Speaker 1: 0:28

Hello and welcome to Polina. Polina, hello from Kapiti Coast. Where are you, Hi Zibonisa?

Speaker 2: 0:35

I'm in Auckland.

Speaker 1: 0:36

Lovely to have you today. So Polina Kozlova, the director at PK Law, is that right? Yes, brilliant, do you want to tell us a little bit about what you do and your firm?

Speaker 2: 0:50

Yes, yeah, so PK Law. I've just started PK Law just over a month ago and I'm a private client lawyer and that's what my firm does. I specialize in relationship, property and all other private client matters, which basically involves things like estate planning, so wills, enduring powers of attorney, establishment and management of trusts, resolution of the disputes in the areas of estates, wills, relationship, property and trusts and all other matters involving what we call elder clients, who often have issues with mental capacity and there's a dispute around that between family members or when they just need assistance with, you know, putting wills in place and require complex assessments whether they actually can enter into a will or any other arrangement. So that's sort of what I do and what my firm does what I do and what my firm does.

Speaker 1: 1:55

That's awesome. So quite a lot to do with relationships and in all sorts of different forms I guess and this is something I deal with in everyday life as clients, when you know they're looking, for instance, blended families, even when they're coming together and they want to buy a house together, or when families fall apart. So you, I guess, on the other side of what I do, in your terms, so who is your ideal client that you would normally deal with? It's a good question.

Speaker 2: 2:24

Yeah, you're right, and you know we've had matters with you so you would know what clients we deal with. Um, ideal clients I mean clients I have range sort of from 20 years old to, you know, 80 year old, um, and they really are from all sorts of different backgrounds. Some of them have very straightforward issues to deal with. You know, they're purchasing a house and they want to put a will together. Or they just had a child and want to put a will to ensure that, if something happens to them, that there is a testamentary guardian appointed for a child.

Speaker 2: 3:04

And sometimes more complex matters where, as you said, blended families, say kids from previous relationships, and people need advice around what is the best way to structure their wealth. And when I say wealth, it doesn't mean you know a lot of wealth, sometimes it's just a house really, and they're trying to work out well how to protect everyone's interest. Basically, you know if, if one of them dies, that the kids from previous relationship protected, the kids from current relationship are protected and to avoid leaving, say, their spouse with a dispute in their hands with kids from previous relationship, which can lead to a lot of expenses and stuff. So yeah, very different backgrounds and a lot of clients, clients they just need to trust, because they just want to trust to own their house, um, you know, for whatever reason sometimes, just because they want to trust.

Speaker 1: 4:02

So very, very different I know sometimes clients come to me and they go like I just want to put it in the trust but they don't really have a real reason why. But I know like for a lot of self-employed clients, for instance, it does make sense to put things in the trust separate to their own company Credit protection yeah et cetera.

Speaker 1: 4:19

Okay, now that's cool In terms of, let's say, we've got a blended family where she's come from a separated background, he's come from a separated background. They want to get together and they've both been burnt, obviously, by whatever happened in their lives and this time around they want to put together um, contracting out agreement where, if their relationship falls apart, whatever they walked in with they get to walk out, um, etc. So what would you recommend to people in that case to put in place to make sure they protect everything they have?

Speaker 2: 4:53

Yeah, usually, I mean, the best way is the contracting out agreement. That is probably the best way you can protect yourself in that situation. There are also trust structures, but they don't fully offer similar protection. So a lot of people will do what you call both having a trust and a contracting out agreement in place. But if they had to choose between the two, it's always a contracting out agreement Because trust can provide certain level of protection if they settled before you get into the new relationship and even then, no 100%. So contracting out agreement is definitely the way to go. The only advice I sometimes give clients who completely refuse to do a contracting out agreement, or the other name to call it a prenup is to then consider trust, because a trust is better than no contracting out agreement and a trust and the reason why some people don't want a contracting out agreement is just the dynamic. Some people think it's a bit uncomfortable to do that and they just yeah, they just don't want to ask their partner to do that.

