Why is it important to write a Will and when is the best time to do it?
Doing a Will is important because it lets you plan and decide who gets your assets after your death. That means someone is entrusted by you to handle these affairs according to your wishes. As such, you can choose a person or a group to possess your assets such as property, items (e.g. Jewellery), money and even your insurance policies or digital assets after your demise. If you have children under 18 years old, the Will states clearly who will care for them until they become adults.
Creating a will helps minimize potential conflicts among relatives and friends and ensures that your wishes are respected and followed after you pass away.
Specific Considerations for Young Parents Preparing a Will
- Guardianship Provisions: Clearly state who will care for your kids if you are no longer able to, ensuring they are raised as you intend.
- Trusts for Minors: Setting up trusts can safeguard any inheritance, regulating its use until your children are mature enough to manage it themselves.
- Specificity in Asset Distribution: This includes personal items of sentimental value too. Young parents often overlook specifying who gets personal items, assuming “all to my children” is sufficient. However, detailing who gets what can prevent disputes among siblings.
- Educational Funds: Designate funds specifically for your kids’ education to support their future learning goals.
- Instructions for Digital Assets: Young parents who are likely to have significant digital assets (social media accounts, online savings, cryptocurrencies), should include specific details on how these should be managed or bequeathed.
- Addressing Liabilities: Ensure that your Will details how liabilities are to be settled to prevent complications and protect your family’s financial future.
The legal age to write a Will in Singapore is 21 years old. The ideal time to create a Will is as soon as you have significant assets or dependents, allowing you to prepare for the future comprehensively.
Setting up a trust within a Will
There may be a need to set up a trust within a Will, should you pass on untimely while the children are still under 18 years of age. One of the most common instructions set up is to ensure that payouts are given periodically at different life stages until the children reach a certain age that you deem mature enough for them to handle the funds on their own. A trust formed in a settlor’s Will is called a testamentary trust. It’s not only for minors but can help protect your children’s inheritance as you can also include instructions for assets that require active management. Fees are applicable for trust activation. A testamentary trust offers greater control over the distribution of assets to beneficiaries which can be particularly useful for blended families or vulnerable persons.
Requirements for a Valid Will in Singapore
To ensure your Will is legally valid, adhere to the following requirements:
- The Will must be written and signed by you, the testator, who should be at least 21 years old.
- It must be witnessed by two people who are not beneficiaries of the Will; these witnesses must also sign the document in your presence.
Additionally, incorporating a residuary clause helps manage any assets not specifically mentioned, providing a safety net and preventing them from being distributed under general intestacy laws.
Cost of Drafting a Will for Budget-conscious Parents
In Singapore, did you know that it can cost nothing to make a Will, if you do it yourself? There are Will templates that you can follow too.
Jenelle’s Will-Making Tips: OCBC has a free online Will Generator – worth a try if you have uncomplicated plans. Do note that this is only valid for non-Muslims as Muslims should consult a lawyer well-versed in Muslim inheritance law for succession planning.
Seeking advice from lawyers or Will Writers can give you better insights on crafting your desired Will.
I don’t know how to write my own Will. Must I engage a lawyer?
While you can do up your own Will for free, there is also the option to engage a Professional Will Writer or a lawyer. If yours is a generic, straightforward Will, writing your own can a good option. The next step would be to deposit your Will record in the Wills Registry.
However, with the help of experienced persons, you have better piece of mind as they will take you through the nitty-gritty aspects which you may not have thought of. With an expert’s help, doing up a basic Will may cost $300 onwards. This cost varies depending on the complexity of your needs and who you hire. It’s best to check with the expert to understand their services and fees.
Jenelle’s Will-Making Tips: I would still strongly encourage engaging the help of experienced individuals or professionals. They can serve as an extra pair of eyes to cover any loopholes that you might overlook. Alternatively, you are welcome to contact me, as I work with partners offering discounted Will packages.
Common Mistakes to Avoid When Preparing a Will
Delaying the creation of a Will can leave your estate vulnerable to intestacy laws under Intestate Succession Act, if you pass away unexpectedly, complicating the distribution process for your family.
Neglecting professional advice: DIY Wills may seem like a cost-effective option, but most of us lack the legal expertise necessary to ensure our wishes are properly documented and executed. Some people forget about their financial or investment plans, insurance policies, stocks and shares. It would be wise to consult with the respective professional in charge, including your financial advisor. Doing so ensures that they are penned down on paper and how you’d like them to be distributed to your intended beneficiaries.
Not regularly updating the Will: Life circumstances change over time, so it’s important to review and update your Will periodically to reflect that. Changes include divorce, re-marriage, death of beneficiaries, children or spouse, change of relationship with your beneficiaries.
Vague language: Ambiguous or unclear language in a Will can lead to disputes among beneficiaries and may even render certain provisions unenforceable. It’s essential to be as specific and clear when drafting your Will.
Overlooking tax implications: Failing to consider the tax implications of your estate plan can result in unnecessary tax burdens for your beneficiaries. Consulting with a tax professional or estate planning advisor can help you minimize these taxes which your beneficiaries may incur unexpectedly.
Accessibility of the Will: Information on where to store the will securely, how to make it accessible to executors when needed, and the role of the Wills Registry could be expanded.
Important Legal Connections and Nominations
- Insurance Nominations: While not compulsory, making an insurance nomination allows for the direct disbursement of policy proceeds up to S$150,000 to your nominees, reducing the complexity and time needed to access these funds for beneficiaries’ day-to-day expenses. Any amount exceeding S$150,000 will be paid to the executor(s) named under a Grant of Probate or the administrator(s) named under a Grant of Letters of Administration.
- CPF Nominations: It’s crucial to understand that CPF monies are not covered under Wills. Making a CPF nomination ensures that your CPF savings are distributed according to your wishes without being subjected to the default provisions of the Intestate Succession Act.
Having a will safeguards your children’s future and ensures your assets are handled according to your wishes.
Understanding Grants of Probate and Letters of Administration
- Grant of Probate: Issued when there is a Will, it authorizes the named executor to manage and
distribute the estate according to the Will’s instructions, providing clarity and reducing disputes.
- Letters of Administration: Necessary when no Will exists, appointing an administrator to
distribute the estate based on intestacy laws, which might not reflect the deceased’s wishes and can lead to complications and delays. The process can be more time-consuming and complex, particularly if the deceased’s assets are substantial or family disputes arise because family members may be unaware of what the deceased owns, leading to investigation costs incurred. Hiring a lawyer to identify and correspond with entities holding the deceased’s assets, incurring what’s known as “investigation costs” can be costly and time-intensive.
Both documents facilitate the management of an estate but having a Will linked with a Grant of Probate ensures your assets are protected and handled precisely as you intended, making the process smoother and more reflective of your personal plans.
Preparing a Will as a young parent in Singapore is not just a legal formality but a crucial part of responsible parenting. It is also good to know that stepchildren have no legal position in the Intestate Succession Act. If you don’t name them in your Will, they will be excluded from your estate.
It is common to confuse having a Will with drawing up similar-sounding documents like a Lasting Power of Attorney (LPA), Advance Care Planning (ACP) or Advance Medical Directive (AMD). These 4 documents encapsulate different aspects of one’s life and plans. If you’re unsure and would like to find out how to plan your future roadmap, I’ll be happy to walk through with you.
