The Complete Guide To Estate Planning In Singapore: What You Need To Know

by | Jun 18, 2024 | Knowledge & Insights

Believe it or not, everyone has an estate, including you. It comprises everything you own, from your car and home to your savings accounts and personal belongings.

Regardless of its size, your estate is a significant part of your life. And one thing everyone shares is this: when you pass away, you can’t take these possessions with you.

Estate planning in Singapore is important because it allows you to determine precisely how your assets will be handled after you’re gone.

This guide will cover the basics of estate planning, enabling you to confidently manage your assets.

What Is Estate Planning Singapore?

Estate planning is the process of arranging the management and disposal of your estate during your lifetime and beyond. It involves legal frameworks and financial plans to guarantee that your assets are allocated according to your wishes in the event of your death or incapacitation.

In Singapore, estate planning is not just for the wealthy; it’s a practical step for anyone wanting to manage their assets responsibly.

This process typically includes drafting a will, setting up trusts and sometimes establishing a lasting power of attorney (LPA) to protect your interests if you’re unable to make decisions yourself.

Without an estate plan, the distribution of your assets will be handled according to the Intestate Succession Act in Singapore if you die without a will. This could lead to outcomes that might not align with your personal wishes or the specific needs of your family members.

For instance, certain relatives may receive a share of your assets by default, regardless of your relationship with them.

Additionally, without an LPA, if you become incapacitated, there might be no legally appointed person to manage your affairs, leading to potential legal complications and delays.

Hence, not having an estate plan can result in unnecessary stress and strife among your loved ones, not to mention the potential financial ramifications.

When Should You Start Estate Planning?

Estate planning in Singapore is an important task that should not be postponed until the later stages of life. Individuals at various life stages must consider setting up or updating their estate plans to reflect their current needs and situations.

Here’s when and why different groups should engage in estate planning:

As Young Adults

As soon as you start earning or accumulating assets, it’s wise to consider estate planning. Even basic estate plans, including a simple will and a lasting power of attorney (LPA), are advisable for young adults.

These documents ensure that your assets and health care preferences are handled according to your wishes should anything unexpected happen.

As Married Couples

Marriage is a significant life event that often changes your financial and legal circumstances.

Estate planning for married couples might involve:

  • Setting up joint ownership of assets.
  • Updating beneficiaries on insurance policies.
  • Ensuring both parties’ wishes are honoured if one partner passes away or becomes incapacitated.

As Parents

For parents, estate planning becomes even more critical. You’ll need to consider who will take care of your children if both parents pass away or are unable to provide care.

A will can specify a guardian for your minor children, and trusts can ensure that your children are financially supported until they are adults.

As Retirees

Reviewing and updating your estate plan is important as you enter retirement. This stage often involves adjusting your will to reflect changes in your assets and specifying your wishes for end-of-life care through an advance medical directive or an LPA.

At this stage, estate planning helps manage your retirement funds and ensure that your estate is distributed as you wish without unnecessary legal complications.

6 Common Triggers For Updating An Estate Plan

Updating your estate plan is as important as creating one. Life events can change your personal circumstances and financial affairs, requiring adjustments to ensure your estate plan remains relevant and practical.

Here are some common triggers that should prompt a review and possible update of your estate plan:

1. Marriage Or Divorce

Any change in marital status is a significant trigger for updating your estate plan.

This includes getting married, which might prompt you to include your spouse in your will or trust, or getting divorced, which typically necessitates the removal of your ex-spouse from legal documents.

2. Birth Or Adoption Of A Child

The addition of a new family member is critical to ensure your estate plan reflects this change, particularly regarding guardianship arrangements and financial provisions for the child.

3. Change In Financial Status

Significant changes in your financial situation, such as receiving a large inheritance, experiencing a substantial increase or decrease in wealth, or purchasing a home, should prompt a review of your estate plan.

4. Death Of A Beneficiary Or Executor

The death of someone named in your estate plan as a beneficiary or as an executor necessitates updates to reflect new arrangements.

5. Change In Laws

Updates in legislation related to estates, taxes or trusts could affect your estate planning. Keeping your plan compliant with current laws is crucial.

6. Health Concerns

Developing a serious or terminal illness may lead to changes in your priorities and needs in estate planning, including decisions about medical directives and end-of-life care.

4 Key Components Of Estate Planning In Singapore

When considering estate planning in Singapore, it’s essential to understand the key legal instruments and strategies that can be used to manage and protect your assets effectively.

Engaging an estate planning lawyer is often a wise decision, as they can provide specialised guidance tailored to the unique legal framework of Singapore.

Here’s an overview of the critical components involved during an estate planning process:

1. Wills

A will is the foundation of estate planning. It outlines how you want your assets distributed after your passing.

Wills must comply with the Wills Act, which stipulates that a person writing a will in Singapore must be at least 21 years old, and the will must be witnessed by two individuals who are not beneficiaries.

2. Trusts

Trusts are another vital part of estate planning, allowing greater control over how your assets are used and distributed.

A trust can help protect your estate from legal complications and ensure that your beneficiaries receive their inheritance in a managed way, particularly useful for minor children or family members with special needs.

Read our guide on what is a living trust in Singapore for more information about this document.

3. Power Of Attorney

A power of attorney allows you to appoint someone to manage your affairs if you become incapable.

In Singapore, two types of powers of attorney are relevant to estate planning. First, the general power of attorney, which is valid when you have mental capacity.

Another type is the lasting power of attorney (LPA), which extends beyond the loss of mental capacity.

If you have an HDB and are planning on creating an estate plan, you can read our article on how to create an HDB power of attorney in Singapore.

