When we’re alive, we tend to be more concerned with the present than with death.
However, even if you have made efforts for your loved ones, such as setting money aside or purchasing life insurance, your responsibility doesn’t fully stop there.
Perhaps the missing puzzle to fulfill your obligations is through making a will.
You don’t want the courts to decide who gets your money, do you?
In this article we’ll go over the following topics:
- How a Will Works
- Customization options for the dispersal
- Useful information about Will
- Many more
How a Will Works
It’s important to keep a will in a secure location after it’s been signed by two witnesses. You’ll still be able to tweak things as you go along.
However, following your death, the executor you’ve designated will gather all essential documents, including the Will, and apply for the Grant of Probate – a court order formally granting control to the executor to carry out the desires in the Will.
Execution duties include setting up an estate bank account, paying off debts and liabilities, and disbursing any remaining assets in accordance with the Will and any other directives.
Much more goes into it..
What Exactly Is a Will?
A will is a legal document that specifies how your assets (e.g., money) will be allocated after your death.
It’s important to have one so that you can describe everything you want done and who gets the inheritance.
Singapore’s Wills Act governs this matter.
Benefits of Having a Will
With a will, you can specify how much (or how little) your beneficiaries will get after you die.
That’s not all it does.
Here are the other things it’s capable of:
- Indicate who is entitled to receive the asset/properties.
- Avoid getting into confrontations and disagreements with your loved ones.
- Beneficiaries are able to collect their funds more quickly.
- Appoint a guardian for children under the age of 18
- Costs are reduced
- Instead of making a single payment, you might set up a testamentary trust to disburse funds over time or pay a fixed monthly amount
- and even more
Different roles in a Will
It takes a team to draft a will, and each member is crucial.
Testator
Only the individual making the Will can be known as a testator.
This person must be at least 21 and has a sound mind.
Executor
The executor is the most significant person after death.
As stated in the will, he/she is responsible for all of the estate’s administrative obligations, such as obtaining the Grant of Probate, withdrawing money from various banks, paying off debts and liabilities, and more.
Being an executor is a challenging task. And he or she should be someone you can rely on.
The “task” can even be declined by the designated executor. So, having a backup executor (s) is a good idea.
Even though the executor has a lot of power, he or she is bound by the terms of the Will. Not doing so (such as spending money that was not intended for him/her) could be a criminal act of trust-breaching.
An executor must be at least 21 years old, of sound mind, and not a bankrupt in order to be appointed. He or she may also stand as the beneficiary(e.g spouse or adult child).
Trustee
A trustee’s role is distinct from that of an executor.
The executor’s primary responsibility is to follow out the instructions laid down in the testator’s will.
When it comes to the trustee, if it’s different from the executor, its job is to manage the estate and distribute the funds to the beneficiaries.
It is possible to use a professional trust firm as the trustee. For people who want more control over how their beneficiaries, especially those who are vulnerable or small children, receive the money, this can be incredibly advantageous.
Beneficiaries
Beneficiaries are the individuals or entities designated in your will to receive the assets you leave behind after your death.
Anyone or any group can be your beneficiary.
Examples: spouse, children, parents, charities, and etc..
You can have as many beneficiaries as you like.
Witnesses
Two witnesses are required for the signing of your will after it has been written.
Beneficiaries or spouses of beneficiaries may not serve as witnesses.
They must also be at least 21 years of age and of sound mind to qualify as witnesses.
Guardian
If you have children under the age of 18, appointing a guardian can be a good idea.
If there is a surviving spouse, this may not be a significant deal.
However, if the testator is a single parent or both parents pass away at the same time, this can be a problem.
Who will look after the children?
By failing to designate a guardian in your will, the court may select someone who is not best qualified to look after your children.
What a Valid Will Requires
It’s easy for everyone to jot things down on paper.
However, it must be “legally” valid by abiding in law in order to make it an official Will.
If you don’t abide by these guidelines, your Will may be invalidated or challenged in the future.
So, here are a few things to keep in mind:
- The Will must either be handwritten or printed out in order to be legally binding.
