There are few things that are certain in life. Unfortunately, one of those things that everyone can be certain of is that we are all going to pass on someday. We looked it up and its true – nobody lives forever. What sometimes we don’t realise, however, is that part of us “lives” on after our death – our estate and our legacy
Our estate lives on after our death, and it can either be a source of protection and benefit in accordance with our wishes, or it can be a source of dispute and unhappiness.
Most of us work hard and make plans to provide for and take care of our loved ones and families. We buy houses, put away money, and take out insurance policies to ensure that no matter what happens to us, they will be provided for. Some of us also give back to society and contribute to charities and other social causes.
Now imagine a situation where suddenly, our ability to make and give effect to those plans is taken away from us. A situation where we cannot decide which of our loved ones may stay in our houses, or receive money from us.
As you may have guessed, that is what could happen when we die. In Singapore, if a person passes on without a will, his estate will be distributed in accordance with the Intestate Succession Act. The Intestate Succession Act only provides for default and very general rules as to how a person’s estate shall be distributed, which may not be how a person wishes to distribute his assets. For example, under the Act, when a married person passes on, his estate is distributed to his spouse and children (if any), only. This means that other loved ones like aged parents and siblings will not receive any portion of his estate.
Matters are further complicated if we pass on while our children are still minors. They cannot receive their inheritance directly, and appropriate guardians may not be readily available. As people get married later in life, the age gaps between them and their children are bigger than ever. Even if the children can legally hold property, inheriting a large estate at a young age can have a negative effect on them. For Singaporeans with Central Provident Fund monies, arrangements for the distribution of these monies ought to be made as well.
Since we put in so much effort to make plans to take care of our families and loved ones while we are alive, it makes sense to give thought and make sure that those plans continue after we are no longer alive. One way to avoid disputes and unhappiness over our estate after our passing is to make a will setting out specific instructions as to how our estate should be distributed or administered
It is the stark reality that families have been torn apart by disputes over inheritances, and what often happen is that while those disputes are being resolved the people who need the money most, aged dependents and children, have limited or no access to the money that they need.
Some of us may be fortunate enough to retain our mental faculties till the day we pass on, however there are some of those whom life does not accord such courtesies. Many of have heard of others suffuring from dementia or other mental illiness that strips a person of his mental capacity to a point where that person is unable to make decisions in his/her life. In such cases drafting a Lasting Power of Attorney would not only asssit you should such ailments befall you but also aliveiate any disputes on how you and your estate should be tended to.
A Lasting Power of Attorney (“LPA”) is a legal document which allows a person who is at least 21 years of age, to voluntarily appoint one or more persons, to make decisions and act on his behalf as his proxy decision maker if he should lose mental capacity one day. A donee(s) can be appointed to act in two broad areas: personal welfare as well as property & affairs matters.
By having a LPA drafted you will be able to set your mind at rest easy knowing full well that your personal welfare and your property & affair matters will be tended to in the manner that you wished. It also eases the burden on your family and friends who would be tending to you and your esate as they would not have to quarrell over how the conduct and care for you and your estate.
In our next article, we will explore some of the common misconceptions that people have about making wills and planning their estate. For example; that you have to be exceptionally wealthy before you do so, or that you are too young to think about these things.