7 Key Tools For Successful Estate Planning In Singapore

Estate Planning refers to a holistic experience that involves the creation of an estate plan which is a collection of legal documents providing clear instructions on how you want your various assets such as money, property, businesses, etc. Preserved, managed and distributed after you pass away.

Singapore’s advanced economy has exempted estate duties or “inheritance tax” for people dying on and after 15 February 2008. One, therefore, need not worry and plan their estate to limit the number of payable duties. Estate planning in Singapore needs to be carried out strategically with the help of critical estate planning tools. In this article, we will discover the seven critical tools for successful estate planning in Singapore.

  • Wills And Testamentary Trusts

A Will represents instructions on how an individual’s estate should be distributed after their death. It enables the efficient distribution of all your assets and management of your estate.

One of the most significant benefits it offers is the reduction in delays in transferring your assets. A will is a legal document that allows you to:

a.Identify All Your Assets

b.Select Your Beneficiaries

c.Select Your Executors Or Trustees

d.Mentions Whether A Trust Should Be Created Or Not

The Will not only helps prevent any misinterpretations but also reduces your family’s stress during difficult times.

  • Central Provident Fund Nomination (CPF)

Remember, CPF does not form a part of the deceased’s estate and cannot be distributed via a will or trust. Only the person whom you nominate to receive your CPF fund will receive all your CPF monies. To make a CPF nomination, you have to fill out the CPF nomination form and submit it online or in person at any CPF Service Centre. There are critical decisions to make when making a CPF nomination:

  1. The individual who shall receive your CPF
  2. In what proportion
  3. How will your beneficiaries receive the funds

Ensure to review your CPF nominees regularly, and you can update your CPF nominees at any time.

  • Life Insurance Policies

Life insurance policies act as a financial safety net that protects your loved ones from financial instabilities. A person takes out these policies on his own life for the benefit of his nominees. An individual can opt to make an irrevocable (trust) nomination or a revocable nomination.

  • Lasting Power Of Attorney (LPA)

An LPA is an instrument that allows you (the donor) to appoint and authorise another person (the donee) to make various personal welfare and property welfare decisions at a time when the donor loses mental capacity.

With the help of an LPA, you can protect your estate from being squandered away by irresponsible caregivers in case you suffer from mental incapacities in the future. Further, LPA prevents unnecessary and lengthy court proceedings that families have to control accounts and assets.

  • Inter Vivos Trust

Inter Vivos Trust or beneficiary designations refers to an instrument or trust created by individuals in their lifetime ( the settlor) for the benefit of the other (the beneficiary). The unique places all his estate under the trust, appointing a trustee who manages the trust property for the beneficiary. You can set up a trust for leaving assets in a will to children who are below the age of 21 years until they reach maturity and claim the inheritance for themselves.

  • Manner Of Holding Immovable Property

An immovable real estate asset such as your house can be distributed in two ways: tenancies in common and joint tenancies. A tenancy in common is when each property owner has a severed share or part of the property. Joint tenancy is where co-owners of property each own 100% of the property.

The law states that the parties registered co-tenants of a property are considered joint tenants if it is not specified whether they hold properties as joint tenants or tenants- in -common. It is, therefore, crucial to consider whether you want your property to be held as a joint tenant or tenant-in-common. Converting immovable properties from joint to tenant-in-common and vice versa is also possible.

  • Advanced Medical Directives (AMD)

AMD represents a legal document that you sign in advance for informing your doctor that you do not wish to undergo any extraordinary life-sustaining treatments to prolong your life, in the vent of a terminal illness or incurable of exercising rational judgement.

Individuals above the age of 21 can make an AMD signed by two witnesses, one of whom must be the individual’s doctor. An AMD frees your family and loved ones from the burden of making a decision that could result in immense guilt and incurring financial obligations from life preservation treatments.

Estate Planning Singapore: Lighthouse Legacy Planners

Estate planning can be an overwhelming and daunting task, so you must carry it out under professional guidance.

LightHouse Legacy Planners are proud to be known as one of Singapore’s leading estate planning consultants today. Our consultants assist and guide you and focus on providing a holistic estate planning experience that involves the succession of your assets and your values and traditions to your future generations.