What Is Estate Planning and Who Needs It in Singapore?

 

If you are a working Singaporean adult but not someone of advanced age, chances are, you’ve never really thought about writing your last will and testament or setting up a trust for your children. Chances are, you’ve never really thought about any element of estate planning at all, believing that it’s far too early in your life to be thinking about your own mortality. You might even be forgiven to believe that estate plans are only the domain of the wealthy and the powerful. After all, rich families tend to have a lot more at stake when it comes to the breadth and value of the estates that they leave behind at death.

 

However, all of these couldn’t be further from the truth. Estate planning is not just for the rich, and it’s certainly never too early to think about what will happen to your money and properties after your death. In this brief article, we’ll discuss some of these points further while attempting to answer some of the most basic questions one might have about estate planning with Avenue South Residence.

 

What Is an Estate Plan?

 

Simply put, an estate plan is a comprehensive collection of strategies that determines how your money and properties will be distributed after your death. It is carried out by making legal arrangements like writing a will, which lets you decide who gets what when you pass on, as well as setting up a trust, which lets you appoint a trustee who can take ownership of your assets so that they can be managed in a way that best suits the interests of your beneficiaries.

 

An estate plan can also determine who will be legally acting on your behalf should you lose mental capacity while you are still alive. This is done through the drawing up of a legal document known as a lasting power of attorney, which lets you appoint a person you trust who can act and make decisions for you. As the name of the document suggests, the individual will be legally acting as your attorney.

 

Your estate is the collective sum of all of your investments, assets, and interests. If you’re from Singapore, however, it is important to note that your CPF savings—including balances that you may leave behind in your Ordinary, Medisave, and Special/Retirement accounts—are not considered part of your estate and are thus not covered by a will. This makes creating a CPF nomination an important part of planning for your death as well.

 

A CPF nomination will allow you to ensure that your CPF savings are distributed according to your wishes. If you don’t draw up one, the state may decide what to do with your savings according to the rules of the Intestate Succession Act of Singapore.

 

Who Needs an Estate Plan in Singapore?

 

If any one of the descriptions below are applicable to you, then it’s safe to say that you do need an estate plan in Singapore:

 

Anyone Who Has Assets

As previously mentioned, estate planning is not only for the rich. As long as you have savings, investments, an HDB flat, or some other assets that you will one day leave behind, you need to plan ahead for how you want them to be distributed. These assets will become your “estate” after death, and they need to be disposed of legally, whether by virtue of the estate plan you’ve drawn or through the power of the state.

 

Anyone Who Wants Their Assets to Be Distributed in a Specific Manner

 

If it makes your blood boil to even just think that your assets may be handed down to relatives you hate, then you’ll certainly want to draw up a will or a trust. If you don’t have one, a judge will appoint someone to handle your estate and affairs, and your assets will be disposed of according to the intestacy laws of Singapore. There is a possibility that your money and properties will not be distributed according to your wishes.

 

Anyone Who Wants to Continue Caring for Their Loved Ones Even after Death

 

More than the practical need to dispose of your wealth after your death and your desire to make sure that your estate will be distributed according to your wishes, perhaps the most important aspect of estate planning is that fact that you’ll be able to take care of your loved ones and provide for their needs even after you pass away. Whether it’s through the writing of a will or through the appointment of a trustee, an estate plan gives you control over your estate to ensure that they will benefit your heirs.

 

If you’re worried about your heirs having to pay the estate tax Singapore citizens used to pay, you can rest assured knowing that in Singapore, there is no longer any estate duty payable for deaths on and after 15 February 2008.

 

 

It may seem surreal to be thinking about death when you’re young and healthy, but ironically, the only thing certain in the world is uncertainty. You can never really tell if you’ll continue to live to a ripe old age or if you’ll meet an untimely end when you’re still at the prime of your life. And even if you do live a long life, you still have to make peace with the fact that you will one day pass away. In any case, proper estate planning will certainly take a load off your mind because you know that your estate will be safe in the hands of people who are most important to you.