Create a Living Will
pending a grant of probate (legal certification of the validity of a will). Your beneficiaries need to provide the necessary identification to the insurance company, the death certificate and other documents to claim the money.
Make sure you complete a nomination form for your insurance policy. This allows you to indicate your beneficiaries and how much each will receive upon your death. If you do not make a nomination for your insurance policy, the proceeds will be distributed according to your will. A living will or Advanced Medical Directive (AMD) states your decision regarding medical care, in case you get struck with a terminal illness or mental incapacity or become unable to communicate. “For example, when you are put on life support and death is imminent, with the AMD signed, the doctor is able to take you off life support because you made that decision earlier on,” says Anne.
It is good to let your loved ones know that an AMD has been signed, to avoid potential conflicts over who can turn off your life support. Medical costs can be incurred for a long time, which may drain family finances.
Make a Lasting Power of Attorney
A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more persons to act and make decisions on your behalf – in matters of finances and daily welfare – should you lose mental capacity because of old age, dementia, Alzheimer’s disease, illness or an accident.
“If you do not have an LPA, your family must apply to the court for authority to make decisions on your behalf – a time-consuming and costly process,” says Stephen Chew, principal consultant with Summit Planners.
You can get an LPA form from the Office of the Public Guardian (toll-free hotline: 1800-226-6222) or download it from www.publicguardian.gov.sg.
Get Professional Help
To make estate planning easier, work with a financial planner who specialises in estate matters, as well as a lawyer. The financial planner can help you to determine how much is needed to provide for your loved ones, and draw up a comprehensive financial plan. Lawyers can draw up your will and help you with your LPA.
“Speak to someone who is knowledgeable and puts you and your family’s interest first. You must be comfortable with this person because it’s likely to be a long-term relationship,” says Anne.
Here are other issues you should consider beforehand.
HOW BIG IS YOUR ESTATE? List all your assets and gather all your documents – including properties, investment portfolios and insurance policies – to determine your net worth.
Also think about whether there are fixed assets that you want to liquidate, or unique properties like art or antiques that you want to give to specific beneficiaries. You probably won’t want to liquidate an item of sentimental value. You can state in your will that you want the item to be given to a specific person.
Be meticulous so you won’t miss anything that may become a point of contention later. You should also tell someone whom you trust where all your legal documents are kept.
TALK TO YOUR TRUSTEES AND GUARDIANS. If your children are minors, you need to identify guardians and trustees in the event that both you and your spouse die at the same time. You should name at least two guardians and two trustees to ensure accountability – and in case one of them passes away as well.
The guardian takes care of the welfare of the child, while the trustee holds and manages property for the benefit of the child.
“When approaching prospective guardians, it’s important to respect their wishes since it’s a long-term commitment. One should understand that it is a privilege and not a right that someone, even family members, should agree. This is to avoid future problems like neglect, abuse or resentment,” says Daniel Koh, a psychologist with Insights Mind Centre.
The prospective guardian should spend time bonding with your kids. This can help to decrease emotional distress if the time ever comes for the guardian to take charge of the child, and will help the child cope better in the future. If you have already decided on the guardians, whether you tell your kids about it beforehand depends on how comfortable you are with discussing it, adds Daniel.