What Happens To Your Finances When You Die In Singapore?

Technically speaking, all the monetary value that the deceased left behind belongs to his or her estate. This estate includes bank accounts, investments, and properties. The only exceptions are the assets held in the trust and the individual’s CPF money.

All the assets will be frozen once a person passes away. The professional assigned to go through the departed’s Will is known as an executor. An executor is usually a family lawyer or a trusted relative. He or she applies to be granted probate, which is a court order empowering the executor to settle all the remaining assets.

Say that the deceased did not make a legitimate Will and has an estate of about S$50,000. The surviving family members may go to the Public Trustee for them to divide the assets according to the Intestate Succession Act.

Image Credits: pixabay.com

This is why it is recommended to write your own Will while you are still alive. In fact, a straightforward online tool that can help you with that is called the WillMaker. It costs about S$89.

WILL YOU BE LIABLE FOR THE DECEASED’S DEBTS?

After the funeral costs are sorted out, the executor will liquefy the estate to pay off the deceased’s outstanding debts. Outstanding debts encompass the unpaid taxes, mortgages, credit card bills, utility bills, and so on. When the court is satisfied with all the debt payments, the remaining assets can be distributed to the beneficiaries according to the Will.

You are fortunate to know that the surviving family members are not legally responsible for the debts left behind by the deceased in Singapore. A surviving family member will only be held liable for the debts, if they have a joint loan account with the deceased.

Image Credits: pixabay.com

Now, let us move on to the HDB flat left behind. HDB homeowners have a signed a mandatory insurance known as the Home Protection Scheme (HPS). This insurance protects families from losing their HDB flats in the event of death, total permanent disability, and terminal illness. HPS insures members up to age 65 or until the housing loans are paid.

Sources: 1 & 2

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Should you DIY or pay someone to draft your will in Singapore?

It’s a misconception in Singapore that it’s necessary to hire a lawyer to draft a will. Nothing could be further from the truth. Anybody can draft a will for you. In fact, if necessary, you can even write your own will, and it can be a perfectly valid will after you pass on.

While drafting wills does tend to lie within the domain of most estate-planning lawyers, many wills-drafting companies have also sprung up to service these needs. These companies usually don’t have any lawyers or even anyone legally trained but they survive by keeping themselves up to date on the existing law and marketing themselves heavily.

However, just because you can write your own will without having to spend a single cent doesn’t necessarily mean you should DIY. While it’s not impossible for the determined layman to pick up, there are a number of statutes and laws to get your head around if you want to make sure your will is drafted correctly.

You might want to take a look at this will-drafting guide if you’d like to draft your own will.

At the very least, you should be conversant with the Wills Act (Chapter 352) before embarking on writing your own will.

Advantages and Disadvantages of Drafting your own Will

Advantages

  1. There’ll be zero costs as you’ll be drafting the will yourself. All you need is a pen (or more likely, a word processor).
  2. There’s the added benefit of learning and picking up a new skillset.
  3. Anytime you need to update your will, you won’t have to make an appointment with a lawyer or will-drafting company. You can just do it yourself.

Disadvantages

  1. Exclusions will not be caught. It’s relatively easy to miss out on certain beneficiaries in a will. Someone who drafts your will, be it a lawyer or someone from a will-drafting company, will usually review your list of beneficiaries and ask you in-depth questions to make sure your will is an accurate representation of how you want your assets to be distributed in the event you pass on.
  2. There’s a higher propensity for error. It’s more difficult for someone without legal training and experience in wills and probate law to be able to perfectly draft a will. There are numerous grey areas in the law that a layman might completely miss out on or misinterpret.

Advantages and Disadvantages of Paying someone to Draft your Will

Advantages

  1. It’s relatively affordable to hire someone to draft a will for you nowadays. Simple wills tend to start from around $180. Complex wills can be more expensive but if you have a lot of assets in different countries, you probably won’t want to be drafting your own will as well.
  2. Hiring someone to draft your will ensures peace of mind, particularly if you’ve hired a lawyer to write your will. There’ll be less chance that a beneficiary will contest probate in the event of your passing and you’ll feel more assured that there won’t be errors in the will.
  3. Most estate-planning lawyers in Singapore can advise you on the whole estate-planning process, as opposed to merely the drafting of the will. Your lawyer can also assist you with getting a Lasting Power of Attorney and help your executors with extracting the Grant of Probate upon your passing.

