Es­tate plan­ning means your loved ones can be well cared for.

Simply Her (Singapore) - - Contents -

N o one likes to talk about death and ill­ness, but th­ese can oc­cur sud­denly. With es­tate plan­ning, you can en­sure your loved ones’ fi­nan­cial se­cu­rity af­ter you’ve passed on. Also, if you’re no longer able to make de­ci­sions be­cause of ill­ness or in­ca­pac­ity, you can make sure that your needs are taken care of and your wishes, hon­oured.

“My hus­band was sick for a year be­fore he died, and it was ex­tremely stress­ful for us to think about es­tate plan­ning while he was un­der­go­ing dif­fi­cult med­i­cal treat­ments and I was car­ing for him,” says Win­nie Chan, 58, whose hus­band passed away from can­cer ear­lier this year.

Justin Ling, a fi­nan­cial con­sul­tant with Pru­den­tial As­sur­ance Com­pany Sin­ga­pore, says: “It’s best to get in­volved in es­tate plan­ning with your spouse, so both of you are on the same page and un­der­stand the in­tent be­hind ev­ery de­ci­sion.”

Each per­son has dif­fer­ent needs, but th­ese are the main ar­eas you should con­sider:

Cre­ate a Will

It’s the sim­plest form of es­tate plan­ning – you can pick your ex­ecu­tor (the per­son who will ad­min­is­ter and dis­trib­ute your as­sets), de­cide what to leave to whom, and ap­point some­one to look af­ter your chil­dren in case some­thing hap­pens to you and your spouse.

If you die with­out a will, then the In­tes­tate Suc­ces­sion Act – a sort of de­fault will – kicks in. But it isn’t fool­proof and may lead to un­de­sir­able sit­u­a­tions, like fam­ily con­flict.

“With­out a will, your prop­erty, as­sets and cash can be in­her­ited by a ben­e­fi­ciary you may not in­tend to give them to. For ex­am­ple, if you are sep­a­rated from your hus­band and you pass on with­out a will, half will go to him and half to your chil­dren,” says Bernard Doray, di­rec­tor of Bernard & Rada Law Corp. “If you also have el­derly par­ents who need fi­nan­cial sup­port for med­i­cal ex­penses, they may be left des­ti­tute if you haven’t made ad­e­quate pro­vi­sion for them.”

Re­mem­ber to up­date your will as you be­gin dif­fer­ent stages in your life. The will that you made be­fore you got mar­ried is no longer rel­e­vant if you now have three chil­dren in need of care. Take note that a new mar­riage will revoke your ex­ist­ing will, so if you don’t cre­ate a new will af­ter re­mar­ry­ing, the In­tes­tate Suc­ces­sion Act will ap­ply if you pass on.

“Once you have done your es­tate plan­ning, do not leave it on au­topi­lot mode. Mon­i­tor and re­view your plans at least once ev­ery two years to take care of your chang­ing cir­cum­stances,” ad­vises Anne Tay, se­nior man­ager from Pres­tige Raf­fles Group rep­re­sent­ing Man­ulife Sin­ga­pore.

Mak­ing a will is es­pe­cially im­por­tant if you have chil­dren be­low the age of 18 – it’s the best way to trans­fer guardian­ship of them in case you and your hubby pass on to­gether. If there is no will, the court will try to ap­point some­one like the most suit­able next of kin to be the guardian. How­ever, there are cases where the High Court or Fam­ily Court can ap­point it­self to be the guardian.

You should also name trustees who will man­age your chil­dren’s share of your es­tate – they can be the same peo­ple you ap­point as guardians. Legally speak­ing, a child un­der 18 years old is con­sid­ered a mi­nor, so a guardian must be ap­pointed. But if you have spe­cial con­sid­er­a­tions as to when you want to dis­burse the monies to your child af­ter the age of 18, you must consult a lawyer to have that pro­vi­sioned for in the will.

Check Your Insurance Ben­e­fi­cia­ries

Life insurance poli­cies are par­tic­u­larly im­por­tant when you have more debts than as­sets. Your loved ones can use the pay­out from the poli­cies for their daily needs and other ur­gent ex­penses.

By law, cred­i­tors have first rights to your es­tate. How­ever, with life insurance poli­cies, you can cir­cum­vent this by nom­i­nat­ing your spouse and chil­dren as ben­e­fi­cia­ries of an ir­rev­o­ca­ble trust – which guar­an­tees that the pro­ceeds from the insurance poli­cies will go to your ben­e­fi­cia­ries. Cred­i­tors will not be able to lay claim to them.

“An insurance pol­icy is an im­por­tant ve­hi­cle to con­sider when do­ing es­tate plan­ning be­cause it helps to pro­vide the nec­es­sary liq­uid­ity as quickly as pos­si­ble to your loved ones,” says Anne.

Insurance claims are usu­ally paid out within seven work­ing days. This is help­ful be­cause when a per­son dies, all his as­sets will be frozen

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