Speaker 2: 6:11

So, that's when, you know, we'll at least say well, let's at least have a trust in place.

Speaker 1: 6:16

Okay, and at what point in life do people need to put the prenup in place for it to be valid, like they can't be in a relationship for three years and then decide to do a prenup right? At what point? No, you can't you can't.

Speaker 2: 6:30

So it's called. You would call it post-snap, which means you've already been in a qualified relationship, so in a defect, over three years. And when you say three years it's actually been in a defect, so it's not just dating, it's actually living together and having that mutual commitment to join life together. But usually people you know, lawyers, would say it's living together as soon as you start living together. That's when the clock starts for the three-year uh period. And often lawyers would say two years. And it's funny because clients always say oh, isn't it two years? I thought it was two years. That's big. I don't know how, why lawyers started doing that, but I guess, guess it's just we give clients, we say two years instead of three, so they sort of don't wait until the three-year mark.

Speaker 1: 7:19

I thought it was three. It is three.

Speaker 2: 7:22

Okay, yeah, under the law. But a lot of people I would find 50% think it's two years, which isn't good, because they always come to you well ahead, which is great. But yes, you can put it in place after the relationship, after you've been in a relationship for three years or even ten. But what changes is the way lawyers have to work around, that it becomes more expensive and the procedure is a bit different, only because the entitlement has already kicked in. You know, if you haven't got to three years, you don't have an entitlement. So for a lawyer advising on an agreement, it's way more straightforward. The advice you need to give and the disclosure you have to provide is just more straightforward and therefore less expensive.

Speaker 2: 8:15

But when people have been together for a long time, they already have those entitlements. You know, say, if they've been living in a house which is owned by one partner for 10 years, you know the other partner is already entitled to 50%. And if she or he now, he now says, well, I want to give it up, the lawyer needs to be really careful and giving them really good advice around. Well, you, actually, if you walk away from this relationship now, you will have that 50, are you sure, so it's just that. So you can do it at any point in time, but it's just that it's tricky and more expensive and the procedure so a bit more obligations on the lawyers when it comes to having to do an agreement after you've been in a relationship for some time and some lawyers actually, sorry refuse to certify an agreement at that point, if it's really unfair.

Speaker 1: 9:07

Yeah, yeah. So I guess what I'm hearing is, if you can get those contracting out agreements done, do it before the two-year mark, ideally. Yeah, that's right, to make it easier on all parties and less expensive down the track. Yeah, okay, no, that's cool. All right, we've covered the relationship law.

Speaker 1: 9:28

Very sad story happened recently to one of my clients and that made me really question the whole you know industry and the advice that we're providing with our clients. Like he is, um, he was married to a lawyer and his brother runs a law firm and I thought he would be the least person not to have a will and unfortunately he died suddenly. He had a stroke and died and at the age of 44 and um and he had no will, apparently left um and I thought he would have a will right being married to a lawyer brother's a lawyer. Like you think. Um, yeah, those, and and they've got a giant property portfolio as well. So it blew my mind to realize that if a person like him didn't have a will, the amount of people out there that don't have a will is really scary and what can happen. Could you just talk to us a little bit about what happens when you don't have a will and what happens to your estate, so to speak?

Speaker 2: 10:33

Yeah, yeah, yeah, you're right. It's shocking how many people in New Zealand don't have a will and I don't know. I guess it's just a thing you never want to get around to and maybe the cost, but the cost of dying without the will definitely comes as a shock as well to the family. So the difference, so what happens? I probably should start with what happens if you die and you have a will. Essentially, you know, in most cases your lawyer would, the deceased person's lawyer would have a will, or the family will find a will in the house or something like that, and they will then instruct a lawyer to prepare the documents for probate. So there are certain documents that need to be prepared and the executors, which are the people who are appointed to administer the estate by the willmaker, they will have to sign those specific documents which the lawyers then send off to the court. The court checks the will, makes sure it's untempered it looks like a valid will, makes sure it's you know it's untempered, it looks like a valid will and usually within ideal time frame is about four weeks. Sometimes it can take three months, but normally it's four to six weeks. I would say probably a month for lawyers to get the documents ready, signed, and then another six weeks for the court to turn around the application and then the court would send back to the lawyers what's called a probate. So basically, that's a grant that gives authority to the executors to manage the estate, and then the executors would notify the banks, depending on what assets the deceased had right at the time of death. If there's a house right at the time of death. If there's a house, they would transfer the house into the executor's name and then they slowly will start. So basically, they will collect all the assets, they will pay the debts, taxes and then they will hold the assets for a certain period of time before distributing to the people named in the will. There's a certain period you need to wait for any claims.

