Amid the hustle and bustle of everyday life, estate planning often takes a backseat. This is the case for individuals of both genders.
However, planning for the distribution of everything one owns and deciding how one’s loved ones should be taken care of should be a priority for women. Death and losing the ability to make independent decisions are beyond our control. Yet what we do now can make all the difference for those who live on.
Not convinced? Let us take you through the reasons to plan your estate urgently, in more detail.
# 1: Estate planning’s not just about death.
We tend to associate estate planning with ensuring our loved ones are taken care of after our death. But it is also about looking after their interests when we are unable to make decisions of our own (incapacitated).
Making a Lasting Power of Attorney (LPA) is essential. Should you lose mental capacity, it ensures your family does not have to make an expensive and time-consuming court application for the authority to make decisions on your behalf.
A LPA allows you to legally appoint a donee or donees to make the call on your personal welfare (e.g. where you will reside) as well as your financial matters. They do so according to your wishes as laid out in the document.
Advanced Care Planning (ACP) is another process you should undertake as soon as you can. ACP helps prevent unnecessary stress on the part of your loved ones when they need to make important care decisions on your behalf. Do not assume they will know your healthcare preferences in the event of incapacity.
# 2: Estate planning’s not just about money and possessions of monetary value.
Are you a parent or a caregiver of a minor? If so, estate planning is imperative. You need to appoint a trusted legal guardian to take care of the minor in the event of your death.
The appointed guardian will gain custody of your child and help take care of his/her physical and emotional well-being. He/she will also manage your estate until your child reaches adulthood.
# 3: Estate planning’s not just for the wealthy or individuals with complex family situations (e.g. blended families).
If you have assets of some form – bank accounts, insurance policies, or properties, just to name a few – estate planning is for you. An estate plan ensures these assets are distributed as you deem appropriate, and not based on intestacy laws. This guards against disagreements among your loved ones. You can also be more assured the people you treasure will be taken care of in the long term.
Let’s take Ruth* for instance. Ruth is married without children and has two elderly parents. She recognises her spouse has his own income and assets, and would not need a significant portion of her estate. She makes plans so her parents, who have little retirement funds, inherit a larger proportion of her estate.
Had Ruth died intestate (without a Will), her estate will be split 50-50 between her spouse and her parents, according to the Intestate Succession Act. This would have gone against her desires. She made the wise move by having a Will to stipulate exactly how much to leave to her parents.
Without an estate plan, Ruth’s loved ones could also have incurred significant expenses settling her affairs. So, while it may seem costly to have an estate plan, not having one would have been more expensive in the long run.
# 4: Estate planning cannot be borne wholly by one spouse.
Your spouse may have proven to be a savvy all-rounder when it comes to settling the household’s financial and legal matters. An estate plan, however, is an individual affair – meaning you and your spouse would need separate estate plans. You might survive each other, and as life expectancy trends in Singapore have shown, the chances of you outliving your spouse are greater. That would mean the need to create your own estate plan eventually as the surviving spouse.
Have you been appointed the executor for your spouse’s estate? You would need to be familiar with the value of his estate and where all his assets are to distribute them. When you both have your own estate plan, that helps you and your spouse better understand the nature and extent of each other’s assets. You are less likely to be caught off guard if he passes away first, and him vice versa.
Make use of the range of estate planning tools at your disposal to ensure your wishes and desires are followed. While it may seem counterintuitive, communicating your estate plan with your loved ones helps prevent surprises. Be sure to review your estate plan at least once a year. You may want to review it sooner if significant life changes or amendments to the law arise.
* This is a fictional account for purposes of illustration. Any similarity to actual persons, living or dead, or actual events, is purely coincidental.
For more insights on various aspects of estate planning, please visit http://estateplanning.com.sg/estate-planning-tools/.
This article and the pages it links to are not substitutes for professional advice. For specific advice tailored to your individual situation, please contact the team at Summit Planners.