The Ultimate Estate Planning Checklist for Singaporeans
Have you ever considered what will happen to your assets and loved ones after you’re gone?
Estate planning is a necessary process that everyone should go through. It can be easy to put off, but you really should have a plan in place should something happen to you. Early estate planning will help save your loved ones a lot of heartache and stress later.
This article will guide you through the step-by-step creation of an estate plan that meets your specific needs. Following our comprehensive checklist, you’ll be able to protect your assets, make sure they are distributed correctly, and make informed decisions about your medical and financial matters.
Table of Contents
1. Introduction to Estate Planning
- Everyone, no matter their age or wealth, needs to plan their estate.
- It means making important choices about your assets and making sure they are distributed correctly after you die.
- Making an estate plan gives you control over what happens to your property and makes sure that your assets are given to your loved ones the way you want them to be.
- Estate planning lets you take care of important things like choosing guardians for minor children, stating your medical care wishes, and setting up a lasting power of attorney.
- One of the best things about planning your estate is that it gives you peace of mind. Knowing that your assets will be protected and distributed as intended can help you relax and reduce potential conflicts among family members.
- Planning can minimize tax obligations and ensure your loved ones are financially secure.
Let’s begin this journey towards a well-structured and comprehensive estate plan that will give you and your loved ones peace of mind for the future.
2. Will
This is the most essential estate planning document because it ensures your wishes are carried out and your loved ones are provided for.
Without a Will, the law will distribute your assets, which may not be your wish.
Without a Will, your loved ones may have to go to court to resolve disputes over your assets, which is expensive and time-consuming.
You should really take the time to make a Will that correctly reflects your wishes. Many draft their own Wills.
You can do it without a lawyer, but it is recommended that you work with an experienced lawyer.
A lawyer will make sure that your Will is properly drafted and will protect you and your beneficiaries from legal conflicts.
The following are some important factors to think about while drafting your Will.
Appointing Guardians for Minor Children
Selecting a carer for your children in the event of your passing is one of the most important things you’ll do in your Will.
It’s important to find someone who shares your ideals and who you can trust to raise your child with love and responsibility.
Distributing Assets
Your Will lets you specify how your assets should be distributed among your beneficiaries.
You give specific items or different percentages to people, charities, or organizations. Make sure that your instructions are clear to avoid potential disputes.
Naming an Executor
An executor is responsible for handling your estate’s administration after you pass away.
This individual should be trustworthy and capable of managing the legal and financial tasks of settling your affairs.
It’s essential to consult with an estate planning lawyer to ensure your Will complies with legal requirements and covers all necessary aspects. They can guide you through the process and help draft a Will that accurately reflects your wishes.
Remember to review and update your Will on a regular basis, especially following big life events or financial changes. In that way, you can have peace of mind knowing that your ultimate wishes will be followed and that your loved ones will be cared for in accordance with your instructions.
3. Lasting Power of Attorney (LPA)
- A Lasting Power of Attorney (LPA) is a legal document that lets a trusted friend or family member make decisions for you if you become unable to do so.
- Individuals who lose mental capacity are unable to make independent judgements and must rely on others. This circumstance may be difficult for both the individual and their loved ones.
- Without a LPA, your family must file a court petition to gain access to and control of your assets and finances. However, the court application process can be costly and time-consuming, and there is no assurance that the court will grant your family member’s control.
- By executing a LPA, you can ensure that you are appointing someone you trust to act on your behalf, that your interests are protected and that your wishes are carried out even if you become incapacitated or unable to make decisions.
- A LPA will only take effect if you lose mental capacity and a registered medical practitioner has verified your condition.
- The 2 general powers granted in a LPA are:-
- the Personal and Welfare “Power,” deals with matters that involve the person’s well-being.
- The decisions about the person’s health, where they should be cared for, and how.
- It also involves the medical decisions that may have to be made. These decisions could even have life-or-death implications.
- the Property and Affairs “Power,” deals with matters that involve a person’s belongings and financial situation.
- It can be uninteresting, like paying bills, checking that their bank account is in order, looking after investments, etc.
- the Personal and Welfare “Power,” deals with matters that involve the person’s well-being.
- It is very important to select the right person to be your Donee. It needs to be someone you can trust. It is advisable to have a candid conversation with your potential Donee to discuss your expectations, concerns, and the scope of their authority.
- Establishing an LPA is an important part of making a comprehensive estate plan.
- By designating someone you trust to act on your behalf, you can ensure that your affairs are managed according to your wishes, even in unforeseen circumstances.
- Seek professional advice to ensure your LPA is valid and adequately addresses your unique situation.
4. Advance Medical Directive (AMD)
- An Advance Medical Directive (AMD), a Living Will, was introduced in Singapore in 1997 under the Advance Medical Directive Act.
- The Advance Medical Directive (AMD) allows individuals to specify the medical conditions under which they do not wish to receive life-sustaining treatment. This includes treatments such as artificial ventilation, tube feeding, and cardiopulmonary resuscitation (CPR).
- This document expresses your wishes to the medical team treating you regarding using extraordinary life-sustaining treatments when you are terminally ill, mentally incompetent or unconscious.
- It is important to note that the Advance Medical Directive (AMD) is only used when there is no reasonable hope of recovery and the individual cannot make decisions about their treatment.
