While it is never easy discussing one’s own mortality, death is a fact of life and we will never know when it’s our time to go. Therefore, it is never too late to prepare for your own passing. One of the ways to kick start this process is to have a Will drafted.
Wills are a legacy of your love. It is a roadmap that provides instructions on how to distribute your assets after your passing. If you wish to leave something to your best friend who went through life’s ups and down with you for her to remember you by, you should consider having a Will drafted. Also, who is going to take care of your beloved pet after your passing? You can consider entrusting your pet to your siblings or your trusted friend and setting aside a sum of money in your Will to care of your beloved pet.
Without a Will, your estate will be distributed according to the Intestate Succession Act, This means that your best friend will not be entitled to the jewellery you left behind, and your beloved pet may end up uncared for.
Before you consider drafting up a Will, here are some of the definitions which you should get familiar with. The person making the Will is called the “testator”. The person appointed to manage and distribute the assets is called the “executor”. The persons who are gifted the assets are the “beneficiaries”.
When should I have my Will drawn up?
A Will must be made while you are alive and have mental capacity. You can have a Will drawn up at any time after you reach 21 years old. We recommend that all adults with assets have a Will drawn up for themselves.
When should I review my Will?
A Will should be reviewed every 3 to 5 years or as and when a major life event happens which may result in a change the executors or beneficiaries named in your Will. (e.g. marriage, birth of a child, passing of an executor etc)
Who shall I appoint as my executor and what is the role of an executor?
Executor(s) of a Will must be at least 21 years old, of sound mind and not bankrupt. Usually, family members, close relatives or friends are appointed to be executors. It is common for Testators to appoint adult beneficiaries of a Will as their Executor(s) for ease of convenience.
The role of an Executor is to facilitate funeral arrangements, apply for the Grant of Probate, settle the deceased’s remaining debts and distribute the remaining estate according to the Testator’s intention as per the Will.
Since an Executor’s primary role is to handle your estate after you pass on, they should be appointed carefully and preferably be someone that you trust and someone who will outlive you.
Pursuant to section 6 of the Probate and Administration Act, a minimum of 1 executor must be appointed and a maximum of up to 4 executors may be appointed to execute a Will.
In cases where there are minor beneficiaries (i.e. beneficiaries below the age of 21 years old), it is recommended to appoint 2 executors because minority beneficiaries cannot claim their inheritance until he/she is of age.
It is also advisable for more than 1 executor to be appointed so that the executors may keep each other in check and assist each other in their duties. Having 2 executors also helps to protect against the unfortunate event of a sole executor being unable to perform their duty due to a physical or mental illness.
Who can be a beneficiary?
Beneficiaries can be anyone – your family member, a friend, or even an organisation. However, pets cannot be direct beneficiaries under a Will (i.e. you cannot will 10% of your estate to your pet) as pets are not recognised as a person or a legal entity before the law.
Under the law, pets are “property” and may be entrusted to a new owner after you pass on. You may consider leaving a set of instructions to the person you are entrusting your pet to with information like your pet’s allergies, likes and dislikes to facilitate the process of ownership. Besides, you can also choose to leave cash gifts to the person you had entrusted your pet to, to help defray the costs of caring for your pet.
Nevertheless, please note that there is no legal obligation on this person to take over the care of your pet or use the cash gifts in the way that you specified so be sure to choose someone trustworthy to care for your beloved pet.
What happens if my beneficiaries are minor children? (i.e. children below 21 years old)
If the beneficiaries in your Will are below 21 years old, or you have a child with special needs, it may be mindful to appoint a testamentary guardian in your Will under Section 7 of the Guardianship of Infants Act to care for your child after your death.
Your executor who will double up as your trustee in your Will, will hold the assets on behalf of your minor children or children with special needs. They will also be in charge of distributing the assets accordingly to the testamentary guardian for the minor beneficiary’s day to day and education use. and aid them with the management of their inherited assets.
