Do you know that there are two ways to die in Singapore?
One is to die testate –with a will and another is to die intestate – without a will.
When you die without a will, your assets will be distributed via the Intestate Succession Act, which depends greatly on whether you are single or married and whether you have any children.
One great misconception is that when a person dies without a will, the spouse will automatically inherit everything. This is not necessarily true.
Watch this video as Christopher Tan, CEO of Providend, shares the distribution rules of intestate estates and the importance of having a proper will done.
Hello, everybody. Welcome to our video series on wealth management.
Today, we’re going to share a little bit more about estate planning. What is estate planning? It is really about how you distribute your assets, manage your assets upon your unfortunate demise.
Do you know that there are two ways to die in Singapore? One is that you die testate, and that is you die with a will. And the other way, of course, is you die intestate which is you die without leaving a will.
And so what happens to your assets when you die without a will? Now, in Singapore, thankfully, if we die without a will, your assets will be distributed via the Intestate Succession Act, which is the legal process of distributing our assets to our beneficiaries.
So what is the Intestate Succession Act? Let’s take a look.
So before we understand the Intestate Succession Act, there is a term that we need to understand. And that term is “issue”. And by issue, we mean a child, whether is legitimately or legally adopted and the descendents of a deceased’s child.
With that understanding, let’s understand what happens if you die without a will and that your assets are being distributed by Intestate Succession Act.
So if you die leaving behind spouse only, with no issue, no parents, then your spouse will take all your assets.
If you leave behind spouse and issue, your spouse will take half and your issue will share half equally. If only one issue, then your issue will take the full half.
Now, if you leave behind spouse with your parents but with no issue, then your spouse takes half, your parents will share half equally. If you have only one parent left, then your parent will take the full half.
How about only leaving brothers and sisters and their children? And you have no spouse, no issue and no parents. Then your brothers and sisters will share all equally. And where any sibling has already died, that particular sibling’s children will take the share equally.
And if you leave behind grandparents, with no spouse, no issue, no parents, no brothers and sisters or their children, then your grandparents will share all equally.
And if you will leave behind only uncles and aunts with no spouse, no issue, no parents, no siblings, no children, and no grandparents, then your uncles and aunts share all equally.
And if you leave behind no one, and it is only then that the Government will get all your assets.
Some of us will look at the Intestate Succession Act and say, “It’s OK. That’s the way I want to distribute my assets anyway”.
But the problem with living our assets to be distributed via the Intestate Succession Act is that firstly, it takes a lot longer to distribute your assets. Secondly, it might be a lot more costly legally to do that. And last but not least, you might not be really distributing your assets according to your own wishes.
Now, what do I mean? Maybe let me share an example. Now I have a client whom recently her mother passed away, leaving behind her husband and two children and a deceased daughter and without a will. And they were quite shocked to find out later on from the lawyers that the father, which is my client’s father, will get 50% of the asset. My client and the brother, both of them will share 2/3 of the asset and the 1/3 of the asset will actually go to their deceased sister’s children. Now, not that they are fighting over that asset, but they are just wondering whether that was really the mother’s wish.
And so, if we leave behind our estate without a will, potentially, we might be leaving our assets and distributing it in a way whereby it is not exactly our wish. And to make matters clearer, it is always better to write a will.
So as you can see, it is very important for you and your spouse to plan for your assets upon your unfortunate demise. This is part of your overall wealth management. And this is called estate planning.
There are really three purposes for estate planning. Firstly, you want to make sure that whatever you leave behind for your family, it goes to them with minimal leakages. Secondly, you want to make sure that you leave behind enough assets for them so that they can continue with their lifestyle. And last but not least, you want to make sure that it goes to your intended beneficiaries.
Thank you very much for watching. And I hope that you have found this video to be helpful. If there are any questions that you might have or if there’s some advice that you might need, please feel free to reach out to us.
We do not charge a fee at the first consultation meeting. If you would like an honest second opinion on your current estate plan, investment portfolio, financial and/or retirement plan, make an appointment with us today.