Planning is part of life — every Singaporean desires to buy a home, car, vacation, and so much more. You work hard to ensure your family has a good experience and a solid financial base. For this reason, you’ve got to have a sound financial plan in place. However, most people fail to plan for the time they will not be there.
Estate planning is one of the areas that many people ignore or assume in their financial and life planning. To a large section of the population, estate planning is only for the rich. However, that isn’t true – you can carry out estate planning, even if you don’t have an estate.
Here are the core reasons why estate planning is so essential:
Prevent Inheritance Wrangles
Inheritance wrangles are a common occurrence across the globe after the demise of a loved one. Family members can engage in an inheritance war when someone dies without leaving a will or if they’ve left a controversial will.
In most cases, these disputes end up in the courts, which could delay the transfer of your estates.
Estate planning plays a vital role in stopping such sad scenarios from happening. With an estate plan, you get to identify your intended beneficiaries and executors, preventing confusion and resentment.
Protect Your Assets
Asset protection planning is a vital part of estate planning. Once you anticipate the possibility of future creditors on the horizon, a solid financial plan and a comprehensive estate plan protects your assets throughout your lifetime and for your beneficiaries after your demise.
You can also provide asset protection for your spouse, young children, and other beneficiaries by using lifetime trusts.
Avoid Passing Tax Burdens to Your Heirs
Upon your demise, the government identifies any assets or properties you may have as disposable assets. Your mutual funds and stocks can be liquidated, and the government can earn tax from them.
With estate planning, you can go on the offensive and help to minimise the amount of tax your loved ones will have to pay when you pass on. This planning ensures that when you die, the process of transferring all your assets to your heirs is trouble-free and not costly. Also, it protects your heirs from huge income taxes, which could be a struggle to pay.
Specify Your Intended Beneficiaries
Transfer of property and assets is another reason why you should have a detailed estate plan.
The plan stipulates who will inherit what property or asset. This way, there is a smooth transfer of ownership to the right heir. Without an estate plan in place, the transfer could get complicated.
In many cases, people end up in the courts, and these cases can take forever to determine. Hence, estate planning enhances asset transfer, ensuring that everyone in the family gets what is rightfully theirs.
Appoint an Executor
Money is personal, and what happens to it or who manages it after our death is an essential consideration.
An estate plan allows you to appoint an executor who will ensure that people honour your wishes on your passing. The person you choose may have a significant impact on how your will is executed, and what’s more, they keep your will from going into probate.
This responsible individual oversees and manages your estate when you die ensuring that your rightful heirs get what is theirs. This person also has the legal power to liquidate your assets, distribute cash, and pay your debts, expenses, or other liabilities.
Estate planning helps you to avoid family wrangling. The likelihood of your loved ones falling out is higher if your estate goes to probate.
Probate is a court-supervised process that authenticates your will (if you made one). This process assesses the value of your assets, pays off any liabilities and taxes, and then distributes any remaining assets to your rightful heirs.
The probate process can take time, which causes undue stress to your family. What’s more, it isn’t cheap, leaving yet another expense for your loved ones to incur. Estate planning goes above and beyond a will to ensure that your estate does not go to probate. Possible solutions include:
- Providing for the disposition of your assets to a transfer on your demise
- Owning your assets jointly with your spouse, child, or other family members
- Creating a revocable trust and transferring your assets into the trust while you’re alive
Leave a Legacy
Estate planning could also be the perfect vehicle to communicate what’s important to you. Whether you’re ensuring the financial security of your family and loved ones, or supporting a cause you care about, estate plans help you to communicate your values and leave behind a legacy.
Your loved ones can continue this legacy in your name, safe in the knowledge that they are doing what you wished. This legacy protects your money and ensures that it goes to purposes and causes that you would have supported if you were alive.
Estate planning is vital for the well-being and future of your family and loved ones.
After your demise, you must have a plan in place that specifies your intended beneficiaries and your wishes. Without such a program, your family could face strife, disagreements, embarrassment, and financial hardship.
If you want to learn more about estate planning, call Wealth Advice on +65 XX XXXXXXX or contact us here. Our team of expert estate planning financial advisors will guide on you to ensure you have a comprehensive plan in place.