Estate planning is the process of evaluating how a citizen’s assets will be maintained and thereby shifted to their beneficiaries following their demise.
Estate planning in Singapore refers to the process of evaluating how a citizen’s assets (till their death) will be maintained and thereby shifted to their beneficiaries following their demise. However, under Singapore law, inheritance tax or estate duties have been abolished under section 2A of the Estate Duty Act (EDA) on February 15, 2008.
Following this, Estate planning in Singapore has become redundant because one no longer needs to worry about planning their estates to reduce payable estate duties under the Singapore jurisdiction.
But generally, estate planning in Singapore is still essential for a smooth transition of wealth transfer. Unlike popular belief, estate planning in Singapore is not just for the affluent. Not having a properly structured estate plan in place can cause a lot of hassle and undue confusion among your beneficiary/s.
Estate planning in Singapore puts together all the details of instructions regarding your combined assets, accounts, guardianship wishes and so on. It is more thorough than wills, and you will be surprised how grateful your beneficiaries would be if you do your estate planning properly.
With the beginning of a new decade in 2021, here are some dynamic estate planning tools you can use for a smoother wealth transfer.
Putting A Team Together
It would be best to put together a team of people who advise you on your financial decisions, tax planning, and estate planning. Any good estate planning attorney in Singapore can help you with the entire process of mapping out a scheme personalised to your wishes.
Alternatively, you may wish to get separate experts for each of these, but the aim is to smoothly distribute your assets to the relevant people/organisations without any problems.
Estate planning in Singapore, like anywhere else, primarily involves nominating a beneficiary/s for your assets. But other than this primary step, you also need to assess the designations of your nominees periodically.
It is essential to have a great life transitioning step such as marriage, becoming a parent, or divorce. However, when it comes to those with more substantial wealth assets, prenuptial and postnups may play a role in the process.
Update Real Ownership of Asset
Generally, estate planning in Singapore entails that your property would pass on to the surviving spouse on the occasion of the other spouse’s death.
In case the property has joint ownership outside of marriage, the surviving owner would automatically assume rights. However, if you have other wishes regarding your property after your death, you need further legal counsel to update asset ownership.
Setting Up a Trust
If you have a large amount of assets to be distributed after your death, you may wish to set up a trust for avoiding probate or creating a will. A trustee needs to be appointed who will handle the assets of this trust after your death. You have to transfer the legal ownership of your assets (like your farmhouse) through this trust to avoid probate effectively.
There are also separate willing systems available for assets that do not legally fall under the trust umbrella, such as art collections, grandma’s jewellery or vehicles.
Long-Term Care Preparation
Estate planning in Singapore should be done so that any dependent beneficiary is cared for following your demise. For example, it may be so that a parent or partner requires long term care which cuts down from your assets designated initially to other beneficiaries. Seek legal counsel from your financial advisor in such a case.
Make sure to appoint a guardian for those dependent on your assets through this estate planning.
Pay Attention to Your Digital Assets
Estate planning in the 21st century also involves taking care of your digital assets, such as important documents and old family photos from social media or any digitised files.
No service provider can legally reveal or disclose your password to anyone, so there is a need to appoint a “digital fiduciary” within your estate plan in Singapore. This person would have the legal right to access your digital artefacts following your demise.