As the common saying goes, there are two certainties in life – taxes and death. Both will come, and most people try to avoid them to no avail.
Financial advisers persuade others to buy insurance policies, and many of these financial products are good and offer protection and assurance for those we leave behind. While there is a good portion of people who do not buy insurance, those who are prudent would buy policies that they need, including life insurance.
What is less talked about, and made, is a Will. Perhaps because there is no immediate loss, nor any monetary gain, to be had, people tend not to think about making a Will. However, here there are five unavoidable hard truths about a Will for you to consider.
1. It may take your loved ones longer to get access to their inheritance when you pass without a Will.
The pain of losing you does not stop after the funeral. Your loved ones will still need to handle your debts and distribute your assets. What many in Singapore do not know is that there is also a legal process to go about obtaining the assets.
In other words, in order for certain institutions such as banks and insurance companies to disburse your assets, your loved ones will need to obtain a court order. If there is no Will, the process to obtain such a court order can take up to a year. Compare this timeline to when there is a Will, which usually takes much less time to the tune of 2 – 6 months.
Why is this significant? Depending on whether your family requires your assets/money for their living expenses, the speed of which your family can obtain money from your estate can have a huge impact. Personally, I had a client whose deceased husband was the main breadwinner. The lengthened process of getting the deceased husband’s bank accounts and shares meant that the spouse and their young children have to make drastic lifestyle changes to make ends meet.
2. Dying without a Will restricts your children’s access to critical resources if they are below the age of 21.
More often than not, younger people do not make a Will. The hard truth is that life is unpredictable and we can pass at any time. When one passes without having made a Will, assets are distributed in accordance to the Intestate Succession Act. If there is a surviving spouse and children, the spouse will inherit 50% of the Deceased’s assets while the children will obtain the other 50% equally split amongst them. The Children’s share of the assets is held on trust for them until they turn 21. Under the Intestate Succession Act, step-children who are neither biological or adopted children of the Deceased are excluded from any inheritance.
Why is this significant? For young parents, it is prudent – and some might think critical – to make a Will to have arrangements made for the surviving spouse to have full access to the estate to provide for their young children. With rising costs of living, including costs for education, every penny can be an advantage for the child’s benefit. Furthermore, if you have stepchildren who are neither biologically nor legally adopted, they do not inherit any of your assets.
3. Your “nearly” ex-spouse is still entitled to your assets should you pass without a Will.
A divorce can be messy and proceedings can be dragged out if parties are fighting tooth and nail. There are two stages in a divorce: after the first stage, there is an interim judgment declaring that the marriage is dissolved. The divorce is only legally done after the Court gives it final judgment on the divorce and its ancillary matters such as division of matrimonial assets and custody and care and control of the children.
While a marriage revokes a prior Will, a divorce does not. It is also not unheard of that a party to the divorce dies before the final judgment is given. In such a case, the nearly ex-spouse is still a spouse and is entitled to the Deceased’s assets under the Law.
Why is this significant? Depending on whether parties intended for the nearly ex-spouse to still get the Deceased’s assets, it may be prudent for parties to do up a Will to distribute the assets according to their wishes. Especially for people with adult children, or people who are not divorced but spouses are actually with others, your assets may be better directed to others.
4. Not all children will be entitled to your assets, and some children will.
It is not uncommon to find that some have children not of their legal marriage. For some fathers, they may have children with others outside their marriage. Under the Intestate Succession Act, only legitimate children (children in one’s marriage, or via adoption) are entitled to one’s Estate.
On the flip side, there are some who are divorced and hardly have contact with their children for various reasons, including when the ex-spouse has moved away or restricted access. All legitimate children, and descendants of their children, are entitled to a share of their parent’s Estate.
Why is this significant? Depending on your history, and how you want your assets to be distributed after your death, you may wish to either make arrangements for certain children to have a share of your Estate, or to block certain children from claiming a share. Having a clearly drafted Will will enable your executor to distribute your assets according to your wishes and prevent unnecessary disputes.
5. Your loved ones may have issues locating your assets without you leaving a Will.
In this age of financial literacy, you may have multiple bank accounts, trading accounts on trading platforms, stocks and shares in listed and/or private companies, mutual funds, and multiple insurance policies. While you may have great financial acumen, your family may not always know where your assets are located. Without knowing where your assets are, your loved ones may have to expend costs to discover them, or miss out on the fruits of your labour.
Why is this significant? If you loved ones are unaware of your assets, they may be unwilling to expend costs, or simply miss out on their rightful share. When you make a Will, you can make clear what your assets are and communicate to your loved ones what assets you have so that they do not have to waste precious time and money to locate them.
Do your loved ones a favour – make a Will.
The uncomfortable truth with putting off making a Will is that we are essentially doing our loved ones a disservice. Dealing with your passing is already hard enough, but dealing with life after your passing can be made better by you when you make a Will. Making even just a simple Will saves your family time and money when obtaining your assets for their use – time that is especially precious if your family depends on your assets to maintain a certain standard of living.
If you require legal assistance to make a Will, contact Johnathan Lee at legal@fongllc.com or via text at 8500 1003. Make a simple Will with us at $400.
Quote code “iamready” for an immediate 10% discount.