Estate planning involves critical tasks that encompass creating or updating a Will, appointing an executor or executors, designating guardians for dependents, deciding beneficiaries and gifts, deciding funeral arrangements, establishing Powers of Attorney in case of mental incapacity and minimizing estate taxes through implementing annual gifting strategies and possibly setting up trust accounts. These measures ensure a well-structured and tax-efficient transfer of assets, preserving your legacy for generations to come.
Estate planning is an ongoing process and should be started as soon as one has any measurable asset base. As life progresses and goals shift, the estate plan should move to be in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run higher than 40%), so at the very least a Will should be set up even if the taxable estate is not large.
Chartwell Associates Pte Ltd are highly experienced Singapore-based will writers with membership of the Society of Will Writers (UK), and broad knowledge regarding cross-border issues so understand the intricacies of tax laws and financial strategies. We work diligently to help you safeguard your assets, ensuring they pass on to your loved ones while minimizing the burden of taxation. With our guidance, you can build a comprehensive plan that protects your wealth and eases the transition to the next generation.
The first step in Estate Planning is arranging a Will
If you have not made a valid Will, your property will pass according to the Law of Intestacy in which your property is located, and for Expatriates in Singapore, this may be in two or more countries
If you have not made a valid Will, your property will pass according to the Law of Intestacy in which your property is located, and for Expatriates in Singapore, this may be in two or more countries. Your assets could be distributed in a manner which does not align with your wishes, and the process is likely to take much longer than if you had written a will.
This could leave your loved ones unable to draw money from your estate at the time when they need it most’If you have children, a Will is the only way to ensure that arrangements are in place should something happen to both parents. For married couples, it is typical to write ‘mirror wills’, which basically match each other in crucial areas such as guardianships and inheritance.
Most Wills made in a country or Jurisdiction whose legal system is based on “Common Law” will be recognised as valid in most other Common Law countries as long as it meets the criteria for Wills in that country. Countries whose legal systems are based on “Civil Law” may not recognise the validity of a Common Law Will.
It is essential therefore to be aware of what legal system your assets reside in, and if not “Common Law” what is the alternative arrangement.
Without having an integrated Estate Plan, navigating varying probate and succession laws across countries can lead to a prolonged and intricate asset distribution process. This may result in asset freezing, high taxes, debt accumulation, and profound financial risks for your loved ones after your passing.
A Will can also set up trusts to hold assets for minor children until they reach a certain age, usually stipulated in the Will.
Setting up a separate trust outside the Will can be a way to circumvent the probate process (which all Wills go through) so that heirs can receive their inheritance more smoothly and quickly. People who set up such trusts often have a pour-over Will as well to dispose of assets not included in the trust.
Trusts can be excellent solutions for some individuals and families, but have to follow certain rules, can be complicated and can be expensive to set up and maintain.
The Guardians that we select for our children are commonly close family members or friends. For expat parents, a challenge arises when those appointed guardians live outside of Singapore, most commonly back in their home country. In the unfortunate event of both parents passing away simultaneously, it may take weeks for the chosen Guardian to be informed.’
During this period, Singapore authorities assume temporary custody of minor children, placing them in foster homes until the Guardian designated in the Will arrives in Singapore to assume responsibility. Notably, domestic helpers in Singapore are not permitted to care for minor children in such circumstances, even if they have a strong bond with the children.
While not part of the Will, parents can draft a letter appointing “Transitional Guardians.” This letter grants friends living in Singapore the authority to care for the children until the official Guardian arrives, offering a solution to this critical issue.
We also recommend that our clients consider the ramifications of becoming unable to look after themselves or their affairs through; accident, old age or mental illness.
Arranging a “Lasting Power of Attorney” nominates and gives the legal authority to someone (such as your partner) to look after you, your affairs and finances should you be deemed incapable. This could be more important than a will if you hold substantial assets in one name only.
Powers of Attorney, unlike Wills, tend to be country specific and in some countries even State specific. So, you should consider having Power of Attorney on each other here in Singapore as that is where you are currently living and then look at where else you have important assets and consider whether you should have powers of attorney in those jurisdictions as well.
If you have not completed a Power of Attorney before you may need help and advice.
With over 17 years of experience, Chartwell Associates is dedicated to providing ethical guidance, service, and support to help you achieve your financial goals. We offer expert advice to craft a Will that minimizes liability, preserves your wealth, protects your assets, and ensures a lasting legacy for your loved ones.
For British expatriates, estate planning is paramount. Achieving UK non-resident status might seem like a tax haven, but when it comes to UK inheritance tax (IHT) it is domicile status which matters.
If you are UK domiciled, the UK levies IHT at 40% on your worldwide estate exceeding £325,000 at the time of your death, regardless of where you are resident.
Expert guidance is essential to implement effective financial strategies that can mitigate your IHT liability. Discover more about Estate Planning and assess your Inheritance Tax Liability with our experienced advisors.