- The test subject must be at least 21 years old to participate in the study.
- Signature of the testator is required at the end of the Will.
- It is required that the signature of the testator be witnessed by two people (they have to sign too)
Other Useful Information You Need to Know
It’s critical to understand your assets and obligations and the best way to manage them. These information are the most significant aspects of your financial situation.
With that in mind, let’s start with liabilities.
Indicate your liabilities and the means through which you intend to pay them off. Your executor will be able to simply follow your instructions if this is the case.
Assets are a matter of personal preference and the specificity with which your Will is drafted (e.g., to will everything to A and B in equal proportions, or to will property to A; other assets to B).
There are several situations where a current inventory of your assets and liabilities is not necessary.
In order to properly administer your estate after your death, your executor must file a document known as the Schedule of Assets. All of your assets and liabilities should be listed in this document.
It will take a long time to write to financial institutions and verify assets if the executor starts with a blank piece of paper.
What is Not Included in a Will?
CPF Monies
These CPF items are handled in a unique manner;
- Ordinary Account
- Special Account
- MediSave Account
- Retirement Account
- Unused CPF LIFE premiums
And they can’t be included in a Will.
What will happen?
It will be dispersed according to the law of intestacy or Muslim if you leave no CPF nomination upon your death.
The following are the three drawbacks of failing to submit this nomination:
- not in accordance with your preferences
- higher prices
- longer duration
However, if you make the nomination, CPF funds will be dispersed in accordance with any nominations you make.
Amounts Paid Out by Insurance
Revocable (the most common) or trust nominations can be made for insurance plans that have a death benefit.
The distribution will be made in accordance with the nomination, not the will, if you make a nomination. If certain requirements are met, you can still “override” your insurance nomination with a will, but this may not be the best option.
That means the insurance company can pay out the full amount of a nominee’s death claim if there is a nomination and an acceptable death claim is lodged.
Your family members who need money quickly will benefit from this.
You may not want to nominate all of your insurance policies, though, if your payouts are small.
Why?
Because you will receive the entire money if you make a nomination.
You won’t be able to pay your beneficiaries in installments or on a monthly basis because of the lack of payment flexibility.
As a result, some people may decide to simply nominate some selected policies (in order to conserve cash) before distributing the remaining policies according to their will. In the Will, specific provisions can be made to pay a monthly sum and/or stagger payments based on the recipient’s age.
In a Joint Ownership Arrangement
Co-ownership can take the form of either joint tenancy or tenancy-in-common.
Survivorship rights apply in a joint tenancy.
In other words, in the event of the husband’s death, the wife will be the sole owner of the home.
However, with a tenancy-in-common, the amount of property each party owns can be readily determined. 50/50 or 80/20, for example.
A person’s part can be taken away in this circumstance.
Joint Savings Accounts
Joint bank account funds are typically not included in a decedent’s estate.
Account closure and transfer of funds are available to a joint account owner who wishes to close his or her account following a death.
On the other hand, this may not always be the case.
Putting Your Money in a Trust Fund
In some cases, trust company assets may not be included in an individual’s estate.
More control over the distribution to your beneficiaries is now at your fingertips.
You might want to put money in a trust fund for the following reasons:
- Protection from creditors
- Secrecy asset protection for vulnerable or reckless benefactors…
- and more
Who Is Able to Create a Will?
Contrary to popular assumption, drafting a will does not necessitate the services of an attorney.
There’s nothing stopping you from writing your own.
However, in order to be legitimate, a will must still meet the criteria listed above. If not, it’s nothing more than a piece of paper.
Yourself
It’s possible to get support from online templates and online writing businesses.
Such templates are even freely available.
These choices may be an affordable method to write a will. There are exceptions to the rule, though.
There is a chance that the Will may be invalidated if it is not correctly written.
In any case, hiring a lawyer to draw up a will or online Will writing companies isn’t going to cost you a fortune these days. As a result, you can save time by delegating the task to them.
