Estate Planning in Singapore

Estate Planning Singapore AAM Advisory

Family means everything to you — protecting and providing for your dependents after you are gone requires timely and proper estate planning. A will is a cornerstone and key step to any estate plan or financial plan.

A Will is a written document stating how your assets and money (the estate) are to be distributed when you pass on. The person making the Will is known as the Testator and those who inherit under the Will are called Beneficiaries. The Executor, nominated by the Testator, administers and distributes the estate upon the death of the Testator. A will can be drawn up as soon as you reach legal age, and can be changed at any time.

As an expatriate you are likely to have assets in at least your home country and your new location. You may also have to consider different jurisdictions if your partner was born in a country other than your own. These circumstances require wills that are valid and effective in all the countries that you are concerned with.

Living overseas also means that you normally leave behind the immediate support of your wider family. This can have real consequences for your survivors, particularly for your children who might be suddenly orphaned in a foreign country without anyone named to care for them from day one. If you do not have a legal guardian in place (as named in your will), then your children will remain in Singapore under social care until a court has granted legal guardianship to a member of one of the parent’s families which can be a long drawn out process. (See Temporary Guardianship section later).

A Will should be revised and updated to reflect big changes in your personal circumstances. It should be tailored to your current family and financial situation. Some of these changes may include:

financial planning Marriage

financial planning Divorce

financial planning Inheritance

financial planning Relocation

Benefits of writing a will:

financial planning To minimise stress at a difficult time.

financial planning To ensure the rightful allocation of estate.

financial planning To expedite legal process.

financial planning To prevent or reduce family dispute.

The Power of Attorney is a legal document created by one person who authorises another person to act on his/her behalf. In the context of Singapore, the creator of the document is known as the Donor and the person being entrusted to act is called the Donee.

The Power of Attorney is a crucial document when a crisis situation occurs after an accident or illness. When the donor is incapacitated to sign legal documents, the donee has decision-making powers over the donor’s property and financial affairs.

An important tool in estate planning, Trusts can help to protect your assets and pass them to another generation.

Trusts are agreements made by a Settlor to transfer money and assets into a separate legal structure. Trustees are appointed to hold the title to those assets for the Beneficiaries named in the Trust Deed.

A Settlor may enter into a Trust arrangement to gain one of more of the following benefits:

financial planning Protection of those assets from business and other creditors.

financial planning Removing assets from the estate of the Settlor to minimise death duties and other taxes

financial planning Simplifying the administration of the estate of the Settlor as the trust assets would not pass through the probate procedure and the Beneficiaries will have swifter access to those assets.

financial planning Assist those with mentally disabled family members to provide for their future financial protection throughout the latter’s lifetime.

financial planning Enable nationals from countries that place restrictions on the transfer of assets on death to make flexible provisions for their dependents during their lifetime.

It is important that Settlors receive professional advice before they commit to a Trust structure. AAM can refer clients to a specialist tax adviser who can assess your circumstances and advise on the Trust options and benefits.

Other Potential Benefits of a Trust:

financial planning Confidentiality

financial planning Preserving family assets

financial planning Continuing a family business

financial planning Protecting the weak

financial planning Gaining flexibility with your assets

As part of a sound financial plan, trusts may provide effective legal structures that may ensure your assets and estate are managed the way you would like.

.

As an expatriate, it is likely your nominated legal guardians for your children, named in your wills, do not live in Singapore. If your children are suddenly orphaned a delay will occur until the legal guardians arrive in the country and are able to take up their responsibility.

The Singapore authorities have a duty to take children into social care from day one, if something happens to both parents. They will remain there until a legal guardian is approved. It is not normal practice to leave the children with the carer.

It is possible to put in place a Temporary Guardianship to ensure that your children can remain in the care of someone they know and trust until the legal guardian can take over.

This is usually close neighbours and friends and can be nominated by way of a simple signed authority, a copy of which should be left with the nominated temporary guardian.

Disclaimer: The concept of trusts and wills covered here is intended to provide general information only and does not attempt to give advice that relates to your specific circumstances. AAM Advisory recommends that you seek professional tax and legal advice.