The Importance of Writing a Will
If you’re like most Singaporeans who thought writing a will is just about leaving your assets to your loved ones, you are wrong. Many people do not know the real benefits of this simple process that offer them and their family.
Most adults own something. Whether it is a house, a vehicle, and valuable pieces of jewellery, a secret cash stash and even your pets. You don’t want the state to decide where your assets go when you pass on or, more importantly, who will be in charge of your children and funds owed to them. Then, it is recommended that you draw up a will.
There are two common misconceptions about writing a will. The first and most common one is that you have to be rich to make a will.
No sum is too small to make a will. If you’ve got a family, a home, insurance policies or even personal savings account – you should definitely make one. Cost is no excuse. Having a will is a responsibility you owe to your family and yourself. We believe in the wise saying: – “Your will is a great way to love your family with the last thing they read from you”.
The second misconception is that a lawyer is needed to write a will. Although it is not recommended, as one might make mistakes in doing, it is possible to make your will by yourself with necessary witnesses and sufficient information.
If you are still not convinced, here are five essential reasons why you should make a will.
1. So that you can decide how your assets are distributed.
A will is a legal document that sets out what will happen to a person’s estate when he or she dies. You can state how your property should be divided, determine who will receive your heirlooms, provide for your loved ones and donate part of your assets to your favourite charity. A will allows you to determine exactly how your assets will be disposed of after your death.
If you do not have a will, your assets will be distributed under the Intestate Succession Act, following a specific set of rules.
2. By making a will, you can protect your children.
Making a will allows you to protect your children, as you will decide who you would prefer to be the guardian of your minor children upon your death. You can also designate a guardian or trustee to manage your money for your children until they reach adulthood. If you and your partner both die without a will, the state courts and social services will appoint someone to raise your children. This may not be the person you had in mind.
3. Reduce financial difficulties and emotional stress on your family.
Another, often forgotten reason to have a will is to ensure no tension occurs within your family after you are gone. It is often challenging for a family to plan the disposal of wealth and personal belongings of a deceased relative. By making a will which clearly specifies these, you can make a difficult time of transition a little bit easier for your family.
You can also appoint an executor and trustee in your will. The executor can be a friend, a relative, or a lawyer that you trust to follow your wishes exactly. He/she will help handle the administration of your estates, such as paying off your bills and debts, handling funeral expenses, notifying banks and insurance companies.
4. Eliminate potential disputes among your family members.
Are you reminded of those nasty family dramas that happen after an elderly passed on in those (Taiwan) TV series? Yes, that could definitely happen in real life when you do not have a will that specifies who should inherit your money, real estate or personal belongings. Without a will, you may have relatives arguing over your possessions, and everyone may want input on what should happen to your assets.
5. Reduce inconvenience and burden.
Very often, if you do not have a will or mentioned drafting a will for your friends or family, it could create inconvenience and burden for your family. The process for the Court to appoint your personal representative to transfer your asset will take longer and cost more (aka Grant of Probate/Grant of Letter of Administration). This is because more evidence, documents and time are required to prove probate and obtain the Grant of Letter of Administration.
By having a will and keeping it with your lawyer, you can make a difficult time of transition a little bit easier for your family. Even if you are no longer there, they know that you have thought of them and their welfare.
Now, let’s talk about things you can’t give away under a will.
1. Central Provident Fund (“CPF”) Money
Your CPF savings can’t be distributed through your will as they do not form part of your estate and are protected from creditor claims on any outstanding debts.
The only way to distribute your savings through your will is to do a CPF nomination.
When you do not make a CPF nomination, your CPF savings will be transferred to the Public Trustee’s Office (PTO) for distribution to your family members under the Intestate Succession Act or the Inheritance Certificate (for Muslims).
What does CPF Nomination cover?
- Savings in the Ordinary, Special, Medisave and Retirement Accounts;
- Insurance money from the Dependent.
2. Any Trusts, retirement plans, or insurance policies that clearly state a beneficiary
These policies are termed “irrevocable” as the nomination cannot be revoked, even by the person who bought the policy. The appointment can only be revoked with all nominees’ consent.
3. Joint-owned properties
In Singapore law, real-estate properties that are held as joint tenants will pass onto the surviving joint-owners automatically upon the death of the other joint-owner.
This is commonly known as the right of survivorship. Due to this right, interest in immovable properties held in joint tenancies do not form part of a deceased’s estate and cannot be distributed under a will.
How long does writing a will typically take?
Making a Will is often believed to be a long, complicated and expensive process by our parents’ generation especially. However, that has changed with today’s advanced technology, drafting a will now is a speedy process that can be done online and this usually takes a few hours or longer, depending on how comfortable and informed you are with regards to drafting a will.
If you engage a lawyer in preparing your will, the process should take approximately 1 to 2 weeks from the time you furnish your lawyer with instructions.
For assistance with estate planning matters, please contact us to make an appointment.
See our next article on Grant of Probate.