Writing a Will: Why Is It Important Apart From Allocation of Assets?
Don't overlook the importance of making a will.
Some may assume that writing a will is only necessary for the rich and famous. For better or worse, this is not always the case. Whether a person has immense wealth or just a modest bank account, having a will and testament is actually useful. First of all, a will ensures a clear distribution of assets to the correct beneficiaries without delays. Additionally, it can even prevent the risk of losing the assets to those who are not supposed to receive them. With Singaporeans becoming more affluent, the need for will making has become increasingly important. Especially for those with family, a detailed will assures aged parents, spouses, and children will not be faced with complicated statutory issues that prevent them from receiving what was intended to be given to them.
Importance of Making a Will
Besides the allocation of assets, making a will is important to legally protect your family, reduce the chances of family conflicts, and to make sure that funeral arrangements are communicated. Many people overlook the importance of making a will because they are simply unaware of the complications that their family might face, if they do not write their will.
Who Inherits When There is No Will?
When an individual does not create a will and testament, their assets will be distributed according to the Rules of Distribution stated in the Intestate Succession Act (Chapter 146). These rules spell out specific methods of distributing assets if a person passes away without leaving a will, in other words, the family will not be able to refute the allocations of the estate.
According to the Rules of Distribution, assets will only be distributed to family, spouse, children, and relatives with priority given to spouse and children. The following gives an overview of the 9 rules stated in the Act:
To reiterate Rule 9, the Act states that when distribution rules cannot be met, the Government shall be entitled to the whole of the estate. This implies that there is no option for the assets to be channelled to friends or even charities. Also, please note that this law does not apply to the estate of any Muslim. The estate for these individuals will be allocated based on the rules of the Muslim law.
What Happens to the Central Provident Fund (CPF)?
Essentially, CPF funds are not covered under a will because they do not form part of an estate (assets and debts), an additional CPF nominations to be made to distribute the CPF amount according to a person’s decision.
What will happen to the CPF savings then? Like assets, the CPF funds of an intestate will be transferred to the Public Trustee’s Office (PTO) and distributed according to the rules in the Intestate Succession Act if no will was made prior to the person’s passing. Additionally, the PTO charges a fee for the administration and distribution of the un-nominated savings. The fees are based on the amount of CPF monies and they start from S$15.
Am I Eligible to Write a Will?
Any person of 21 years and above is eligible to make a will in Singapore. Typically, for a will to be executed legally, it must be written in accordance with the State Law and must be signed by the testator (a person who has made a will) and witnessed by at least two witnesses who are neither beneficiaries nor spouses of beneficiaries. These witnesses must also endorse the will for it to be valid.
How Much Does It Cost to Write a Will?
The cost of writing a will varies across different service providers. There are free options such as the OCBC’s online will writing service. This free online tool generates your own custom will. Those seeking a more comprehensive service might consider NTUC Income’s will writing services that range from S$240 to S$460. This service includes advisory, will drafting by certified issuers and two witnesses to endorse the will.
The cost of making a will through a lawyer in Singapore varies from S$200 to S$500. However, the costs might escalate with the complexity of the will. For example, some testators may have overseas assets or a large estate that requires extensive paperwork that goes beyond basic will writing. In such cases, hiring professional legal help will be more costly but also more appropriate for the value involved.
Simple Solution to a Complication Issue
Talking about after-death arrangements is often a taboo subject in Asian culture. However, preparing a detailed will is essential for avoiding tricky estate succession issues that can snowball into financial problems or family feuds. Do not assume that your assets are too small to make a will, or that your loved ones know exactly how you want your estate to be divided. Preparing a will is a straightforward affair that can sort out these matters seamlessly, and help your family ride through difficult times with fewer complications.
This article was first published on Value Champion and republished on theAsianparent with permission.