Lawyer
When it comes to writing a will, a lawyer may be the first person you consult.
However, this may not be their primary area of expertise.
When compared to other possibilities, hiring a lawyer to draft your will will almost always be more expensive.
An additional fee may be levied because it’s “authored by a lawyer.”
Writers of Professional Wills
The best of all worlds in terms of pricing and competence may be found here, as lawyers are not required to draft wills.
The cost of a simple will can range from $300 to $400.
Lawyers may be behind some of these companies, which may have ties to the law practice they’re affiliated with.
Having the ability to bring in additional knowledge if necessary is great.
In addition to will preparation, these organizations also offer other estate planning services, such as LPAs, trusts, and other forms of trusts.
Probate matters can also be handled by them when the time comes.
Because of this, having a single point of contact is much more convenient, even if it costs a little bit more money.
Keep Your Will in a Safe Place
It’s time to put your Will in a safe place after it’s been signed and notarized.
Make sure it’s in a spot that’s safe, but not too remote. It should not be hidden away in a place where it cannot be found by anyone else.
For the simple reason that if it can’t be located, it’s long gone.
It’s also a good idea to tell your executor where it is.
For example, you should not keep it in your bank’s safe deposit box. Especially if it’s an individual’s savings account, the bank might not be able to give up its contents in the event of their demise.
Consider the following locations:
Home-Based Safety Deposit Box
While it’s not completely impenetrable, it offers some degree of security.
Register of Wills
For a modest cost, the Wills registry service will record the location of your will if you choose to keep it there.
The will itself is not retained by this service; just its specifics are.
As a result, your loved ones will be aware of it if they conduct a search.
The Service of Wills Custody
In most cases, a will-writing company provides a service to store the Will.
In their care, the Wills can be kept forever.
This is not only a matter of safety and security, but also of privacy and secrecy.
As a whole, it’s an all-in-one service, even though it costs a little more than $1,000 on its own.
How to Remove a Will from the Estate Plan
Circumstances can shift at any time.
In some cases, a family member may be added or removed.
Writing a will isn’t something you do once and then forget about. It should be reviewed on a regular basis, but more frequently if there are significant alterations.
Changes to the following:
A beneficiary’s death, the death of the executor, the birth of a new child or grandchildren, the acquisition of significant assets, a divorce, etc.
So, if there are significant alterations, the Will may need to be revised.
It might be as easy as adding a codicil or as complex as creating a completely new document (destroying previous copies).
In addition, it is helpful to note that wills are immediately revoked upon marriage. In divorce, however, the Will remains in effect.
Making a Decision Using a Will (Will Trust)
You can appoint a trustee, as was suggested earlier.
The executor’s role is distinct from that of a trustee. Among its responsibilities is overseeing the finances and disbursing funds to the intended recipients.
As long as you don’t plan on distributing the entire amount at once, you may not require a trustee.
However, your beneficiaries may not be able to handle the sudden rise in wealth in the best way if you do it that way. Not to mention the fact that they may be surrounded by an odd assortment of people as a result.
With a testamentary trust, you’ll have more options and control.
It allows you to determine the specifics of how rewards will be made. You might only pay out a set amount when the beneficiary is of legal drinking age or has earned a bachelor’s degree, for instance. You can also set a monthly payment amount instead of the total money, if you want.
The trustee might also serve as the executor.
But if you do not want your executor (for example, your husband) to be in charge of everything, you can designate a trust business to act in that capacity on your behalf.
As a result, the executors of the will will be in charge of the estate’s management and distribution. There is a charge for this service.
When someone dies, a testamentary trust is created.
Other forms of trusts, such as living trusts (formed while you are still alive), are also available. If you’re searching for even more control and privacy, they may be a suitable alternative.
Now, What’s Next?
It doesn’t matter how complicated your assets are; a will is a good idea.
While a basic will is quite inexpensive, it can be updated at any moment.
When it comes to estate planning, it’s something that many people put off until it’s too late.
CPF nominations, insurance nominations, and setting up a trust are further options you should consider.