Last Updated on November 16, 2022 by Parentology
In this new series, we touch on will writing as it is an important part of legacy planning that many parents are still unaware of. Through this, we hope to bring the awareness of will writing into your legacy planning.
Some people say: “It’s okay if I die without a will – I’m not rich anyway.” Or, “I’m too young to write a will.”
But contrary to popular belief, wills are not a privilege of the wealthy, and neither does death happen to only the old. Without a will, one’s estate will be distributed according to Singapore’s intestacy laws. This might mean that some of your loved ones won’t get to inherit anything from you!
If we have kids or elderly parents to care for,we certainly want tomake sure that our hard-earned wealthwill benefit them.
A will is a legally enforceable document which expresses how the testator (person who wrote the will) wishes to have his or her estate – cash, property, entitlements and valuable possessions – distributed after death. In this article, the word “estate” refers to a person’s total net worth in assets at death.
Therefore, as long as we have financial responsibilities and people we care about, a will is a must-have. It will go a long way in protecting our loved ones’ interests and your legacy.
The implications of dying without a will
If you die without a will, there could be serious implications for your loved ones.
Your assets cannot be dealt with immediately
Your assets (except for those in joint accounts) will become what lawyers call illiquid. In laymen’s terms, we usually refer to this state as “frozen”. This means that money cannot be taken out from the bank accounts, the properties cannot be sold, and securities cannot be dealt with.
For families who face hefty medical bills and funerary expenses, not being able to access your assets could lead to cash flow issues. The quality of life of your loved ones could be compromised during this time.
To access your assets, the next-of-kin must apply for Letters of Administration
Since the deceased died without a will, there’s no named executor to manage the estate. The deceased’s closest next of kin, usually the spouse or eldest child, will have to assume the role of administrator. The administrator (minimum age 21) will have to first apply to court to obtain an order called the Grant of Letters of Administration before he or she can have the legal authority to deal with the deceased’s estate. Up to four administrators may be appointed for this purpose.
As there could be a lot of red tape involved, the administrator might need to appoint a probate lawyer. Otherwise, they would have to refer to the Probate and Administration Toolkit on the Family Justice Courts website.
The process might take approximately 2 – 6 months for non-contentious estates.
The administrator(s) must compile a Schedule of Assets
During the legal process of applying for the Grant of Letters of Administration, it will fall to the administrator to compile a Schedule of Assets. This is a list of the deceased person’s assets and liabilities.
How will the administrator know exactly whatassets you’ve accumulated in your lifetime? If you’re secretive about your investments and have never compiled a comprehensive portfolio, this might involve calling up every single bank and fund house just to check.
After all assets have been accounted for, the administrator will need to pay off the deceased’s debts, outstanding taxes and loans. This includes all bank loans, credit cards, utilities, and subscriptions.
Your assets will be distributed according to intestacy laws
Lastly, your estate must be distributed according to the Intestate Succession Act. More on this in the next section.
The distribution of inheritance includes any bank accounts, securities, real estate, and other assets that the deceased own at the time of death, after paying off debts and tax.
Singapore’s Intestate Succession Act
To summarise Singapore’s intestacy laws, this is what will happen when one dies without a will leaving:
- Only spouse – surviving spouse would get 100% of the estate
- Only parents – each parent would get an equal share of the estate
- Spouse and children – 50/50 split
- Spouse and Parents – 50/50 split
- Siblings – if there are no spouse, parents and/or children, the estate will be split equally among siblings
- Grandparents – if there are no spouse, parents, children and/or siblings, the estate will be split equally among grandparents
- Uncles and aunts – if all of the abovementioned relatives are not present, the estate will be split equally among each uncle and aunt
- Government – if none of the above is present, government takes all of the deceased’s estate
This manner of distribution may not be satisfactory to everybody. For example, let’s say one dies leaving elderly parents, a spouse and children. The spouse and children will each receive half of the deceased’s estate – while the parents get nothing. Moreover, some assets may have to be liquidated in order to be distributed by percentage.
The earliest you can write your will is 21 – so why not now? Be prepared for the unexpected instead of leaving it to chance for things to go your way.
You can make a will inexpensively in the comfort of your home. iWills.sg, an e-platform designed by ex-bankers, provides a lawyer-vetted will template that you can try out for free. By writing a will today, you can choose to distribute your wealth, your way.
The content above is for general reference only. It does not take into account the needs of any individual and does not intend to provide financial or legal advice. When in doubt or in need of assistance, seek advice from a Singapore qualified lawyer.
Contact us below for a non-obligatory financial advisory session with our licensed Financial Advisor as well as certified Will Planner.