4 Reasons You Need an Estate Plan in Singapore

You live in a leasehold HDB flat, and you don’t possess millions of dollars in assets. By all accounts, you don’t really have much in terms of fortune—the type that is possessed by the crazy-rich scions of wealthy families and the kind that is romanticised in movies and TV shows. So why exactly should you have an estate plan when it looks like it’s going to be a walk in the park disposing of your assets anyway when the time finally comes for you to bite the dust?

There are several important benefits to having an estate plan in Singapore. In this short guide, we’ll quickly go through some of them.

Estate Planning Will Allow You to Dispose of Your Assets According to Your Wishes

The quick answer to the question of why estate planning is important is quite simple: it is a legal and effective method of making arrangements to manage your estate and financial affairs when you pass on. If you don’t have a will, a trust, or a lasting power of attorney, your assets will be distributed according to Singapore’s intestacy laws, supplanting your actual wishes on how you may have wanted them disposed of.

Imagine the amount of frustration and heartache your loved ones may have to go through when it is the state that gets to have the final say about what to do with the assets you leave behind. Designating your beneficiaries and appointing “attorneys” who can act on your behalf can save your family members the time, money, and aggravation while ensuring that your estate is distributed exactly in the manner that you desire.

An Estate Plan Takes Care of Your Dependents

We’ve already established that estate planning benefits not only the rich; it also benefits just about every other person of legal age in Singapore. However, it’s most especially advantageous to those with dependants, like children, elderly parents, or family members with disabilities.

This is the most important element of estate planning: designating your heirs no matter how much or how little you might have. You get to have a say what happens to your savings, investments, and real properties should something happen to you. You’re able to make sure that your loved ones are taken care of and that they will benefit from the wealth you’ve accumulated specifically for the purpose of providing for them in the first place.

Estate planning will also allow you to determine what happens to your CPF savings after your death. Because CPF savings—like the balances you might leave behind in your Ordinary, Medisave and Special or Retirement Accounts—are not considered part of your estate, it is important for you to make a CPF nomination. Otherwise, your CPF savings will be transferred to the Public Trustee’s Office (PTO), which will then distribute your assets to your family depending on how they see fit. This will be done according to the Intestate Succession Act Singapore citizens abide by.

Creating an Estate Plan Also Helps You Prepare for Your Own Needs

It’s true that an estate plan allows you to elect your heirs when you pass away, but did you know that estate planning can also help you prepare for your own needs in the event that you lose your mental capacity or become unable to make decisions for yourself?

Estate planning can help you appoint people you trust to act on your behalf through a legal document called a Lasting Power of Attorney (LPA). Doing so will allow you to safeguard your interests and give you peace of mind, knowing that your loved ones can make decisions for you should you ever lose your ability to make financial and legal decisions while you are still alive.

Take note that members of your family are not automatically given the right to legally act on your behalf, a fact that can hinder their ability to look after your needs. Only an LPA can make sure that they will be able to manage your estate legally and make arrangements for your everyday care.

Estate Planning Will Prevent Conflicts from Erupting within Your Family

What’s worse than dying and not having a say in whether or not the people you love will benefit from the estate you leave behind? It’s probably dying and having members of your family fight over your money and properties. It’s the kind of drama that you’ve probably seen somewhere on television before, one that can get really ugly and leave you rolling over in your grave.

Creating an estate plan allows you to preemptively terminate such conflicts. By designating who is legally responsible for your assets when you become mentally incapcitated, or by deciding how much each of your heirs will get when you pass away, there will be no room for strife to occur. You’ll also be able to prevent any relatives you might hate with a passion from even attempting to get a share of the pie, which is probably one of the most desireable benefits of protecting your assets with an estate plan.

Estate planning is not just the domain of the rich and the powerful in Singapore. Anyone with any amount of assets will benefit from the protection that a well-thought-out and well-executed estate plan brings. It can be a complex and challenging process, but it’s a necessary one that will make your family more ready to face the uncertainties of a future without you.

 

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Businessman loses litigation against kids over gold bars passed on to them

gold bars

A retired Indonesian-Chinese businessman, Mr Soemarto Sulistio, challenged four of his children to return his wife’s 122 gold bars but lost his lawsuit here in the High Court.