- Making an Advance Medical Directive (AMD) is entirely optional, and you can revoke the Advance Medical Directive (AMD) at any time.
- It is essential to understand the difference between an Advance Medical Directive (AMD) and euthanasia.
- Euthanasia is the deliberate ending of the life of a person suffering from an incurable and painful disease.
- An Advance Medical Directive (AMD) instructs your doctor not to proceed with extraordinary life-sustaining treatment. It allows you to die naturally when you become terminally ill and unconscious while minimizing suffering through palliative care and medication.
5. Trust
In terms of estate planning, setting up a Trust is one choice that can offer many benefits.
A trust is a legal entity that handles and holds assets for people who have been named as beneficiaries.
Let’s explore the advantages of establishing a Trust in your estate plan.
– Asset Protection
- When you put your assets in a Trust, they are safe from possible creditors and lawsuits. This can be particularly valuable if you have substantial assets or if you anticipate any future claims or lawsuits.
- Protecting your hard-earned assets ensures that they are preserved for your intended beneficiaries.
– Privacy
- Another advantage of utilizing a Trust is its enhanced privacy level.
- Unlike a Will, which becomes a public record upon your passing and is subject to public inspection, a Trust allows for a more confidential distribution of your assets.
- Your financial affairs, beneficiaries, and the terms of your estate plan remain private. This privacy can be essential for individuals who prefer to keep their personal and financial matters out of the public eye.
– Avoiding Probate
- Probate is the legal process through which a court oversees the distribution of assets after a person’s death. One of the major drawbacks of relying solely on a Will is that it often requires probate.
- Probate can be costly, time-consuming, and prone to legal system complexity. Establishing a Trust will help you avoid the probate process, facilitating a more effective transfer of your assets to your beneficiaries.
– Flexibility and Control
- A Trust offers greater flexibility and control compared to a Will.
- You can specify detailed instructions for how your assets should be managed and distributed.
- Customised trusts can be made to meet particular needs, like taking care of minor children, making sure they have ongoing financial support, or handling the complicated dynamics of a family.
- A Trust can include provisions for the appointment of successor trustees in the event you become incapacitated, granting you peace of mind that your affairs will be handled according to your wishes.
Setting up a Trust as part of your estate plan can provide you with significant benefits, including asset protection, privacy, avoidance of probate, and increased flexibility and control. You should consult an experienced estate planning lawyer to determine the most suitable trust structure for your needs.
6. Digital Assets And Online Accounts
- In this digital world, people need to protect their digital assets and online accounts as part of their estate planning. We spend a lot of time online, so it’s important to have a plan for what will happen to our online assets after we die.
- First and foremost, taking inventory of your digital assets is essential. This includes any online accounts such as social media profiles, email accounts, online banking, cryptocurrency wallets, and any other platforms where you have a presence or hold valuable assets. Make a list of these accounts, including usernames and passwords, and store them in a secure location such as a password manager or a trusted individual.
- Once you have identified your digital assets, consider designating a digital executor in your Will. This person will manage and distribute your digital assets according to your wishes. Choosing someone tech-savvy and trustworthy is essential, as they must navigate the complexities of digital accounts and ensure your wishes are carried out.
- Some online platforms also have choices for planning your digital estate. Google, for example, has a feature called “Inactive Account Manager” that lets you choose someone to handle your Google accounts after you die. There is also a “Legacy Contact” feature on Facebook that enables you to pick someone to take care of your page after you die.
- Lastly, consider the privacy and security of your digital assets. Ensure that your online accounts have strong and unique passwords, enable two-factor authentication whenever possible, and regularly review your privacy settings to ensure you are comfortable with the level of access others have to your digital information.
By protecting your digital assets and online accounts, you can know that your digital presence will be managed according to your wishes and that your valuable assets will be passed on to your chosen beneficiaries.
7. “Need to Know” File
- Once you’ve made these decisions, it’s important to communicate them to those most impacted.
- By creating a comprehensive “Need to Know” file, you can make it easy for them to access the information they need to carry out your wishes.
- Your “Need to Know” should include your wishes for medical care, funeral arrangements, and other vital instructions.
- Maintaining current with this file is crucial since your preferences could evolve with time. Making these choices ahead of time will assist your loved ones in getting through a trying period and lessen stress. It also ensures that your intentions are followed exactly as you want.
8. Updating Your Estate Plan Regularly
- Regularly reviewing and updating your estate plan is crucial to ensure it reflects your current wishes and circumstances. Life is ever-changing, and so are your needs and priorities.
- Regular updates to your estate plan allow you to:
- Reflect on changes in your financial situation.
- Modify beneficiaries and distribution plans.
- Appoint new guardians if necessary.
Starting an open and honest conversation about estate planning with your loved ones is essential for a secure future. By initiating these discussions, you can ensure that everyone understands the importance of estate planning and its impact on their lives.
By engaging in open and honest conversations with your loved ones and seeking the assistance of trusted legal professionals, you can ensure that your estate plan reflects your values and objectives.
Remember, estate planning is not a one-time task but an ongoing process that should be reviewed periodically to accommodate changes in personal circumstances or laws.
Speak to us for advice on your Estate Planning Matters today!
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