Disadvantages

  1. You’ll have to incur costs to get peace of mind. While the price of having a will drafted is relatively cheap, you do still have to pay for it.

Conclusion:

There’s no real right or wrong answer here. If you’re willing to spend the time and effort to learn the relevant laws and statutes surrounding wills, it can be a fruitful exercise to write your own will.

However, if you’re not willing (or unable) to spend the time to pick up will-drafting, it’s probably in your best interest to go to a professional will drafter, preferably a lawyer. The last thing anyone needs is a will riddled with errors. A DIY will that’s poorly drafted can save you money in the short term but create a mess for your heirs when you’re gone.

Author Profile:

Shen is a writer for Singapore Probate, a website where Singaporeans can learn more about estate-planning matters in Singapore.

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5 Reasons to Create a Will in Singapore

While there has been an increase in the number of younger people making wills in Singapore [1], there still seems to be a lingering taboo over the creation of something Singaporeans perceive to be morbid.

Unfortunately, as the saying goes, nothing is sure in life except death and taxes, and we all need to realize this fact and plan ahead for the future.

Generally, it tends to be a good idea for anyone to create a will. However, it’s even more important in certain situations, such as when you’re married with children, a single parent or blessed with multiple valuable assets.

So without further ado, here are 5 reasons why you should create your Singapore will.

1) To determine who receives your assets.

Generally, if you’re a Non-muslim in Singapore, and wish to distribute your estate in accordance with your wishes, you will have to create a will. If you don’t do so, your estate will be distributed according to the Intestate Succession Act, and this may unfortunately go against your true wishes.

2) To make things easier for your family.

Creating a will helps establish who will take care of the relevant arrangements after you pass on and prevents unnecessary delay and grief during a painful period of time. When you create a will, a person you choose called the executor will apply for the grant of probate and handle the necessary arrangements, which helps minimize any confusion over which member of your family will have to settle your estate after you pass on.

3) To arrange for funeral arrangements and costs.

You may have preferences as to where you wish your funeral to be held, the type of casket and picture you wish to be used, whether you wish to be buried in Choa Chu Kang or cremated, and how you wish for these expenses to be covered. Providing for this in your will can help save your family additional stress from trying to figure out what your preferences would be.

4) Prices are not high.

Many Singaporeans put off having a will written because they’re put off by high prices. However, prices for the drafting of wills in Singapore have fallen throughout the years. Competition between wills-drafting providers and lawyers have made it such that you can have a will drafted for a fraction of the price as you would have paid just a few short years ago.

5) To provide for charitable causes.

Altruism is another reason to draft a will in Singapore. You may be passionate about certain causes and wish to set aside a portion of your wealth for charitable organizations you wish to support. This is a fantastic way to give back to the community and to ensure a portion of your funds is used for a good cause.

Author Profile:

Shen is a writer for Singapore Probate, a website where Singaporeans can learn more about estate-planning matters in Singapore.

[1] http://www.channelnewsasia.com/news/singapore/increase-in-number-of/2184796.html

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Surefire Ways To Save Money On Your Next Income Tax

Anyone who takes part in trade and business is chargeable with tax. It is known that tax rates in Singapore are relatively lower compared to other countries in the world, making it more attractive for individuals and corporations to participate in some form of exchange in business.

Despite the relatively lower tax rates, no one entirely enjoys the act of filing for taxes! This is why you must employ creative ways to save on your next income tax. Consider these suggestions:

1. TAKE PART IN SUPPLEMENTARY RETIREMENT SCHEME

The Supplementary Retirement Scheme (SRS) is part of the government’s financial strategy to help Singaporeans increase their saving as they age. It is a type of retirement savings scheme that is voluntary, where anyone who has an SRS account may contribute any amount they want, which is still subject to a cap. The maximum contribution is capped at S$15,300 in 2016, a slight increase of S$2,550 from last year’s cap.

