No one wants to think about their death, especially not when one is in their prime, young and healthy. But as morbid as it might sound, there are certain things you should prepare for ahead of time, and one of these is your will.
Without a will, everything that you own, also known as your estate, will be distributed according to Singapore’s Intestate Succession Act.
Here, we look into what constitutes a will and its importance, the consequences of intestacy and the issues it might lead to, as well as how insurance and CPF nominations come into play when one dies.
First of all, what is a will?
A will is a legal document that officially records what will happen to your money, property, and possessions after your death.
You have the full authority to decide how your estate will be distributed after you die. The will can also state who and how your dependents will be looked after upon your demise and who you want to carry out your will (the executor).
To write a will, you must be:
- At least 21 years old
- Of sound mind
- Making the will voluntarily without being forced, coerced, or taken advantage of by someone else.
While you can write a will yourself, you are encouraged to consult a lawyer to draft the will to ensure that it is legally valid. This helps to minimise issues that could arise after your demise should someone step up to challenge the document.
Singapore’s Intestate Succession Act
Without a will, your estate will be distributed according to Singapore’s Intestate Succession Act.
The revised edition of Singapore’s Intestate Succession Act incorporates all amendments up to and including 1 December 2021 and came into effect on 31 December 2021.
However, there is one important thing to note. As stated in the Act, “nothing in this Act shall apply to the estate of any Muslim or shall affect any rules of the Muslim law in respect of the distribution of the estate of any such person.”
That is because Muslims who live in Singapore are required to have their intestate property administered under faraid, the Islamic law on inheritance.
The Act also clarifies that a “child” refers to “a legitimate child and includes any child adopted by virtue of an order of court under any written law for the time being in force in Singapore, Malaysia or Brunei Darussalam”.
The Intestate Succession Act spells out the distribution of one’s estate as follows:
|Surviving Family Members||Who Gets What|
|Only spouse||Spouse takes the full estate.|
|Spouse and children||Spouse gets half of the estate, children get half of the estate in equal portions.|
|Only children||Children get the full estate in equal portions. Grandchildren can claim their parent’s share in equal portions if their parent is dead.|
|Spouse and parents||Spouse gets half of the estate, parents get half of the estate in equal portions.|
|Only parents||Parents get the full estate in equal portions.|
|Only siblings||Siblings get equal portions. Their children can claim their share for them in equal portions if they are deceased.|
|Only grandparents||Grandparents get the full estate in equal portions.|
|Only uncles and aunties||Uncles and aunties get the full estate in equal portions.|
|None||Government takes the full estate.|
Importance of a will
Perhaps the most important aspect of having a will is the ability and freedom to decide how your estate will be distributed upon your death.
If you have dependents such as young children or elderly parents, having a will can help to simplify the procedures of estate distribution after your death. This is especially important if the distribution according to intestacy laws is not what you have in mind.
For example, your spouse is financially self-reliant and you would rather leave your estate to your elderly parents. By intestacy laws, your estate will be given entirely to your spouse, leaving your parents out of the inheritance. Having a legally written will with specific distribution proportions can help to address this.
Moreover, while many assume that a spouse or siblings will help to look after your surviving dependents, there are also cases where family members refuse to, or are unable to take care of the dependents after one’s death.
In the absence of a will, the court will appoint a guardian to take care of your surviving children under 21 years old but that person might not be the best choice. If there are no guardians suitable, children below the age of 16 will be placed under the care of the Ministry of Family and Social Development according to the Children & Young Persons Act.
You can also indicate your wishes for burial and funeral arrangements in your will and the executor will fulfil these wishes.
A will ensures that your wishes are made known to your loved ones. Without it, family disputes over your estate could brew. With a legally drafted will, your surviving family members can sort out the asset distribution clearly without doubts.
What about existing insurance and CPF nominations?
It is important to declare your insurance policies when drafting a will. This helps the executor in identifying the policies that you have taken out while alive, and to contact the correct insurance company upon your death.
According to Income, a “valid will executed after a Revocable Nomination has been made and made known to the insurer will supersede the Revocable Nomination. However, the will must satisfy specific requirements under the Wills Act. For example, the will must provide for the disposition of all death benefits under the policy and it must specify the particulars of the policy.”
Hence, in the case of a revocable nomination, you should revoke the nomination using the insurance company’s form to simplify distribution procedures according to your will.
CPF nomination covers your CPF savings across your Ordinary Account (OA), Special Account (SA), Retirement Account (RA) and MediSave Account (MA). It also includes the CPF LIFE premium balance and the discounted Singtel shares you own.
CPF nomination does not include properties purchased using CPF monies, payouts from the Dependants’ Protection Scheme, and investments under the CPF Investment Scheme.
However, CPF savings cannot be included in your will. CPF Savings do not form your estate and are protected from any creditor claim on your outstanding debts.
Muslim inheritance law
It’s noteworthy to remember that Singapore’s Intestate Succession Act does not apply to Muslims. Instead, the property distribution of a deceased Muslim domiciled in Singapore at the time of death is governed by Muslim law and the Syariah Court in Singapore.
Muslim intestate law, faraid, is provided for under the Administration of Muslim Law Act (AMLA) and is administered by the Syariah Court in Singapore.
According to the Islamic Law of Inheritance, a valid will must be recorded, signed and dated with at least 2 male or more witnesses, and only a maximum of one-third can be willed away to non-faraidh beneficiaries.
Even when death seems far away, preparing a legally drafted will help to ease minds and minimise issues should something happen to one unexpectedly.
Take this as a reminder to check if you have made a CPF nomination. Reach out to your insurance advisor if you have purchased a life insurance policy to know more about making a nomination.
To know more about life insurance and insurance nomination, feel free to reach out to Team Planner Bee at firstname.lastname@example.org.