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Importance Of Estate Planning
OVERVIEW
Understanding Estate Planning
Why Do People Avoid Estate Planning?
What Are The Unintended Consequences of Intestacy?
What Is Intestacy?
How To Minimize The Unintended Consequences of Intestacy?
Lasting Power of Attorney
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FINANCIAL MANAGEMENT QUADRANT
Distribution
?
UNDERSTANDING ESTATE PLANNING
Estate planning is about how you distribute your estate –
the assets and savings that you owned. Preparation
Process
(Before Death)
Person’s Estate
(After Death)
Orderly
Administration
Disbursement
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Why do
people
avoid
Estate
Planning?
WHY DO PEOPLE AVOID
ESTATE PLANNING?
Death is such an unpleasant and morbid event that many try not
to think about it.
Expectations that they still have time to give their final
instructions.
Acting on it involves too much of their work and time.
Totally not interested in planning
Have nothing much to plan or distribute
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WHAT HAPPENS WHEN WE AVOID
ESTATE PLANNING?
Delay
Disputes
WHAT
Intestacy is
a situation
when one
dies
without a
legally
valid Will.
Intestacy
IS INTESTACY?
• Without making any
provisions for the
distribution of assets,
the Intestate
Succession Act shall
apply.
Note: Intestate Succession Act does not apply to the estate of a Muslim as the estate must be distributed in accordance with Islamic inheritance laws.
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Intestate Succession Act (Non-Muslim Estates)
Deceased Die Intestate Leaving:
Distribution
Spouse^ (No parents or issue*)
Spouse – 100%
Spouse, Issue (With or without parents)
Spouse – 50%
Issue – 50% To be shared equally
Issue (No spouse)
Issue – 100% To be shared equally
Spouse, Parents (No issue)
Spouse – 50%
Parents – 50% To be shared equally
Parents (No spouse or issue)
Parents – 100% To be shared equally
Siblings (No spouse, issue or parents)
Siblings – 100% To be shared equally
Grandparents (No spouse, issue, parent
or siblings)
Uncles & Aunts (No spouse, issue,
parents, siblings, grandparents)
Grandparents – 100%
To be shared equally
Uncles and Aunts – 100%
To be shared equally
None of the above
Government – 100%
Guess what will
be your distribution?
^Spouse means husband or wife. * Issue means a child (legitimate or legally adopted) and the descendants of a deceased’s child (grand children of the deceased) . Therefore, illegitimate children are NOT entitled under the Intestacy Rules.
What are the
unintended
consequences
of intestacy?
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BENEFICIARY
ISSUES
Distribute according to Intestate Succession Act
 The distribution may not reflect what the deceased
wanted.
 If the beneficiary is bankrupt, your estate could land
up with the beneficiary’s creditor.
 Elderly parents are excluded from the deceased
estate if the deceased leaves behind a spouse and a
children.

GUARDIANSHIP
ISSUES
If both parents pass away at the same time, there is
no certainty as to who will be the guardian of the
infant children.
 Disputes may arise as to who is the most suitable
person to be the guardian.
 The ex-spouse may be able to gain access to the
assets in the capacity of being the other parent of the
children.

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ADMINISTRATOR ISSUES
Only one person has the power to act on behalf of
the deceased, disputes may arise as a result.
 The person needs to apply to the court formally.
 The law gives priority to the next of kin of the
deceased person’s family.
 The law requires at least 2 administrators where
there are one or more minor beneficiaries.

SETTLEMENT
ISSUES
You are required to furnish 2 sureties to the
Administration Bond if the value of the estate exceeds
S$3mil, or where there are minors, or beneficiaries
who lack mental capacity, or life interest in the estate.
 Each surety must have assets worth the total value of
the deceased person’s estate.
 May take longer distribution time resulting in higher
legal costs.

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Source: Straits Times
“This is a dreadful family
dispute that should not
have reached the courts
for resolution,” said the
judge.
How to
minimize the
unintended
consequences
of intestacy?
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DECIDING ON THE MEANS OF
TRANSFER
Transfer upon Death
Transfer before Death
Transfer through the probate process
Transfer using Will substitutes
TRANSFER BEFORE DEATH
Means of Transfer Before
Death
Gift
Unconditionally gifted the
asset away, he or she no
longer retains the title of
the asset and the recipient
becomes the new owner.