The more you save for your retirement using the SRS, the less you pay for your income tax. That being said, two apparent benefits are seen when contributing to SRS. The first being, for every dollar contributed to your account, taxable income will be reduced by a dollar. The second being, 50% of your SRS savings will not be taxed. Additionally, you are eligible to spread your withdrawals over a 10-year period.

2. HIT TWO BIRDS WITH ONE STONE

Fulfill your duty as a steward of goodwill and your duty as a responsible citizen by donating in accredited institutions. Several forms of donation are claimable. The following types of donations will qualify you for a double tax deduction (twice the amount of the donation):

a. Cash Donations
b. Shares Donations
c. Computer Donations
d. Artefact Donations
e. Public Art Tax Incentive Scheme
f. Land and Building Donations

For instance, a donation to the Singapore museums that have obtained the Approved Museum Status with the National Heritage Board is tax deductible.

Related Article: Basic Guide To Taxation In Singapore

3. REAP THE BENEFITS OF CPF CASH TOP-UP RELIEF

If you are interested in increasing not only your retirement savings but also the retirement savings of your loved ones, you might want to consider the CPF Retirement Sum Topping-Up Scheme.

You will be entitled to a dollar-for-dollar tax relief at a maximum of S$14,000 per annum. This entails a cap of S$7,000 for the individual and another S$7,000 for the family members (T&Cs apply).

Image Credits: pixabay.com

Image Credits: pixabay.com

Paying income tax can be painful to your wallet. This is why you must take advantage of the many ways to claim tax relief or rebates.

Sources: 1,  2, & 3

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Are You Cut Out To Be A Landlord In Singapore?

While looking out for a flat seems like an easy task, hard work needs to be poured behind the scenes. Ensure that you are prepared to be a landlord by analyzing some of the initial factors:

Are you familiar with the legal regulations?

Much like the systems imposed in many institutions in Singapore, rental property owners need to follow a set of regulations as mandated by the Law. Facets include leases, licenses, security deposits, maximum number of tenants, and eviction matters. These facets are examined by attorneys and other authorities in order to protect the interest of the landlords and the tenants.

It is important to be specific when it comes to written documents in order to have a strong support to your case, shall a dispute arise. Acknowledge the landlord-tenant rights as well as the eligibility standards for renting out a flat in Singapore. For starters, you have to be a Singaporean Citizen who has met the Minimum Occupation Period (MOP) to rent out an HDB flat.

Can you afford to become a landlord in Singapore?

Since your first property is the flat that you are occupying at the present, your investment will be considered as a “second property”. Just because you have a sufficient amount of money saved up for down-payment does not necessarily entail that you can afford to purchase a second property! Remember that you are living in Singapore – one of the most expensive cities in the world.

It will become your responsible to keep up with the ownership fees, maintenance costs, and mortgage. Familiarize yourself with these expenses before taking the significant plunge.

Do you consider yourself as a “people person”?

The media has portrayed landlords as people who exude unpleasant characteristics such as being slow in tenant assistance. If you really want to break this stereotype, you must determine if you are a genuine people person.

A “people person” finds delight when interacting with other people. Some landlords are naturally born with this trait. However, others have to bring extra effort when socializing. Ask yourself these questions:

a. Do you have the capacity to understand the tenants’ needs?
b. Are you willing to actively listen to your tenants’ concerns?
c. Will you tend to the property matters immediately?
d. Are you willing to make upgrades on your property regularly?

Answering these questions will help you determine if becoming a landlord is right for you. I cannot deny the fact that having good communication and interaction skills can help you to attract more tenants!

Image Credits: pixabay.com

Image Credits: pixabay.com

Rental property ownership is one of the most profitable investments for your retirement portfolio. It is also an excellent source of passive income. To know whether you are cut out for the job or not, you must initially analyze the factors above.

Sources:  1 & 2

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