Speaker 2: 12:43

So there is that when you die without a will, at the beginning the process is similar. You go to a lawyer, you tell them you know, I don't know, my mom died. She had no will. What do I do?

Speaker 2: 12:58

There is again an application that the lawyers would have to prepare and send to the court, but it's way more complicated than the application you have when you have a will, and before you can launch that application you need to take all the steps, one of them being advertised in the Law Society, in the newspapers, to see whether anyone may hold a will, you know, maybe at the law firms or accountant or whoever and you need to wait certain, so say a month, if someone will notify that, yeah, we have a will for that person. Then, if the deceased was a man, you need to do a paternity search, basically a search to ensure he didn't have any kids, other kids that you know, no one knew about, and that's only for males, yeah, so that can take one to two months as well, and obviously you pay for for all those applications. So you have to gather all that before you can even submit the application to the court, and I'd find normally it's yet two months at least, uh, maybe more. And then you draft the application, you send it off to the court, um, and then the lawyers have to work through. Well, who will be the executors? Um, so the administration act applies and it sets out the rules of who are the first in line to be the executors, um, so yeah, and then application gets sent and again, um, four to six weeks, usually even more because there was no will, um, and yeah, and then. So that's that? Um, so that probably at least doubles the cost, not not? Probably it doubles the cost or probably even triples the cost sometimes. And, of course, the implications in terms of who will get your estate. Again, when there is a will, you can leave it to whoever you want, right, so long as you're within the parameters of the law, and in New Zealand the law is quite flexible. There's actually not many rules around who you need to leave your assets to, only those in terms of relationship property law that your spouse is entitled to 50%, and if you had little kids you would need to leave something. But if you had adult kids, there's no specific obligations, except for moral recognition sometimes. But yeah, without the will, again, it's default. So the Law of Administration Act applies and often it's not what people intend to happen.

Speaker 2: 15:33

A lot of people are surprised that by default, your spouse gets the first $155,000. Okay, and that can change. That's the current amount, it can change by the government, and then your spouse would get one-third of whatever else is left and the two-thirds go to the kids, if there are any kids. A lot of people get surprised because of course it depends on the value of the estate. If your estate was quite modest, your spouse might get the most of it, whereas if your estate, say, was quite large, sometimes kids would get way more than the spouse. So a lot of people get surprised. They just didn't know that. They don't even know what the default is and they don't realize. Well, if I die without a will, that's what happens, yeah.

Speaker 1: 16:25

So yeah, and that's the scary bit for me, dealing with clients every day, you know, when they're buying houses and stuff or growing the investment property portfolio I always talk to them about. You know, while you're at your lawyers, make sure you mention getting a will, because that is very important. You know, a little cost today, a little thinking today, will save you a lot of more cost and stress.

Speaker 2: 16:51

Especially if the estate is tiny. I actually had a case where the estate was only 50,000, 50, so 5-0. If it was under 15, which is the current limit in New Zealand if your estate is under 15, you can actually get away without probate. So the bank would release the money to the relatives without any documents, without court documents. But if it's over 15, you need probate.