After considering who you would appoint as executor and who do you want your will to benefit, you must next look at your assets and determine how you would like your assets to be divided amongst your beneficiaries.
What can be gifted in a will?
Generally, these assets can be willed away:
What cannot be gifted in a will?
The following assets cannot be willed away:
Properties or shares held jointly cannot be willed away as the nature of a joint holding is that the property/share devolves upon the surviving holder. Accordingly, the property/share does not fall into the pool of the deceased’s estate so it cannot be willed away.
CPF monies and shares are devolved upon the nominees nominated by way of memorandum executed in accordance with Section 25(1) of the CPF Act. Therefore, CPF monies cannot be willed away.
If there is no nomination under Section 25 of the CPF Act, the CPF monies and shares will be distributed in accordance with the Intestate Succession Act.
For Insurance Policies, the proceeds from such policies usually devolve upon the beneficiaries nominated under the relevant policies.
Under Section 49L and 49M of the Insurance Act, there are 2 types of nomination that can be made – A revocable nomination or trust nomination.
A revocable nomination can be made to nominate any person as a beneficiary and can be revoked anytime, whereas a trust nomination can only be made to nominate a spouse or children.
Trust nominations are more permanent and cannot be revoked unless the consent of the nominated beneficiary is obtained. Accordingly, when there are beneficiaries nominated under an insurance policy, the proceeds from the policy automatically devolves to the nominated beneficiaries and do not fall under the deceased’s pool of assets.
Can an HDB be willed away?
If an HDB is held in joint tenancy and one of the joint owners pass away, the HDB will devolve to the surviving joint owner and not fall within the pool of assets to be distributed in the deceased’s Will.
If the HDB is held in Tenancy in Common, the share of the HDB will fall within the pool of assets to be distributed and may be inherited by the beneficiaries subject to HDB’s eligibility requirements.
Similarly, if the sole owner of a HDB has passed away, the HDB will fall within the pool of his assets and can be willed away to his/her beneficiaries, subject to HDB’s eligibility requirements.
What happens if the beneficiary does not meet the requirements to own an HDB flat? Can he/she still inherit a HDB flat?
In the event where the HDB is willed away to a beneficiary that is not eligible to own HDB (e.g. he/she is below 35 years old, or already owns another HDB/private property), the HDB can be sold and the beneficiary can keep the sales proceeds instead.
If the beneficiary wishes to inherit the HDB, he/she would have to appeal to HDB and/or dispose of the current HDB/private property.
What happens if the beneficiary owns private property in Singapore or Overseas? Can he/she still inherit a HDB flat?
If the inherited HDB flat was purchased before 30 August 2010, and the beneficiary meets the eligibility requirements to own a HDB flat, then the beneficiary may keep the HDB flat.
However, if the HDB flat was purchased after 30 August 2010, the beneficiary may only retain 1 property, either the HDB flat or the private property.
Note that this only applies to unsubsidised HDB flats purchased, if the HDB flat is subsidised (i.e. flat is purchased directly from HDB or from the open market with a CPF Housing Grant), the beneficiary can only retain either the HDB flat or the private property.
Will the beneficiary incur any additional taxes or duties after inheriting the HDB flat?
When a beneficiary inherits a HDB flat, he/she becomes the legal owner of the flat and will be liable to pay Additional Buyer’s Stamp Duties (ABSD), on top of Buyer’s Stamp Duties, when purchasing future residential properties.
Also, when a beneficiary inherits a HDB flat and is ineligible to own a HDB flat, he/she may be required to sell the flat within 6 months on the open market upon taking ownership of the flat. In such cases, Seller’s Stamp Duties (SSD) may be payable if the Minimum Occupation Period of that flat has not been met.
Some folks put off making a Will for themselves because they assume that they have little assets and there is no point in making a Will. However, this is not the case because the Probate process can get more complicated and stressful for your loved ones if you do not have a Will in place. Making a Will for yourself is in fact an act of courtesy and love towards your loved ones.