Take note of all your assets
Check and make a register of all the assets you own. It can include your investments, Central Provision Fund (CPF) savings, insurance policies, bank accounts, and anything that can be of value.
Always make sure to update the register regularly.
For many Singaporean citizens, their CPF savings are a vital asset. But the CPF funds cannot be covered in a will. Hence it would be best if you create a different nomination with the CPF board.
Write a Will
Remember to write a will where you include all your important decisions. It is a legally binding document that will clarify and prevent needless delays in the transfer of your assets.
If you do not have a will, Singapore’s intestacy laws will decide who gets what. You must include some key decisions when writing a will, like:
- Who to pass on your assets to;
- What sort of instructions you want to convey;
- Whom you appoint as the executor or trustee
Make an Estate Plan
For every person, whether wealthy or poor, we can never escape death and departure, but we can at least ensure that the people who matter to us do not face unnecessary troubles after our passing.
Therefore, you need to make an estate plan to set up legal management of the assets that you own and pass it down to your beneficiaries. This will help you to be secure that your loved ones will have aid, even without your presence.
Things to Take Note Of When Estate Planning
There are plenty of ways to prepare your assets, and the following are some of the most common ways you can start planning your own estate:
Your Will
Start by preparing a will or testament which gives clear instructions about your estate and to whom it will go to.
While drafting your will, always remember to identify what assets you have, who will be your beneficiary/beneficiaries, and pick a good executor or trustee if required.
The executor/trustee should be 21 years old minimum when the will is taken into effect.
Writing a will would be your best option because if you don’t, the intestate succession act will cover your assets and distribute them according to its rules.
Your CPF Nomination
Next, you must be aware of the Central Provision Fund (CPF), the compulsory savings for social security. This fund has many contributions from many employers/employees.
Although this is not considered part of your personal estate, such accounts contain trusts awarded to whoever is kept as the nominee.
You can also change your nominee/nominees if required by signing a Central Provident Fund Nomination Form (CPFNF).
Your Real Estate
In matters concerning real estate, there are mainly two ways to hold interest.
One is tenancy-in-common, where the owners of property own different portions of it. Thus, each owner can do what they wish with their share, and they can also give it in a will.
The other way is joint tenancy, where all the owners own the entire property jointly.
In such a case, these properties cannot be given in a will because once an owner dies, the other owner gets complete ownership of the property.
This is due to the right of survivorship, where the share of the deceased is withdrawn from the joint ownership of a property.
Thus, while planning for an estate, it is crucial to think over whether you want your real estate property to be a joint tenancy or tenancy-in-common.
We can also change from a tenancy-in-common to a joint tenancy and vice versa.
Your Insurance Policies
Another important aspect is having a good life insurance policy. These are considered irrevocable policies because it is tough to remove the chosen nominees.
Such policies are not considered as part of your estate because it is more of a trust benefit. By having well-planned life insurance, people have the security of insuring benefits to their family/nominees even after they pass away.
Lasting Power of Attorney
For Singaporeans, a Lasting Power of Attorney (LPA) is close to mandatory due to the rise of mental illnesses like dementia.
Through the filing of a Lasting Power Attorney, we as the ‘donor’ can appoint a ‘donee’ (maximum of two) who will gain the power to manage our welfare and/or estate and properties if we (the ‘donor’) become mentally incapable or lose sanity.
This instrument is a legally safe way to secure our aspects to the people we trust.
Advance Medical Directive
There is also the option of taking up an Advance Medical Directive (AMD), which will allow your doctor to refrain from any extreme life-sustaining treatment that can make your life longer.
This is a step taken voluntarily by a person to ensure that if he/she becomes mentally incapable or faces a terminal illness that renders them unconscious, the doctor will be informed to avoid extra life-sustaining aid.
People who have attained the minimum age of 21 years and are mentally stable are eligible to make this directive under the witness of his/her doctor and another person.
Inter Vivos Trusts
The creation of Inter Vivos trusts is also another useful way to make sure that your property is safely managed and utilised by your beneficiary according to your instructions.
In such cases, the settlor appoints a ‘trustee’ who will then manage the property included in the ‘trust.’ This instrument is ideal for those who have nominees younger than 21 years of age.
It is usually in the form of a written and signed deed, which the Inland Revenue Authority of Singapore (IRAS) will collect and stamp for $10.
