Having a will that states exactly how your estate should be distributed upon your passing has its advantages. Estate planning refers to organising your affairs such that your loved ones and co-dependants are provided for upon your death. “A will is a document containing a set of directions and instructions on how you wish to distribute your assets after your passing,” explains Dorothy Chai, a partner with Dorothy Chai and Mary Ong Law Practice. “A well-drafted will helps to speed up the probate process and provides clarity to your loved ones and descendants on your wishes.”
WHY YOU NEED A WILL
Many Singaporeans think they do not need a will because the government will do the job of distributing their assets when they pass on, says lawyer Simon Tan, managing director of Attorneys Inc. “But without this document, the distribution of your assets will be done according to the Intestate Succession Act, which may not necessarily reflect your intentions,” he explains. Making a will not only allows you to dictate who gets which of your assets, you also get to appoint someone you trust as the Executor of your estate when you pass on.
WHO CAN MAKE A WILL
In Singapore, you may make a will if you are over the age of 21 and are of sound mind. You must sign your will in the presence of two witnesses, who must in turn sign it in your presence. You can draft a will yourself although it should ideally be drawn up or witnessed by a solicitor, who can ensure proper compliance with the law.
ADMINISTERING YOUR ESTATE
You would need to appoint an Executor, who will attend to all the necessary formalities prior to distribution of the estate, such as making the application for a Grant of Probate, paying your debts and funeral expenses, and converting all your assets into cash — provided that this is in accordance with the will.
You would also need to appoint a Trustee, who will attend to the distribution of your assets in accordance with your instructions as contained in your will. The Testator (person making the will) may appoint the same person as the Executor and Trustee.
The Grant of Probate is the court order that empowers the Executor(s) (and Trustee(s), where applicable) to carry out the instructions in the will. Upon the death of a person who has left assets but no will, a Grant of Letters of Administration will need to be applied to the court through a solicitor.
There are three main steps involved in the application of a Grant:
- Making a formal application for a Grant to the court by filing the requisite documents
- Filing a Schedule of Assets (this includes the deceased’s properties in Singapore as well as outstanding debts, which are secured by mortgage)
- Extracting the Grant from the Court
The Court will only issue the Grant after it is satisfied that all procedures have been correctly followed. The Grant authorises the Administrator or Executor to do the following:
- Open and manage a bank account in the name of the estate of the deceased
- Approach the bank where the deceased had bank accounts and request that those accounts be closed and the proceeds in such accounts be paid to the estate
- Sell, transfer or otherwise deal with the deceased’s shares and other movable properties (eg computers, cars, jewellery)
- Sell, transfer or otherwise deal with any immovable properties (eg land, houses) owned by the deceased solely or as a co-owner
Of course, the Executor must ensure that his actions are mandated and in accordance with the terms of the will. If you have young children, you may also wish to appoint someone you trust as a Guardian in the event that you and your spouse pass on.
WHAT TO INCLUDE IN YOUR WILL
Generally, assets that are solely in your name such as your house, car, shares, monies from your bank accounts, cash and jewellery, and proceeds from your insurance policies can be given away in your will. You cannot include Central Provident Fund monies and assets of which you are a joint owner.
According to Tan, you can specify how you want to allocate your assets to each beneficiary and why. “For example, you may want to reward a child for having shown filial piety towards you,” he describes. “If you have parents who are old and unwell, you may wish to provide for their care.” He also cites a case of a mother who decided to divide an asset among her daughters, leaving out her son. He goes on to add that one could even express one’s feelings towards one’s spouse or children in the will. “Some people have included poems and love messages, and also the passwords of their safe deposit boxes, external hard drives and computers,” he says with a smile. If you have antiques or even a wine collection to give away, they could be listed as assets in such a document.
“The benefit of being detailed is that your Executor(s) know exactly what your assets are, reducing the need to search for them,” advises Mary Ong.
“The downside is that you would have to change your will whenever you acquire or dispose of your assets.” Ong says some of her clients opt to add a general clause, but inform the Executor(s) of the details privately.
The Grant of Probate does not apply to properties in other countries. If you have properties located in, say, Malaysia, you will have to reseal your Grant there. If your assets are located in a country that does not allow for resealing, you must obtain a Grant of Probate there.
A properly drafted will anticipates potential problems that might occur in the administering of the estate. It should also embed safeguards so that your Executor, Trustee and Guardian do not abuse their respective positions.
Other documents you can include in your estate planning are a Lasting Power of Attorney (LPA) and an Advanced Medical Directive (AMD). Both are separate legal documents from the will. The LPA is a legal document that allows a person who is at least 21 years of age to voluntarily appoint one or more persons to make decisions and act on his behalf should he become mentally incapacitated. An AMD is useful when you do not wish to receive any life-sustaining treatments if you suffer from a terminal illness and become unconscious or incapable