4. Advance Medical Directive

An Advance Medical Directive (AMD) is a legal document you sign beforehand to indicate to your doctor that you do not wish to receive extraordinary life-sustaining treatments to extend your life if you become terminally ill, unconscious and are nearing death.

By understanding these components and working with a competent estate planning lawyer, you can ensure that your assets are well-protected and distributed according to your wishes.

This proactive approach secures your financial legacy and provides peace of mind knowing your loved ones are taken care of.

5 Tips On Documenting And Updating Your Estate Plan

It’s essential to document and frequently update your estate plan to make sure your assets are allocated as you desire and that your loved ones are provided for when you’re no longer present.

Here are five tips to help you maintain a robust estate plan:

1. Keep Detailed Records

Maintain a comprehensive list of all assets, including bank accounts, property, investments and personal valuables, along with relevant documents such as titles and deeds. This makes it easier to manage your estate and provides a clear overview for your executors and beneficiaries.

2. Use Clear Language

When documenting your wishes, use clear language to avoid potential disputes among beneficiaries.

It’s advisable to work with a professional, like an estate planning lawyer, who can help ensure that your documents accurately reflect your intentions.

3. Securely Store Documents

Keep your estate planning documents in a secure yet accessible location. Inform key individuals, such as the executor of your will or a trusted family member, about where these documents are stored.

Consider using a safe deposit box or a secure digital storage solution executors can access when needed.

4. Review Beneficiaries Periodically

As life changes, so might your relationship with the people named in your estate plan. Regularly review and update beneficiary designations on policies like life insurance, pensions, and retirement accounts to ensure they align with your current wishes.

5. Consider Digital Assets

Don’t forget to include digital assets in your estate plan. This includes everything from your online bank account to your social media profile. Provide clear instructions on how these should be handled, who should have access, and what should be done with them after your passing.

5 Tips To Find An Experienced Estate Planning Attorney In Singapore

When searching for an experienced estate planning attorney, you must go beyond surface-level criteria and examine factors that distinctly impact the quality and effectiveness of your estate planning.

Here are tips to ensure you choose a lawyer who can help with your estate planning needs and excel in the complexities of Singapore’s estate laws:

1. Expertise In Local And International Laws

Given Singapore’s position as a global hub, your estate planning might involve cross-border elements.

Choose a lawyer who is well-versed in local estate laws and familiar with international regulations that could affect your assets overseas.

This expertise is essential for accurately navigating potential tax implications and legal hurdles across different jurisdictions.

2. Experience With Complex Family Structures

If your family structure includes previous marriages, stepchildren or business ownership, you need a lawyer with specific experience in these areas.

They should be proficient in creating estate plans that address unique family dynamics, ensuring fair and conflict-free distribution of assets. Ask for case studies demonstrating their capability to handle similar scenarios.

3. Proactive In Legislative Updates

The legal landscape for estate planning can evolve rapidly.

Choose a lawyer who is proactive about staying updated with the latest changes in laws, including amendments to the Probate and Administration Act or shifts in tax policies affecting estates.

This attentiveness is crucial for maintaining a current and compliant estate plan.

4. Detailed Consultation Process

Competent estate planning attorneys should provide a thorough consultation process that reviews all aspects of your assets and personal circumstances. This includes discussing potential scenarios for incapacity planning and not just post-death asset distribution.

Assess their approach during your initial meeting. A good lawyer will ask detailed questions and offer customised advice based on your needs.

5. Clear Fee Structure For Comprehensive Services

Ensure the lawyer offers a transparent fee structure for drafting documents, providing ongoing advice, and updating your estate plan.

Comprehensive estate planning may involve periodic reviews and modifications; understanding the costs of these services upfront will help in long-term planning.

Conclusion About Estate Planning In Singapore

By understanding what estate planning involves, recognising when to begin or update your plan and knowing how to choose the right estate planning lawyer, you are well on your way to creating a plan that suits your needs and protects your interests.

The best benefit of having a thorough estate plan is the peace of mind it brings. Knowing that your assets are secured and your loved ones are provided can alleviate stress and uncertainty.

If you’re ready to take the next step in securing your legacy, consider contacting Singapore Family Lawyer.

We offer a free 30-minute consultation to discuss your specific needs and outline the best path forward for your estate planning.

Frequently Asked Questions About Estate Planning In Singapore

What Happens If I Own Property In Multiple Countries?

Owning property in multiple countries complicates your estate planning due to varying international laws. Creating a comprehensive estate plan that aligns with the legal requirements in each jurisdiction.

Consulting with an estate planning lawyer with expertise in international property laws is advisable to ensure all assets are properly managed and distributed.

Can I Appoint A Non-Resident As My Executor Or Trustee In My Singaporean Will?

Yes, you can appoint a non-resident as an executor or trustee in your will. However, practical challenges should be considered, such as managing estate duties from abroad and potential administrative delays.

It may be beneficial to appoint a local co-executor to facilitate smoother legal and administrative processes.

Should I Consider Any Specific Estate Tax Burdens When Planning My Estate In Singapore?

Singapore does not impose inheritance or estate taxes, which simplifies estate planning. However, international tax implications may arise if your estate includes global assets.

An estate planning attorney can guide you on structuring your estate to minimise tax liabilities across jurisdictions.

How Do I Ensure My Digital Assets Are Included And Properly Handled In My Estate Plan?

List all digital accounts, such as social media, online banking and cryptocurrency wallets, and provide access instructions securely.

Specify how each asset should be handled, and consider appointing a digital executor with the technical know-how to manage or close these accounts as per your wishes.

About the author

About the author

Jonathan Wong

Jonathan is the Founder and Managing Director of Tembusu Law. He is also the founder of LawGuide Singapore, a prominent legaltech startup which successfully created and launched Singapore’s first legal chatbot in 2017.