A will, sometimes called a “last will and testament,” is a legal document that states your final wishes. It is the last instruction that one will give on planet Earth. It is a positive sign to see more people are drafting their Wills. This could be the topic of death is less of a taboo these days and more people willing to discuss the topic. The stories of how family fell apart when each tried to have a bigger share of the estates are also more common these days with the help of social media creating the awareness. Of course, having a Will does not mean families will not fight over it but as I mentioned to my client, our job is to get a Will done. We go in peace. It is up to the beneficiaries to fight if they want but we can avoid digging a hole for them to fight. That hole can be covered with a Will.
One misconception or reason that a Will is not drafted is it is costly. Most of us will be able to our estate distributed using “simple” Will. It does not cost more than $500 to get it done and it can cost as low as $250. However, this article will not focus on Wills but some other methods to distribute part of our estate when we are gone.
A couple with no kids recently purchased each a million dollar term plan. I told them to have their insurance nomination done but they think it is not necessary. Their reply was that they have no children who are minors and the benefit will go to either the surviving spouse or their parents. While they are not wrong in that thought, there are still reasons to get the insurance nomination done.
1. It is Free!
Do I still need to explain further? Anything that is free and is not hurting you, take first and decide later 🙂
2. It gives you control.
The insurance nomination still gives you a certain level of control. You are still able to decide who gets how much and who don’t gets a single cent. While this decision power is within that policy only, limited power is better than no power.
3. It expedite the process of claim.
Your insurance policy, just like any of your estate, it will be released and distributed to your beneficiaries only when Grant of Probate or a Grant of Letters of Administration is obtained from the Court. The process takes 4 to 6 weeks but it can take up to 6 months in some cases. During this period of waiting for the Grant, the estate is untouchable. In short, the estate will be frozen till the Court issues the Grant of Probate or a Grant of Letters of Administration.
With an insurance nomination, the payout is almost immediately as long as you are the beneficiary as stated in the nomination form. Under the insurance nomination of beneficiaries framework, there are two types of nomination.
Do check with your insurance agent if you need any clarification on making an insurance nomination or you can drop me an email.
1. AGAIN! It is Free!
2. It gives you control
CPF Nomination will not cover all your assets using your CPF Monies to buy when you are alive. For the items covered under CPF Nomination such as your CPF account balances, it will be distributed out as cash to the nominees. However, some CPF Members are worried their nominees will mismanage the sum of money from their CPF Savings and they can choose the “Enhanced Nomination Scheme (ENS) Nomination”. Under ENS, the nominees will receive the CPF Savings in their CPF Accounts. Another type of CPF Nomination is the “Special Needs Savings Scheme (SNSS) Nomination”. SNSS allows parents to nominate their children with special needs to receive the CPF savings due to them on a monthly basis instead of a lump sum.
3. Save money!
The CPF Board will forward a Deceased’s CPF monies to the Public Trustee under the following scenarios:
(a) If the Deceased had not made a valid CPF nomination during his lifetime; or
(b) If the person nominated to receive the CPF monies is under 18 years old(other than a widow).
The statutory fees payable to the Public Trustee for the administration of CPF monies are as follows:
|Amount of CPF Monies||Charge|
|For the first $1,000||2.400%|
|For the next $9,000||1.500%|
|For the next $240,000||0.750%|
|For the next $250,000||0.450%|
|For amounts in excess of $500,000||0.300%|
These fees, which we will take from the CPF money, include GST and cannot be waived. You will have to pay a minimum fee of $15.
For details on CPF Nomination, you can check out this .