Speaker 2: 17:15

And I had a case a man died, all he had was 50,000 or 45,000. But we had to get probate to get that money and he didn't have any relatives here. So I ended up being appointed. So that's one of the other things I do, if you know get appointed by the court to administer someone's estate. Sometimes courts appoint professionals to administer estates or say relatives are overseas and it's too difficult and they want a lawyer to be appointed, which was the case um in this specific situation. And yeah, so the relatives basically 10 000. It cost them 10 000 just to get that 50 000 or 45. So you know it's so sad. Yeah, it's just, and if there was a will it would cost them maybe three um yeah, so no, the cost is significant, exactly.

Speaker 1: 18:03

Thank you, so you help people with their wills. Polina, yes, yeah.

Speaker 2: 18:07

Okay, a big part of what I do, yeah, yeah, simple, complex wills range, but yeah. But that's probably one of the most satisfying things. I just love when people put their affairs in order. It's like one of the simplest thing you can do to just save everyone so much trouble yeah, yeah, sure, and with wills.

Speaker 1: 18:28

Um, how often would you recommend people to review them? Because it's not like, um, you know, set and forget type of scenario. Right, it does.

Speaker 2: 18:40

You need to look at it yeah, it does really depend on how complex the will and the way it's drafted. Um, I always try to draft it in a way for clients to save them spending more money in two years. You know, like if they have one child, you don't just say for my kid, you just say you know an equal shares for any, for my, you know, if I have more than one child, an equal shares, just so they don't have to come in two years time and say, oh, now I had a second child, we need to change it. So there are things you can predict can happen and already work through them, through them. Um.

Speaker 2: 19:27

But some people have complex wills or they they like to list every item they want to give to someone. You know sentimentic value, I don't know sentimental value, this painting to that person and or this watch, and things change so they would update. But I find it more with elder clients, that generation they still do that. I guess our generation they more. They don't go into specifics, it's just all my assets to that person, um. And obviously when you separate um, that's the time to change your will. That's very important because people don't realize that in. So if you are married it takes two years to divorce and if you separated, your spouse, who will continue to be a spouse for two years, stands to inherit even if you don't have a will. So you should change the will if you don't want your spouse to inherit your ex. That's the point where you should straight away change the will.

Speaker 1: 20:24

And the other Because you don't want them. Accidentally, you know, do something to you and get the rest.

Speaker 2: 20:31

Yes, that's right. Yeah, and the other um, that gosh was gonna say the other reason is marriage. A lot of people don't know that marriage revokes the will. So if you had a will and you married, it cancels. So you need to do a new will. Basically, wow, yeah, yeah, unless, unless your will stated that it's being made in contemplation of marriage to a particular person. Um, you know, if, for example, I know that I might marry with my partner, my will actually says I've made it contemplating that I might marry that person and that's not going to revoke. Um, so that's why it's always important to tell a lawyer as well. You know, we in relationship with my I might marry that person, so then the lawyer would draft the will taking that into account. Um, so you don't then need to redo it.

Speaker 1: 21:21

So you can't just put a generic thing to say I will marry. Eventually it has to be a specific person that you're going to marry to keep the will alive. So if you marry the new person, basically you need to go and get a new will set up. That's really interesting. I was going to ask you that and I didn't know that that apparently when you separate and you haven't fully divorced yet, that that person can still claim if something happens to you. But what happens after you've divorced and you still haven't updated the will because you forgot what happens then? So two years pass by, you get the official divorce papers in the mail, but the will hasn't been updated and something happens to the person well, if, if you have, like you, you should still update the will if you don't want them to inherit.

Speaker 2: 22:14

Basically, yeah, you still should. Yeah, with de facto relationships or no, marriage is a bit different because, um, as soon as you separate, um, when a person dies and the documents get filed in the court, one of the questions actually is were you separated? If, say, a partner is applying, they have to answer the question were you separated? Was the deceased at the time they died? So the position is a bit different for defective relationship. They don't stand to inherit, it's only married couples.

Speaker 1: 22:50

Okay, okay. Well, that's really interesting to know what happens if one party after the separation one party, updates the will but the other party doesn't, so that person's will still can be paid out to the separation, to the separated person Can be. Yeah, wow, that's crazy, okay. So, guys, guys, if you're listening out there, please update your wills if you've recently separated usually people who at least who have a will in the first place.

