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What happens to your money if you’re suddenly gone?
Key takeaways
End-of-life planning ensures your finances and care are managed according to your preferences in the event you lose mental or physical capacity and are unable to communicate your wishes.
Estate planning allows you to ensure your assets are distributed according to your wishes after your death, thus avoiding family disputes.
It is never too early to start planning – waiting until you’re ‘older’ might be too late. Unexpected events may cost you dearly.
While it’s easier to focus on living life fully, delaying decisions about what happens when life ends or if you lose mental or physical capacity may leave your loved ones in a bind.
Most of us live like we have forever, even if we all know we will leave this world one day. That’s because thinking of our own mortality can get uncomfortable.
However, it is crucial for us to plan for how things should be handled when we age or die. Unexpected events like an accident, illness, or sudden death may happen, and we need to consider how we want our assets to be managed before these events occur. Planning for your future care and eventual departure while you are clear-minded and able-bodied can prevent additional stress on your loved ones when the time comes to deal with these issues. It also helps avoid lengthy family or legal disputes over your assets. Finally, it cements your legacy as someone forward-thinking, who puts their family first.
According to the UOB ASEAN Consumer Sentiment Study 2024, 84 per cent of Singaporeans have started setting aside funds for their future retirement.1 However, one in three has not started legacy planning, leaving their loved ones vulnerable to financial uncertainty.
What if you died without a will?
It may not have occurred to you before, but your assets could last beyond your lifetime. These can be financial investments, properties, Central Provident Fund (CPF) savings, or even a business. Without clear documentation, these assets may be left in limbo, with no clear transfer of ownership or succession. They may even end up divided in a way you would not have chosen.
For example, if you died without a will, your loved ones would have to rely on intestacy laws to decide who gets what.2 While the law may be clear and fair, the process can take months before the assets are finally distributed.
What should you be planning for?
There are two typical scenarios to plan for: when you lose the capacity to manage your finances and personal care, and when you die. End-of-life planning and estate planning are two distinct but equally important aspects of this preparation.
1. End-of-life planning
End-of-life planning prepares for scenarios where you may lose mental or physical capacity. This may be due to an accident, a coma, or an illness like dementia. End-of-life planning ensures that your needs and preferences are honoured, even when you are unable to communicate them. Key actions include:
Appointing a trusted person via a Lasting Power of Attorney (LPA) to manage your finances and personal affairs.3
Creating an Advance Care Plan (ACP) to outline your preferences and values regarding future healthcare decisions.4
2. Estate planning
Estate planning focuses on how you want your assets—such as property, savings, and investments—distributed after your death. In Singapore, the process of estate planning includes:
Writing a will: This is the document outlining how your assets will be distributed and appointing an executor to manage the distribution.
CPF nomination: Distribution of CPF savings upon death cannot be outlined in a will. A separate CPF nomination must be made to designate your beneficiaries for these savings.
Reviewing property ownership: In Singapore, property ownership automatically transfers to the surviving owner in joint tenancy arrangements. This is different from tenancy-in-common, where the deceased joint owner’s shares in the property remain with the estate of the deceased joint owner.5
Over time, your life circumstances and even your personal values could change. After pivotal events like the birth of a new child, or the death of a loved one, it would be good to revisit your legacy planning documents to keep them updated.
Safeguard your family’s future by planning now
One common misconception is that end-of-life or estate planning is something only the elderly should do. However, accidents or health issues can happen at any age. Consider the following scenarios:
Sarah, 40, was involved in a car accident and fell into a coma. Without an LPA, her family had to spend months applying to court to gain access to her bank accounts to cover medical bills.
Mr. Lim, 75, developed dementia. Fortunately, his son had been appointed as his donee under an LPA years earlier, so he could immediately take over his father’s personal and financial affairs, including paying for his caregiving costs.
Here is something every person needs to think through: what would happen to your loved ones if they were suddenly faced with managing your finances without clear instructions? Would they know how to access your assets or handle your medical care?
Planning for the end may not seem that urgent but is incredibly important. Doing so now, before it is too late, will give you better peace of mind.
Further reading
If you wish to learn more about end-of-life and estate planning, the Singapore Government has useful resources on MyLegacy.
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