The story goes something like that. In 1989, Mr Sulistio and his wife Soemiati purchased gold bars using their joint account at the United Overseas Bank in Singapore.

At first, the couples kept the gold bars under both their names. But Mr Sulistio, now 87, signed documents to pass possession to his wife in 2016. In 2017, she passed away. He later learned that she had willed the gold bars to four of their five children.

Sued his children following an unsuccessful challenge to the will
sued in court

Image Credits: The Australian

He sued the four after a failed appeal to her will in Hong Kong. The signing of the documents did not modify the original intention to preserve the gold bars as joint possessions, Mr Sulistio said.

He asserted that he was the rightful owner of the gold bars, as the sole survivor. But Justice Valerie Thean rejected his claims.

The judge claimed in a written decision that there was no doubt that the pair originally had a collective goal of possessing the gold bars for their mutual good. However, she noticed that there was enough convincing evidence of a shift in their aim in 2016.

Signing of certificates as part of a wider agreement

Justice Thean discovered that as a component of a larger deal between the pair, Mr Sulistio endorsed the documents. It turns out that Madam Soemiati had requested for the gold bars in return for having their son Rudy to handle their Indonesian territory.

Mr Rudy was left out of the will of Madam Soemiati and came to the defence of his father in the lawsuit.

According to the judge, Madam Soemiati wanted to possess the gold bars for her interests. That is, if she were to pass on without using the gold bars, she would like to favour the defendants.

The couple’s marriage broke down in 2012
rose gold wedding bands

Image Credits: The Wedding Vow

In the 1950s, Mr Sulistio and Madam Soemiati were married and had three daughters and two sons. They stayed in Hong Kong as a couple.

Their daughters said their parents’ relationship deteriorated in 2012. It was partly because of the strained relationship between Madam Soemiati and Mr Sulistio’s nurse. Their eldest daughter suggested that Madam Soemiati was disappointed that the nurse bullied her, but Mr Sulistio did little to rectify the issue.

An attempt to guarantee her financial security

The court acknowledged the defendants’ allegation that the gold bars’ legal movement was part of an arrangement under which Madam Soemiati sought to ensure her financial stability.

Madam Soemiati, who was severely ill with increasing medical costs, was worried that her savings were depleted. This was due to vast amounts of money moved from joint accounts with her spouse to Mr Rudy.

Mr Rudy also did not dispute the acquisition of roughly US$7.2 million (S$9.5 million) between 2010 and 2016. Furthermore, according to the verdict, at least US$1 million remains unsubstantiated for.

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What On Earth Is A Fiduciary?

DEFINE

Recently, my significant other opened the idea of discussing about whether it is worth getting a fiduciary and a financial adviser. I focused on the former. A fiduciary’s duties and responsibilities goes beyond directing the individual (i.e., beneficiary) to his or her financial goals. The fiduciary acts for or on behalf of the beneficiary in certain circumstances. This is a bond established by utmost confidence and trust.

A fiduciary is either a person or an organization who has the highest legal duty of being ethically bound to act in the beneficiary’s best interest. Fiduciary relationships include:

* Trustees (of a beneficiary);
* Directors (of a company);
* Agents (of a principal);
* Lawyers (to the client); and
* Partners (to each other).

Aside from this, the Courts may find a fiduciary relationship exists when the beneficiary is dependent on the fiduciary, when the fiduciary has the discretion to act unilaterally for the beneficiary, and when such power affects the beneficiary’s legal or practical interests.

Do you qualify for any of these? Are you a fiduciary? If so, here are your duties.

DUTIES

#1: First and foremost, the fiduciary needs to avoid conflict of interest and duty. For example, a company director must not put himself or herself in a position where personal interest will conflict with that of the company’s. Do everything in good faith.

#2: Secondly, you must avoid unauthorized profits. For example, your position as a company director may be in breach of your duty if you acquire a business opportunity (i.e., belonging to the company) for yourself.

#3: Lastly, the fiduciary must manage the assets of an individual for the benefits of the beneficiary himself or herself. You cannot benefit personally from the management of the beneficiary’s assets.