Speaker 2: 23:23

They usually remember, I notice it's usually people who don't have a will. They don't even know. Um, but yeah, people who have a will, they usually onto it, yeah yeah, and where would be a good place to keep your will?

Speaker 1: 23:36

once you've done a will, where would you keep it?

Speaker 2: 23:38

somewhere safe or still in new zealand you'll find a lot of lawyers, uh, hold the wills, a lot of law firms. But then at the same time, um, times are changing and a lot of law firms don't want to have storage and it's all electronic. So you know, say my firm policies, we don't hold original wills. So for clients it's just been a safe place, somewhere where you keep all your original documents and somewhere where your family can easily find it, so some sort of safe box where you keep your precious jewelry or something like that. And always a good idea to take a copy. So when I do wills for my clients I would always keep the copy. They keep the original because, um, with the court you can probate a copy. So if the original will gets lost, um, it's not the end of the world. So once you have a copy, oh good.

Speaker 1: 24:30

Okay, that's really good to know, Paulina. Thank you so much. I think we've covered so much in here and in terms of your own company, what are your goals? Where are you heading? Because you've been a lawyer for quite some time now I believe over 10, 15 years you've been practicing.

Speaker 2: 24:48

It's been 2016, so eight, nine years oh eight, nine, okay, yeah, look, it's always been a goal of mine to have my own firm. Since I've started law, two years into law school or three, I think I've realized that what I wanted to do is private client law. I really enjoy working. I think the law I do is private client law. I really enjoy working. I think the law I do is more personal and you know you tend to find a lot about people's lives and obviously, with relationship, property, separation, you tend to find a lot about people's life and sometimes you're a psychologist and a life coach as opposed to a lawyer, especially when people go through separations. But I really do enjoy having that personal approach with clients when I'm heading next. So, yeah, I've just established the firm.

Speaker 2: 25:42

I'm doing the same thing I've been doing for the last eight years, which is obviously working with clients, but on top of that, there's all the other things that I need to do now as business owner. Looking, I guess there are many areas of law that I don't cover and I work with other practitioners on them, such as property lawyers, which a lot of my work leads to property stuff. You know people establish a trust, they buy the property and a lot of children matters as well, which I don't do, like bad situations, like child protection, you know, or protection orders and things like that. So potentially looking into expanding in the next year, but at this time just enjoying the year being my own employer, I guess, your own boss, your own boss, your own boss, yeah, and just taking it one step at a time, because there's a lot of things too, there's a lot of regulations and just a lot on my plate, but I'm really enjoying it.

Speaker 2: 26:47

It's nice to be able to serve the clients in a way that I want to serve them and I do really like having that modern approach and simplify the law as much as possible. Simplify the law, provide the clients with clear understanding of what needs to be done and the cost involved and, you know, just helping them to make their life easier.

Speaker 1: 27:08

So yeah, no, that's fantastic, polina. Thank you so, so much for coming today. And as a closing remark, what's your motto in life? What do you live by?

Speaker 2: 27:19

Oh, I should have prepared for that one, your favorite one, you don't have to tell me that one just your favorite one.

Speaker 2: 27:25

Well, one of them, maybe. I always used to say sort of say, sort of um, you know one thing, down onto the next one, um, I'm, I'm really, I like to tick boxes and I don't like to stay still. I always am looking for that next challenge. So maybe that's one of those ones. Yeah, down onto the next one, um. And the next one I'll be in is, you know, growing my own firm? Yeah, for now.

Speaker 1: 27:52

That's awesome, polina. Thank you so so much. Absolute pleasure to have you and share this really tough information that normally you know people don't really talk about but needs to be spoken, and I would love to have you back and we can dwell further into aged care and dementia and what happens. You know when that gets involved as well with the whole wills and property law et cetera. So I would really love to pick your brains on that one. Just giving you a heads up that you're going to be back, I hope you're going to be back. Thank you for inviting me. I'd love to Thank you and wishing you all the best.