**Living Trust
A trust is a legal arrangement
to transfer your assets to a
trustee. It is created during
your lifetime.
** Note
Trusts cost money to set up and there are recurring fees and expenses
if the trust makes distribution of the assets or income over a period of
time. This will reduce the value of your estate.
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TRANSFER UPON DEATH
Means of Transfer
Upon Death
Transfers through
the probate process
Transfers using
Will Substitutes
Rules of
Survivorship
Will
Testamentary
Trusts
CPF Nominations
Insurance
Nominations
THROUGH THE PROBATE PROCESS
Executor
Beneficiaries
Testator
Trustee
Will
Guardian
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TRANSFER USING
WILL SUBSTITUTES
Rules of
Survivorship
CPF
Nomination
Insurance
Nominations
RULES OF SURVIVORSHIP
Joint
Owner1
Account1
50%
50%
Joint
Owner2
Account2
50%
50%
Surviving
Surviving
A/C
Owner
Holder
100%
100%
Joint-tenancy agreement, 100% goes to Surviving Owner if
either owner passed away.
If the bank account is Joint Alternate or Joint Account, 100%
will also goes to Surviving Account Holder if either account
holder pass away
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CPF
NOMINATION
You can distribute your
monies in the CPF
accounts through CPF
nomination.
Note: The CPF Nomination takes precedence over Intestate Succession Act, Muslim Inheritance Law and Will.
TYPES
OF NOMINATION
Cash Nomination
Your nominee(s) will receive the CPF monies
due to them in cash via cheque or GIRO
upon your demise.
CPF Website > General Information > Forms (View and Print) > CPF Nomination Form
Enhanced Nomination Scheme (ENS)Nomination
Your nominee(s) will receive the CPF monies due to
them in their CPF accounts upon your demise.
Please visit any of the CPF Service Centres to make an ENS nomination.
The Customer Service Executives (CSEs) will assist and explain the
nomination process to you. They will also act as your witnesses for the
nomination.
Note: The CPF Nomination takes precedence over Intestate Succession Act,
Muslim Inheritance Law and Will.
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SPECIAL NEEDS SAVINGS SHCEME
(SNSS)
• Nominee will receive a regular stream of fixed
payouts upon parent’s demise
• Payout will be made to the legal guardian, nominee
or court appointed deputy when the nominee has
no mental capacity
• Administered by Special Needs Trust Co (SNTC)
Benefit
CPF interest will continue to be paid
Forms can be downloaded from www.sntc.org.sg
INSURANCE NOMINATION
Policy owners of life insurance
policies or accident and health
insurance policies with death
benefits have 2 options to legally
distribute the policy benefits to
their nominees;
• Trust nomination; or
• Revocable nomination.
Note: Insurance nomination is allowed for both Muslim and Non‐Muslim’s estates.
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Difference Between Trust Nomination and Revocable Nomination
Trust Nomination
Considerations of
the Policy owner
Revocable
Nomination
Can I retain control No
over the policy for
as long as I am
alive?
Yes
Who gets the policy Nominees get both type of
benefits
proceeds?
Living & Death
Benefits
Living benefits are
paid to policy
owner. Nominees
only get the death
benefits.
Yes
Can I change my
No
nomination by
Nomination can be
myself at any time? revoked only if any
trustee who is not myself
gives consent; or if the
nominees all give consent.
Difference Between Trust Nomination and Revocable Nomination
Considerations of Trust Nomination
Revocable Nomination
the Policy owner
Can I name one or
more nominees
who are not my
spouse or
children?
No
Only spouse and/or
children can be
nominated if you are
married.
Yes
Any legal entity (i.e.
individual, association or
corporation), including
spouse and/or children, can
be nominated.
Nomination of an animal is
an invalid nomination.
Can I make a Will
after having made
an earlier
nomination?
The Will has no
impact on the earlier
trust nomination.
Once a trust
nomination is made,
the policy no longer
belongs to the policy
owner.
The earlier nomination is
revoked by the Will. But
insurance company will pay
according to the latest
properly executed instrument
known to the insurance
company at the time of the
policy owner’s death.
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Differences Between Trust Nomination and Revocable Nomination
Considerations of the
Policy owner
Trust Nomination
Revocable Nomination
What if my nominee
dies before me?
Policy proceeds
passes to the estate
of the deceased
nominee.
