Legacy planning involves drawing up a financial plan to dictate how one’s estate is to be distributed after death. An estate, in common law, refers to a person’s total net worth in assets at death. These assets include money, property, entitlements and valuable possessions. This is why a legacy plan is also known as an estate plan.
Is a legacy plan compulsory?
While a legacy plan is not mandatory, it is important. Without it, Singapore’s intestacy laws might not distribute your estate according to your wishes.
In addition, a clear legacy plan would enable your loved ones to:
- Avoid spending extra money and time managing and distributing your estate after your passing. When there is no will, your next-of-kin will have to go through more red tape in order to disburse your assets. This may include having to hire a lawyer to submit an application for a Grant of Letters of Administration.
- Continue living comfortably without change in quality of life.
- Avoid arguments related to inheritance issues.
- Locate and disburse each asset you own.
Legacy planning is not a privilege of the rich. When you have children, a spouse, a business, or an asset which requires some form of oversight (e.g. Bitcoins, property), adequate legacy planning becomes even more important.
How to get started on legacy planning
In Singapore, the key components of legacy planning comprise:
- Writing a will
- Making Central Provident Fund (CPF) nominations
- Nominating beneficiaries for your life insurance policies
- Appointing Lasting Power of Attorney (LPA)
- Signing an Advanced Medical Directive (AMD)
Writing a will is perhaps the most daunting task in the above list. Before writing a will, make a checklist for yourself:
- List all your assets and their corresponding values.
- Plan how to distribute them. Who will inherit what?
- Will you need to appoint testamentary guardians for legitimate children below the age of 21?
- Who can you trust to carry out your wishes?
Can you DIY a legacy plan?
Yes, it is entirely possible to do your own legacy planning. While a legacy planner can help you organise your affairs, there is a plethora of online DIY tools you can use.
iWills.sg, for example, can help you with writing a will and listing your assets. The Legacy Dashboard feature is useful for consolidating your estate. You can use it to find out your net worth by listing your property, bank accounts, insurance policies, investments and business Interests. When you’ve written your will, it will reflect your estate distribution too. When you print out your will, what you’ve entered in the Legacy Dashboard will be generated as a Schedule of Assets – a very important document your executor will need in applying for Grant of Probate.
Do note though, that the Schedule of Assets is merely an addendum to the will. It is not legally enforceable on its own.
Assets which cannot be willed
There are assets which cannot be distributed with a will, namely:
1) CPF savings
2) Life insurance policy plans with nominated beneficiaries
You will need to make a CPF nomination to ensure that your CPF savings go to your intended beneficiary. Life insurance policy plans are usually taken on for the sake of dependents and the policyholder would have had to name them when signing the document. The benefits from non-nominated policies, however, can be distributed according to the policyholder’s will.
How to draft a Will
Although a will is a legal document, it does not need to be created in a lawyer’s office in order to be valid. It only needs to fulfil these criteria to be recognised:
- 1. The will must be committed in writing.
- 2. Testator (writer of the will) must be at least 21 years old.
- 3. Testator must be of sound mind and not under duress.
- 4. The testator must sign the will in the presence of two competent witnesses, who must also sign it in turn.
- 5. These two witnesses cannot be beneficiaries of the will.
You could draw up a rudimentary will on a piece of paper, or you can use the Will Checklist in iWills to help you draft. That’s where iWills comes in handy. For your peace of mind, the iWills legal template has been vetted by lawyers and is court-approved in most situations.
The iWills will template allows the testator to:
- – Appoint up to two joint executors and one optional replacement executor.
- – Appoint a testamentary guardian for legitimate children below the age of 21.
- – Assign specific gifts to beneficiaries.
- – Distribute residuary estate by percentage (what’s left of the assets after deducting debts, taxes, and gifts).
Access to this will template is free of charge. The user will be able to preview, download and print a copy of the draft will after creating a complimentary iWills account. The Legacy Dashboard is also accessible for free. iWills saves soft copy will details for complimentary account users in its secure data vault for 30 days. iWills uses Amazon Web Services, a highly secure cloud platform, to store users’ personal data.
What to do after drafting your will
As digital wills are not legally enforceable, you must print out your will and sign it in wet ink. This must be done in the presence of two witnesses, who must be above the age of 21 and must not be beneficiaries of the will. They must then sign on the will after watching you sign it.
This hard copy will bearing the three wet ink signatures must then be kept in a safe place. Its location should be conveyed to your executor. This is because the original will has to be produced in a court of law to apply for Grant of Probate.
Use iWills to help you with legacy planning
If you need help with printing out the will and finding competent witnesses, you can consider subscribing to the iWills Executive Plan for S$38/year and buying an add-on service. The menu of add-on services include Print & Delivery, and Print & Will-witnessing at a Singapore-registered law firm.
iWills Executive Plan members can log in as many times as they desire during their year-long membership to update their Legacy Dashboard, or create a new will. They can also upload precious sentimental messages and a confidential PDF document of their choice to their personal, digital Time Capsule.
As part of your legacy planning, you might wish to write a letter of wishes for your loved ones too. However, please note that a letter of wishes is legally unbinding and unenforceable.
It is never too early to start working out your legacy plan. Instead of leaving things up to chance, protect yourself and your legacy from unexpected circumstance by writing your will and getting your affairs in order as soon as you can.