For Your Loved Ones: A Guide to Estate Planning

Estate planning isn’t just for the rich. If you have people you care for, who are reliant on you then you too should look into your estate planning. You would be able to ensure that the people you are taking care of, will still be well taken care of even after your passing.

Understanding Estate Planning

Whenever someone passes away, only their soul gets to move on; the rest remains on earth. Regardless of whether it’s your assets or your body or your achievements, you can’t bring them along with you; everything else stays on earth. 

How about your loved ones? Do you love them while you’re alive or will you love them even after your passing? Whilst you’re here and able to make decisions, you could decide how you want to plan your estate. 

Through Estate Planning, you can ensure that your estate is distributed in accordance with your wishes, with your responsibilities well-handed even after your death. Estate planning isn’t just limited to property distribution it’s also all about security. Through estate planning, you’ll be able to protect your assets and your loved ones, even after your death and you would also be able to fund it in the event of your premature death. 

Estate Planning 101: What You Need To Know

1. Keep a record of all your assets

Whilst you may know what you have, would your family know what you have? It’ll be important to record down your assets and your liabilities so your family will be able to manage your estate in your absence. Furthermore, you will be able to assess if any of your assets is liable for estate tax or early redemption or assess if your family will face cashflow issues (i.e. property mortgage). Through this, you will also be able to assess the shortfall which you need to make-up for.

Assets could either be tangible or intangible. For tangible assets, these may include:

• Real estate (houses, lands, etc.)
• Vehicles (cars, motorcycles, boats, etc.)
• Personal possessions such as collections like, art, antiques, coins, or trading cards

For intangible assets, these could come in the form of:

• Checking and savings accounts and certificates of deposit
• Health savings accounts
• Life insurance policies and retirement plans
• Ownership in a business
• Cryptocurrency or any alternative investments
• Stocks, bonds, and mutual funds

2. Set up your legal directives

A complete estate plan includes important legal directives that would communicate your instructions upon your incapacitation or death and also indicating the appointment of people whom you trust who will see to the accomplishing of your instructions. 

This could mean setting up a:

• Lasting power of attorney – This means legally appointing someone whom you trust to manage your personal welfare, as well as your property and affairs in the event you become physically and mentally unable to do so. Your appointed individual, called a donee, will be able to make decisions on your legal and financial matters; this includes deciding your lifestyle, managing your finances, and even investment decisions. 
• Advanced medical directive – This is a legal document that one signs to inform the doctor treating oneself (in the event of terminal illness and unconsciousness) that one does not want any extraordinary life-sustaining treatment to prolong one’s life.
• Will – Through a Will, you would be able to communicate the manner in which you would like to distribute your estates along with your letter of wishes.
• Trust –. Through a Trust, you can rely on your appointed trustee to handle the trust in accordance with the trust deed for the benefit of your chosen beneficiaries. 

3. Consider your family’s needs

As you set up the framework as to how you would like your affairs to be managed, it’s important to also consider the following aspects for your family:

• Cover the gap with Life Insurance. If you realize that you have a shortfall on your estate plan and that what you have is insufficient to provide for your loved ones, you can make up the difference through a life insurance plan that would ensure a timely influx of cash when in a variety of worst-case scenarios. 
• Name a trusted guardian for your children and your wishes for your child’s care. In the event that both you & your partner pass away while your children are under-aged, having a trusted guardian who is willing to look after your children in your place will ensure that they will have a safe growing up the environment, aligned with the manner of parenting you would hope to provide. 

4. Be aware of estate tax implications

Estate taxes can easily ruin your financial plans even after you die. As much as possible, the goal of estate planning is to minimize taxes when distributing your assets to your beneficiaries. In Singapore, we do not have an estate tax, although if you have properties and assets in other countries, their local estate tax laws may have effects on your estate,+ and seeking proper tax advice would help you distribute your assets better and more efficiently to your beneficiaries. 

Establish an estate plan now!

An estate plan will ensure your wishes are carried out and your assets are distributed in line with your wishes after your death; while people may be put off with the idea of preparing for their deaths, having an estate plan guarantees the security and safety of not just your assets, but your family as well.