4 Estate Planning Mistakes Singaporeans Must Avoid

4 Estate Planning Mistakes Singaporeans Must Avoid

Singaporeans spend a huge chunk of their lives working to amass assets like property, stocks and cash. Singapore has one of the highest home ownership rates in the world, even if many people are actually cash poor. If you have any assets that are worth more than a pittance, estate planning is a must—you need to decide what is going to happen to them when you are gone.

Don’t just assume that everything will be divided fairly amongst your family members and everyone will be happy, or that you can just download a standard will off the Internet and keep it in your sock drawer. Here are a couple of estate planning mistakes many people make.

 

Not taking into account sibling fights

Sure, everyone wants to believe they have the perfect family. But the sad truth is that sibling fights over family assets are depressingly common. Think of your own elders and chances are there’s an uncle who’s estranged from the rest of the family. Or perhaps you’ve never met any of your relatives on your father’s side of the family because they’re no longer on speaking terms.

If you have kids, no matter how civil they are to each other now, make sure you take into account the possibility of conflict. Instead of simply saying your property is to be split equally amongst your kids, you might want to specify the circumstances under which it should be sold and how the proceeds are to be distributed. If you have multiple properties or classes of assets, you might consider distributing specific assets to specific family members, rather than just expecting them to split everything amongst themselves.

 

Forgetting to make a CPF nomination

One of Singaporeans’ favourite things to complain about is how their money gets held hostage by the CPF Board. When you pass away, your CPF monies can be paid out in cash (or into their CPF accounts, if you so choose) to anyone you nominate through the CPF Nomination scheme. Bear in mind that you cannot distribute your CPF monies to one or more persons in a will. If you don’t make a CPF nomination, your CPF money will be distributed to your family members as if you had never made a will.

All you have to do is visit a CPF Service Centre, fill in a form and sign it in front of one of the customer service guys. You can also change your CPF nomination at any time, so if you’re divorced and haven’t removed your nomination in the name of your ex-spouse, now is probably a good time to do so.

 

Getting tricked by undue influence

Like it or not, if you’ve got money, there’s a high chance there are unscrupulous people out there who’ll do anything to get their hands on it. Be very wary of anyone who constantly talks about your assets or who appears to be sucking up to you so that you’ll spend money on them. We all know what happened in the Yang Yin saga in which a Chinese tour guide got close to a rich elderly lady with the object of gaining control over her assets.

While a will that’s been made under the undue influence of another is not valid, many fall through the cracks, especially if you’re not exactly a billionaire and your family members do nothing to dispute it. When distributing your assets, it is thus necessary to keep a clear head and not get swept away by the machinations of another.

 

Not considering the need for a Lasting Power of Attorney

Sure, it’s not over till you’re dead, but at some point you might find yourself alive but unable to make decisions. We’re not trying to be morbid here, but conditions like dementia are on the rise in Singapore and a shocking 1 in 10 Singaporeans over 60 has dementia.

If there’s someone in your life you trust enough to make financial decisions for you when you can no longer make them for yourself, you might want to consider appointing them under a Lasting Power of Attorney. The LPOA allows you to appoint someone to make decisions for you if you lose your mental capacity. For instance, if you have children, you might want to enable your spouse to make financial decisions with your money in order to look after the kids should something happen to you.

Have you done any estate planning? Tell us about it in the comments!