It’s only normal that people are more focused on the wonders and worries of your regular daily life to focus on what happens to you (and your assets) once you pass on. Preparing for your eventual passing – and writing a will – can be a daunting and uneasy task for many.
In Singapore, when you pass away without a will, your estate and assets will be distributed according to the Intestate Succession Act. When this happens, the law dictates who gets what – in a way that you may or may not have wanted.
Without a will, your estate will be distributed according to the Intestate Succession Act
Without a valid will, a person is said to have died “intestate”. This doesn’t mean that your assets will not be distributed, but as mentioned above, a lot of things are decided by the state.
If you pass on without a will, your surviving spouse gets everything in the absence of children or parents. If you have children, your surviving spouse is entitled to one-half of the estate and remaining half is divided equally amongst children. There are other permutations, and these are all listed in the Intestate Succession Act. The only exception to this rule is if you belong to the Muslim faith, for which you’ll have to go through the Faraid process.
Beyond this, family members may also face delays in settlements, as the probate process is not as straightforward compared to the process when someone passes away with a will. Delays usually also mean higher legal costs and when your beneficiaries eventually receive your estate, a lot of it may be used to clear outstanding liabilities.
In short: if you pass on without a will, your assets may not be distributed according to your wishes, and it may be a longer-drawn and more expensive affair.
If you prefer to distribute your assets differently to the Intestate Succession Act and avoid causing potential disagreements and stress among family members, leaving behind a will helps.
Take note of what is not covered by a will
In your will, you can include the names of your beneficiaries, and how and what they will receive after your death. Typically, you should also include the name of the person/party to execute your will.
If you are keen on making a will, there are several things that you will need to provide instructions for. You may wish to draft a will on your own will or have a lawyer do it for you. For a will to be valid, you must be of sound mind and be at least 21 years of age, have the will handwritten or printed out and signed, and the will must have at least two witnesses (who must also sign).
Once your will is written and signed, find a safe place to store it – a safe box at home or a wills registry should suffice.
Without a will, your assets will be frozen, and it’ll take some time for your next of kin to organise the Letter of Administration and may have to face the burden of debts in the meantime. This is why writing a will is important to ensure peace of mind and ease of process for loved ones you leave behind.
Make your CPF nomination as funds are not covered by a will
If you have purchased any properties using your CPF monies, have any payout and investments – these can be a part of your will. However, CPF funds are not covered in a will as they do not form part of a person’s estate.
To ensure that your loved ones get your funds, a CPF nomination is an option to specify the people who should receive your CPF monies and in what amount upon your demise. The CPF nomination will cover your monies in your Ordinary, Special, Medisave and Retirement Accounts, and any unused premiums in CPF LIFE that you have.
If a nomination is not made, according to the CPF website, your CPF will then automatically transfer to the Public Trustee. Your CPF monies will then be distributed in cash according to the Intestate Succession Act (or the Inheritance Certification for Muslims).
Without a nomination, the process to get the CPF cash takes longer. A surviving family member needs to make an online application, attach various documents and then submit it to the Public Trustees. There will also be a small percentage charged for dealing with CPF money (depending on the amount of CPF money involved).
Make nominations for your life insurance policy
Another important nomination that people often forget about is one for their insurance policies. A life insurance policy pays out an agreed sum of money upon your permanent disability or death. This payout is often given to your dependents to take care of their financial needs in your absence.
If you’re wondering why you can’t just add a beneficiary for your insurance plan in your will, you can. But there are pros and cons. Firstly, with an appointed nominee, the insurance company can proceed to issue the payout as soon as they are informed of your death. This makes the process more seamless and fuss-free if there are no arguments about a will or no will in place.
If you do have a will, it does not override the nomination. The insurance company will carry out to pay the nominee as stated in the insurance policy, regardless of what is stated in the will. You may include the insurance policy as part of your Schedule of Assets so your beneficiaries are aware of these funds.
If you do not have a will, the insurance proceeds will be part of your estate and distributed according to the Intestate Succession Act.
Inform your beneficiaries and brief them on how to manage what you’ve left behind
Don’t give your beneficiaries a rude shock or an overwhelming feeling upon your passing. As soon as your will is drafted, inform them of their legal obligations – especially if they are the executors of your will – and your wishes.
You have worked hard for your legacy and you don’t want your estate to be squandered. Make your executors understand your instructions.
Your executor(s) will also have to obtain all the documents needed to apply for the Grant of Probate. In order for them to be able to access this, prepare a file with all your schedule of assets, any oaths, wishes, etc, and instruct them on how they can get a true copy of your Death Certificate for the application process.
If you wish to appoint a lawyer to assist them, provide them with details of any advisor(s) they can reach out for support and guidance prior to your demise. Don’t forget to provide them with the contact details of all the beneficiaries so it’s easier for them to reach out to and execute your will according to your wishes.
Keep a detailed log of your assets and how to access them
As mentioned above, a Schedule of Assets is an important document that is needed for your executor. As part of the will, have a list of your assets and debts for the convenience of the person executing your will when you die.
The Schedule of Assets can include assets under your name or joint with someone else, future assets, debts, mortgages and any business dealings you have that fall under your name. Some examples of assets include tangible ones such as cash, properties, investments, and businesses, or intangible assets such as contracts, copyrights or brand names.
In your will, you can only include wishes for assets that you own. For joint assets or assets held in trust (not under your name nor does it belong to you), you will have to come up with another agreement to ensure that your share is distributed accordingly with the consensus of the asset owner or co-owner.
For example, if you are a co-owner of a property under a joint tenancy, the surviving joint tenant will inherit your share of the property. You are not able to gift your share to someone else in your will. However, if it’s part of a tenancy-in-common, you are able to include your share of the property in the will and distribute according to your wishes.
If you own overseas properties, a will written in Singapore can include this, but you also need to ensure that the will is recognised by the court in the country your property is located in.
Your will helps loved ones understand your wishes for your assets left behind
If you’re ready to write a will to ensure that you leave your legacy in the safe hands of your loved ones, you can either choose to write one yourself or hire an expert. Either way, ensure that your will lists out everything you own and wish to distribute, is signed and stored properly, and is made aware to your executor.
The information in this article is not intended to be and does not constitute financial advice, investment advice, trading advice or recommendation of any sort offered or endorsed by Autumn.