3 Easy (and Free!) Steps to Kick-Start Your Estate Planning in Singapore

Introduction

Thinking about estate planning might seem daunting, but it’s really just about making sure your stuff goes where you want it to after you’re gone. In our work with clients, we've encountered numerous situations where estate planning would have made a significant difference. Estate planning is often avoided because it seems complicated and overwhelming, and it’s easy for us to miss its full impact. What’s particularly striking is that the issues we’ve seen were often the result of others' failure to make proper arrangements, which ended up affecting our clients directly.

The good news? In Singapore, you can get started with three key steps that won’t cost you a cent. These steps are making CPF nominations, setting up insurance nominations, and writing a Lasting Power of Attorney (LPA). Here’s a simple guide to help you secure your financial legacy and make things easier for your loved ones.

1. Making Your CPF Nominations

The first step in estate planning is sorting out your CPF (Central Provident Fund) nominations. This is all about deciding who gets your CPF savings when you’re no longer around. It’s a straightforward way to make sure your money goes to the right people and not get stuck in a legal mess.

• Why CPF Nominations Matter: If you don’t make a nomination, your CPF savings will be handed out according to the Interstate Succession Act. This default method might not match your wishes and could lead to delays and extra stress for your family during a tough time.

• How to Make Your CPF Nominations:

  • Fill Out the CPF Nomination Form (Form CPF NOM-1): You can grab this form from the CPF Board or download it from their website. You’ll need to list your nominees, their ID numbers, and how much of your CPF savings you want to give to each person.

  • Go Online (What most people do): For a quicker process, use the CPF Services Portal to submit your nomination online. Double-check everything to make sure your nomination is valid.

• Things to Keep in Mind: If you’re nominating minors, you’ll need to appoint a trustee to manage the funds until they turn 21. Also, remember to review and update your nominations if your life changes—like getting married, having kids, or going through a divorce. For complex issues, you might want to speak with a trusted licensed estate planning practitioner.

2. Setting Up Your Insurance Nominations

Next, let’s make sure your insurance benefits get to the right people by setting up your insurance nominations. This is a crucial step to ensure that your loved ones receive the financial support you intended for them.

Insurance nominations are essential because they determine how quickly your benefits are distributed. When you have your nominations in place, the payouts can be processed in just days or weeks. But if you don’t set them up, the process can become complicated and slow, potentially tying up the benefits in your estate for months. This can create unnecessary stress for your family during a difficult time.

Types of Insurance Nominations:

• Revocable Nomination: This gives you the flexibility to change your beneficiaries whenever you need. It’s perfect if your circumstances or preferences change over time.

• Irrevocable Nomination: Once set, this nomination can’t be altered without the beneficiaries’ consent. While it provides more certainty, it’s less flexible if you need to make changes later.

How to Make Insurance Nominations:

• Get the Nomination of Beneficiaries Form: Request this form from your insurance provider. It will ask for details about your beneficiaries, such as their names, ID numbers, and your relationship to them.

• Submit the Form: Once you’ve filled it out, send it back to your insurer. They’ll update their records to reflect your wishes.

Common Concerns: Remember to update your nominations whenever significant life events occur. And in Singapore, insurance payouts are not subject to estate duty, which is a great benefit for your beneficiaries.

By taking these simple steps now, you ensure that your insurance policies provide the timely support they’re meant to, giving your loved ones the financial stability they need without added complications.

3. Writing Up a Lasting Power of Attorney (LPA)

Finally, consider creating a Lasting Power of Attorney (LPA). This document lets you appoint someone to take care of your affairs if you’re no longer able to manage them yourself.

• Choosing Your Donees: Pick people you trust and who have shown they can handle important matters wisely. Clearly outline what powers you’re giving them, like managing your finances or making healthcare decisions.

• Legal Steps:

  • Sign the LPA: Both you and your donees need to sign the document in front of a certificate issuer—this could be a doctor, lawyer, or psychiatrist. This step confirms that you understand the LPA and aren’t under any pressure.

  • Register with the Office of the Public Guardian: Submit your LPA for registration to make it official. This ensures it’s recognized and can be used when needed.

• Practical Tips: The LPA registration fee is usually low, and currently the government has waived it. Some professionals might even assist with this on a voluntary basis. Do get in touch with us should this be relevant!

Conclusion

Getting started with estate planning doesn’t have to be overwhelming or expensive. By making CPF nominations, setting up insurance nominations, and creating a Lasting Power of Attorney, you can take important steps to ensure your assets are handled according to your wishes and help your loved ones. For more complex needs, it might be worth seeking professional advice to build a comprehensive plan that fits your situation. If we may be of help, do feel free to reach out to any of us!

Disclaimer:
The content provided on this blog is intended to be as factual as possible. However, should any portion appear to express an opinion, please understand that it is not financial advice. The information shared here reflects our personal views and does not represent the opinions of any specific company or organization. We strongly encourage you to consult with a qualified and trusted financial advisor before making any financial decisions, as the content may not be suitable for your individual circumstances, and we do not guarantee its accuracy or completeness.