The children split the remaining two-thirds equally.

2. There is no spouse or partner but there are children:

The children split the property equally.

3. If there is no spouse, partner or children:

The deceased's parents get all the deceased's assets.

4. If there is no spouse, partner or children:

The deceased's siblings take equal shares of the assets.

What if the deceased and their spouse or civil partner were not living together?

The spouse or civil partner is still considered as the top priority unless there was a Family Court separation order. If such an order was in place at the time of the death, the spouse or partner has no right to the property if the deceased died without a will.

What if the deceased leaves behind none of these family members?

If the deceased had no spouse, partner, children, parents, siblings, grandparents, aunts or uncles who survived them, their estate may go to the government.

Can the distribution of the property be challenged?

Anyone who disagrees with the way the property is distributed may challenge the distribution if they would have right to property under the Family Protection Act, the Law Reform Act of 1949, or the Property Act of 1976. These acts cover family rights, testamentary promises and relationship property rights.

How long does it take to distribute the estate?

In most cases, it only takes about six months to make all the distributions after the grant of administration. Factors that can affect the amount of time this takes include: types of assets, terms of the will, any challenges to the will, and legal complexities.

If the terms of the will are complex, no one may be able to receive their share of the property until the estate is finalised. However, interim payments can be made in situations like the following:

1. All property is in the form of cash or can quickly be turned into cash.
2. There are few beneficiaries.
3. All liabilities can be found and paid first.

Maori Land

When an owner of Maori land dies, the Maori Land Court must order the deceased's land interests to be transferred to their successors.

If the deceased made a will, they were required to only pass on Maori land to a member of the whanau or hapu associated with the land. If they are not, they do not take possession of the land,
but may have a life interest in it or a right to income from the land.

If the deceased did not make a will, rules established in Te Ture Whenua Maori Act determine which whanau members receive the land.

Whanau at tangihanga

Whanau at tangihanga can make certain decisions about Maori land. Once they arrive at a decision, it must be confirmed by the Maori Land Court. This decision may involve setting up a whanau trust, a Maori incorporation or replacing a whanau trust trustee.

Ways to prevent problems for your heirs after your death

There are certain things you can do to make it easier for your heirs to settle your estate. Most importantly, you need to make a will as soon as possible and make sure you name an executor who is willing and able to do the job. If you name someone and they become unavailable later on, you need to change the will to name a new executor.

If you have a relatively small estate, you may be able to keep it in the category of small estates that do not require probate. You may be able to accomplish this by spreading your bank assets between more than one bank so that each has less than $15,000.

Your spouse or partner may be left with no income during the time between your death and the High Court's approval for distributing your property. You can prevent this by opening at least one joint account with your spouse or partner. They will then have access to your joint funds with no interruption.

Preparing for your own death can be a difficult thing to face. Yet, doing so can save your loved ones pain and heartache while making the estate easier to settle. If you are the one who is now dealing with a deceased person's property, knowing what to do certainly makes your life easier. Why not use the situation as a reminder to make this process easier for the person who administrates your estate?