Tuesday, 16 June 2015

Have You Nominated Your Beneficiaries?


One thing that no one has ever escaped - death. *touchwood, the later the merrier. This is not a topic that many would like to discuss or even think about. Especially if your ethnic has this tradition and your parents and relatives will reprimand you for saying such topic.

Since life will end one day, how do we make sure what we have accumulated throughout our lifetime will be left behind to our loved ones? This is a very challenging topic, else we will not be paying money to lawyers to do up a will. 


I will brainstorm some of the common tangible assets that we own :

1) Insurance, annuity and endowment plans
2) CPF (Include CPF Life)
3) Property
4) Cash
5) Bond and Equity
6) Jewellery and valuables

Singapore has no estate duty. However, you will be surprised on the amount of work and money spent just to retrieve every asset that the deceased left behind. Before I write on each item, here is a quick help guide.

By default without a will, most of your assets will follow Intestate Succession Act. Note: If you don't like the way how the Act plan to distributes your assets, you may have to write a will or to do nomination for each of your asset. I am not a legal practitioner, so it will be best if you consult your legal expert and take my blog post as simply an awareness to act. I tried my best to gather the information online but this may not be complete or accurate without reading the context of each unique case.

Writing a will may cost you about $500 (Please do your due diligence to check the market rate). You can even plan across several scenarios of distributions. Please note that a will don't overwrite CPF nomination.

Insurance, annuity and endowment plans
This is easy but tedious if you have multiple insurance, annuity and endowment plans with different companies. You will have to request each company to send you their nomination forms. Companies may need you to name each policy with your desired beneficiaries. It is best that you have good agent(s) that can help you to coordinate these.

CPF (Include CPF Life)
There are some myths about CPF. An example : What happens if my nominees do not come forward immediately to claim my CPF monies after I pass away? Will the monies go to the Government?
Read this site: it explained very clearly : click here

Property

HDB guide: Click here (I think private property has similar arrangement, please check it out if you are concerned party).

Cash in Bank Account

Basically, the bank account will be freeze. Here is the guide I found from DBS website, click here

Bond and Equity
In Singapore, investment in equities and bonds are held and transacted through Central Depository (Pte) Ltd, commonly known as CDP. Therefore, if the investor passes away, the legal representative needs to settle the estate clearance process with CDP.

Upon knowing that the investor has died, the deceased person’s securities account will be updated to an estate account. The personal representative of the estate needs to extract a letter of administration or a grant of probate from the court, and present it to CDP in person. The other documents needed are the death certificate, asset schedule, and the personal representative identification card. Subsequently, a request to transfer the securities can be made.

It is not necessary to liquidate the securities. These securities can be transferred to the rightful beneficiaries according to the deceased person’s will or under the intestacy law. The personal representative will be notified once the transfers are completed.

There will be a transfer fee incurred per counter per transfer request.

If the grant of probate is extracted overseas, the foreign grant has to be resealed in Singapore Court.


If the personal representative is overseas, his signature has to be witnessed by the Notary Public, and the supporting documents have to be certified by the Notary Public before mailing to CDP.


Jewellery and Valuable
I think this is not a common problem unless there are expensive jewellery and collectors' items such as expensive watches and so on. If it is kept in a safe, I suspect it is similar to cash in bank.

If your beneficiaries are not administrative efficient or could understand English and have other challenges, you may want to do your planning before leaving this world (As if I know when is that day). This is too much work just by reading!

Enjoy your life!

Frugal Daddy






2 comments:

  1. Hi Frugal Daddy

    Do you know for bank account if it will go to the estate too after it freezes?

    ReplyDelete
  2. Hi Frugal Daddy

    Do you know for bank account if it will go to the estate too after it freezes?

    ReplyDelete