Rule #1 for Modern Investors
"Be very romantic but keep the real estate in your name."
I stole this rule from Erica Jong, an irreverent feminist novelist who wrote 'Fear of Flying' if you are old enough to remember. It caused quite a stir at the time. Her rule applies to anyone who owns property, not just women.
The reason this is my number one rule is simple: if you are investing in anything, you need to have control of it. Why would you buy anything if you can't control it? I know a lot of women in particular who feel that their families will take care of them, and that's great. Regardless of your faith in human nature: you, your partner and your children need to know where that property title is, who is on it and what it means. You need to know how your property is secured and it is properly accessible to you or your estate executor should they need to take action in an emergency. And to that point...you do have a will, a clear title position, and a property share agreement, right? What about a Power of Attorney? Because if you don't, let me scare you right now into getting independent legal advice.
According to recent statistics, fewer than 50% of New Zealanders have a will. And half of those who do, are out of date, and therefore invalid. As things change in your life, so should your will. Your will should also reflect what you and your property partner(s) have agreed. When was the last time you updated your will? Have you since divorced or had a baby? Sold a property or started a business? Do you have a Family Trust to protect your assets for your beneficiaries? Because I have to tell you now: I've seen what happens when people don't. You may feel very secure in the knowledge that your family would all do the right things if something happened to you or your spouse unexpectedly. But you can count on this: without a will and very clear instructions, should you die, or heaven forbid, become incapacitated, your loved ones will be guessing what you really want and most likely disagreeing. Without a will, they may spend thousands of dollars on legal fees and years of agony winding your estate through the courts. Don't do that to your family. The number of homeowners who do not have a property share agreement is probably much higher than 50%. Sure, we have domestic community property laws in New Zealand - but do you really want to go to court at a time when you are at your greatest vulnerability and stress?
Your property share agreement and an up-to-date will are your best security. After that, you can be as romantic as you like.
© 2017 Niche Mortgages Limited, Auckland, New Zealand