LAW

According to research, Singapore is part of the common law legal tradition. Thus, the decisions of precedent cases in the superior courts are binding on the lower courts. Moreover, the decisions in other Commonwealth jurisdictions (e.g., in UK, Australia, or Malaysia) can be persuasive in the Singapore courts.

Image Credits: pixabay.com

“When a fiduciary relationship is established in one of these cases, future cases are bound to follow what has been established before. Statutes that are passed by Parliament may also impose certain statutory duties akin to fiduciary duties between parties.”

Consult legal agents to know more.

Sources: 1 & 2

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15 minutes to a lower tax bill and smooth Tax Season 2019 (1 Mar – 18 Apr 2019)

Lower your tax bill by maximising the tax reliefs available to you, and pick up some tax filing tips for a smooth tax season.

Tax season 2019 has begun, and like most Singaporeans, you may once again be required to file your taxes this year. From filing your taxes to utilising the tax reliefs at hand, here’s a quick way to a breezy tax season.

5 minutes: Find out if you are required to file your taxes this year

To file your taxes or preview your Notice of Assessment, log in to https://mytax.iras.gov.sg using your SingPass.

10 minutes: Edit your tax return and claim the tax reliefs available to you

Your income information may have already been pre-filled in your tax return if your employer is under the Auto-Inclusion Scheme. This means that your employer submits your income information to IRAS on behalf of you. However, if you received additional income in 2018 or spot an error in your tax return, hit ’Yes, I need to edit my Tax Form’ to ensure that these are reflected in your return.

Tax reliefs and deductions are targeted at certain groups of people to encourage social and economic objectives, such as filial piety and the advancement of skills. If you are eligible for any of the tax reliefs below, be sure to make your claims for them in your tax return for a lower tax bill!

Find out more about the tax reliefs – the qualifying conditions and claim amounts – at https://www.iras.gov.sg/irashome/TaxSeason2019/

And you’re done for the year!

When you’re ready, hit Submit before logging out. An acknowledgment message will be displayed upon successful submission of your tax return. Your tax bill will be sent to you between end Apr and Sep 2019. In the meantime, sign up for GIRO if you have yet to for a hassle-free tax payment experience.

Remember, file your taxes at myTax Portal by 18 Apr 2019 to avoid the last-minute rush and late filing penalties.

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Ultimate Guide To Singapore Taxing System

Aside from its undeniable cleanliness and thriving economy, foreign investors see Singapore as a country with an attractive corporate and personal tax rates. The Singapore taxing system is widely known for its tax relief measures, absence of capital gains tax, one-tier tax system, and extensive double tax treaties. What keeps this system going?

To answer that question, we must dive in to different types of taxes.

INDIVIDUAL INCOME TAX

As the name suggests, the individual income tax is imposed on a person following his or her total income. The extent to which a person pays for depends on one’s status in Singapore. At the time of assessment, the government may consider you as a taxpaying resident or a taxpaying non-resident. For residents, the tax rates begin at 0% and are capped at 22% (above S$320,000). For non-residents, the flat rate is 15% to 22%.

CORPORATE TAX

The corporate tax is imposed on a company following its profit or net income. Net income refers to the difference between the total expenses, receipts, and additional reductions in the book value of an asset. You have to understand that a company will only be taxed if the income is generated from Singapore or generated from overseas and received in Singapore.

What’s more? The corporate tax operates on a one-tier system and caps at 17%. By keeping corporate tax rates competitive, the country continues to attract a significant share of foreign investment.

PROPERTY TAX

It comes as no surprise that all property owners in Singapore are subject to Property Tax. It is imposed on property owners based on the expected rental values of their properties. It is levied on the unmovable properties such as buildings and lands. It is pretty much clear cut from here.

GOODS AND SERVICE TAX

Last but not the least is the type of task that we tackle on a daily basis – the Goods and Service Tax (GST). It is an indirect tax levied on the price of goods and services in the country.

GST was introduced in 1994 at a rate of 3%. Years have passed and the rate has been steady at 7%. Imported goods sold in Singapore follow the same GST rate too!

Image Credits: pixabay.com

Use these information to enrich your savvy consumer skills! ?

Sources : 1 & 2

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