Friday, June 26, 2009

Leaving Peace not Frustration for your Loved ones

When we are alive, we can give anything we own to whoever we like. However, when God calls us to heaven, the law will decide how our Earth assets will be distributed. Writing a Will is important to avoid the hassles and problems that arises when we leave without one.

Will writing is an important part in the Wealth Distribution process. Other areas of concern will be the CPF nominations, NTUC policies nominations, Section 73 policies and establishment of trust, etc. I'm neither a Will Writer nor a Lawyer but as a Financial Planner, I'll help my client in the process when they are ready to get it done.

Currently, I only help my clients with it and not just anyone because its a service and I don't get a single cent for going through the whole thing.

Step 1: Know your assets and liabilities
Certain situations to take note when taking inventory of your assets
a) Take note of assets that have a debt tied to it. Example, Property or Car. It might be your good intention to leave behind some assets for your loved ones but pls don't leave behind a huge debt for them instead. If there is a liability on that asset, take an insurance to protect it.
b) Take note of your overseas assets. Example, Overseas properties or investments. There might be estate duties payable for these investments or property in that country. Your intention might be to leave behind $1million but it may ended up giving only $600,000.
c) Some assets under joint name. Example, Joint Bank Accounts or Joint Investments. They may or may not follow in accordance to your will. Don't assume that the money will go to the other party.
d) CPF monies. You have to make a separate nomination for it.

Step 2: Know who to give
* This can be the tough part especially if you have many assets of different types. Example, Investments, Properties, Businesses, Cash, etc.
* You can give to Charities if you like to. There are many under-privilege people around. Your lawyer or Will Writer can help find out their Charity Registration number.
* A simple will is to allocate all your assets in specific percentage and perhaps 1-2 unconditional and specific gifts.

Step 3: Select your Trustee, Guardian and Executor
* The executor is a very very important person in ensuring your Will is carried out. Select him/her carefully based on your judgement of competency and willingness to take up this challenging job. Consider leaving him a small part of your asset for this poor guy who have to shoulder such big responsibility.
* The natural guardian will be your spouse if you have minor children but you may add a substitute guardian in event of common disaster where spouse do not survive.
* For trustee, find one who is meticulous enough to handle money. Decision in allocating the allowance or to invest the funds etc are things he/she may need to discuss with the Guardian or Executor.

Step 4: Write your Will
* You can actually DIY your Will, find 2 witnesses and get it done.
* However, I will advice you to look for a Lawyer or a Professional Will Writer to do the job. If there are errors or omissions, the whole will can be disputed and become void.
* Don't save this money. A simple Will cost you only $150 to $200.
* If mistakes are made in the Will after our demise, it will be too late...

Step 5: Register your Will and keep in properly
* You may find a good place to keep your Will. Inform your executor about the location.
* Register your Will with the Public Trustee, so that people will know that you had written a Will before.

It is important and actually not that difficult to write a Will but most of my clients often do not have the patience or see the need to write one. They know its important but due to the non-urgency nature, they will procrastinate...


Anonymous said...

One thing to add is that a lawyer is competent and qualify to advice on Will writing but is not qualify nor experience in giving financial advice. Because the contents of the Will are mostly financial matters, a financial planner's job is to help their clients make good financial planning decisions in the manner their estate is distributed.

This is a very important job for the financial adviser but because there is no commission to earn for giving such advice, it is the best interest of the client to find a financial adviser who is fee-based so that there is no conflict of interest.

Anonymous said...

Is leaving ten, twenty thousand dollars for loved ones peace or frustration, Adrain? It is not frustration but condemnation for life. So, don't talk about will.Get the the life insurance right first.