What happens if the
nominee is a
bankrupt?
Policy proceeds
protected against
claims from
creditors
If only one nominee is
named, the nomination is
revoked; in all other cases,
the surviving nominees
share in the deceased’s
portion.
Policy proceeds are NOT
protected against claims
from creditors
When can I make the Policy owner is at least 18 years old. Nomination
nomination and how? form can be obtained from the insurance
company.
LASTING POWER OF
ATTORNEY (LPA)
A Lasting Power of Attorney (LPA) allows an individual to appoint person(s) he trusts to be his proxy decision maker(s) or his done(s), in two broad areas of his life – personal welfare and property & affairs matters – if he should lose the mental capacity to make his own decisions because of an accident, a stroke or dementia.
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With an LPA
Without an LPA
• You would have indicated your
personal choice of a trusted
proxy decision maker.
• Your proxy decision maker will
be appointed by the Court;
• Your proxy decision maker
would automatically be able to
step forward to act on your
behalf.
• Your family will go through the
hassle of court procedures
which will incur costs in terms of
time and resources, such as
legal fees.
• Your family and loved ones
would have greater certainty
and peace of mind.
• Putting greater strain and stress
on your family and loved ones
when important decisions must
be made and a proxy decision
maker has yet to be appointed.
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How to Make a LPA
Step 1
Consider who you wish to appoint as your donee(s) and the power to
be given.
Choose the appropriate form
LPA Form 1: This is a standard version that individuals use to grant
general powers with basic restrictions to their donee(s).
LPA Form 2: This is for those who have non-standard requirements
and wish to grant customised powers to their donee(s). LPA Form 2
has to be drafted by a lawyer.
Step 2
Refer to the guide to help facilitate your application
https://www.publicguardian.gov.sg/The-LPA/Refer-to-Guides
How to Make a LPA
Step 3
See an LPA Certificate Issuer to sign as your witness and to certify
that you know the implication of making an LPA.
Any one of the following professionals in Singapore can be the
certificate issuer for your LPA (a professional fee is payable):
a. a medical practitioner accredited by the Public Guardian;
b. a practising lawyer; or
c. a registered psychiatrist
https://www.publicguardian.gov.sg/The-LPA/Where-to-finda-Certificate-Issuer
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How to Make a LPA
Step 4
Mail the completed LPA and application form to Office of the Public
Guardian (OPG) within 6 months from the date the certificate issuer
signs on the LPA.
There will be an application fee for Singapore PRs and Non-Singaporeans.
Application fee is waived for Singaporeans for Form 1 only.
Step 5
After verification by OPG that the application can be accepted, there
will be a mandatory 6 weeks waiting period, after which the LPA will
be registered if there are no valid objections raised.
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1. John and Mary’s HDB jointly owned a HDB flat.
John has written a valid Will recently to will all his
assets to his elderly parents. John experienced a
heart attack and passed away.
a) His parents will inherit everything including the HDB
Flat.
b) His parents will jointly owned the HDB flat with Mary
and inherit the rest of John’s estate.
c) His parents will inherit all of John’s estate except the
HDB Flat.
2. Tom and Susan divorced on 10 June 1985.
He remarried 5 years later. He died in an
accident in 1997. Tom’s last valid Will was dated
1983. In general circumstances, would the Court
accept the Will written in 1983?
a) Yes, because it was a valid Will at the time it was
written.
b) No, because remarriage will revoke the previous
Will.
c) The Court will have to investigate further.
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3. Lisa made a CPF nomination and nominated
her boyfriend Harry as the sole nominee in
2010. They broke off in 2012 and she did not
made a new nomination. Lisa made a valid Will
in 2013 to will all her assets to his parents. Later
that year she died in a diving accident.
a) Lisa’s parents will inherit Lisa’s entire estate.
b) Harry will receive Lisa’s entire CPF monies.
c) Lisa’s CPF monies will be shared between Harry
and her parents.
Useful links: Central Provident Fund ‐ www.cpf.gov.sg
Insolvency and Public Trustee Office – www.ipto.gov.sg
Law Society of Singapore ‐ www.lawsociety.org.sg
Office Of Public Guardian ‐ www.publicguardian.gov.sg
MoneySENSE Singapore – www.moneysense.gov.sg
The MoneySENSE‐Singapore Polytechnic Institute for Financial Literacy ‐ www.finlit.sg
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