"Will" You "Trust" Me?
Wills and Trust
What is a will and why are wills needed?
A will would be the roadmap in allowing beneficiaries to know how an estate is to be distributed in accordance to a loved one’s last wishes.
A few key points to why having a will is important
You get to make the decision in the distribution of your assets to beneficiaries whom you may want to include.
You have the power to appoint a guardian of your choice to look after your young children instead of having the court decide for you.
A personal representative that you trust can be appointed as the executor of your will, as opposed to having the court appoint someone who may not resonate well with you.
Having a will will greatly reduce the chance of having disagreements within the family on their perception of final wishes of their loved one. For example, funeral wishes and whether the deceased would rather be buried or cremated. Or more commonly, the fair distribution of the deceased estate.
Source: Fortis Wills Pte Ltd | Knowing When Is The Right Time To Make A Will
What is a Trust, and what constitutes a Trust?
A Trust is an arrangement where a person (Trustee), holds property as its nominal owner for the good of 1 or more beneficiaries.
A Trust usually comprises of:
Settlor - The person who creates the Trust.
Trustee - Person or Entity that the Settlor appoints to be in authority of the legal title and has the right to carry out duties of a Trustee. A Trustee may also be the Settlor, where the Settlor will declare himself as a holding Trust for the beneficiary.
Beneficiary - Person or Entity named by Settlor to benefit from the Trust.
A few key points why having a Trust could benefit you
A Trust is also used together with Wills in estate planning, to distribute and transfer property accordingly after death.
Provide Spendthrift protection for young children and adults, who may not yet know how to properly manage their finances.
In event of bankruptcy, a Trust will be able to make certain property off limits to claims made by creditors of the Settlor.
In retirement planning, where certain employers(Settlor) have pension plans set up in a form of a Trust, and the employees and their dependants as the beneficiaries.
Allow a certain degree of tax savings by structure of a Trust, in certain jurisdictions.
What could happen if one did not leave behind a Will or set up a Trust?
If a person dies without a will in Singapore, his estate will be distributed according Section 7 in the Intestate Succession Act. In other words, assets may not necessarily be distributed according to wishes of the deceased. This may cause conflict and friction amongst family and relatives in what they perceive to be fair and rightful beneficiaries of the estate. We see this in the press where siblings fight in courts over properties or assets, it turns ugly and can cast a very negative spotlight on everyone, like in the fairly recent case of the property on Oxley Road involving a very famous family. Seems that regardless of status, clearly nobody is immune to the possibility of such conflicts arising.
Source: Fortis Wills Pte Ltd| The Truth About Dying Without A Will
The benefits of leaving one’s wishes written down, and how it is to be carried out even after one’s demise will allow families to grieve without having to worry about things like the distribution of the inheritance or final wishes at the funeral. The biggest benefit, would be that the beneficiaries would not strain relationships trying to come to a conclusion in what is a fair distribution of inheritance.
Wills and Trusts sound wonderful and can help us achieve our goals even after we leave this world, but these are also some reasons why these tools may not appeal to some. The first reason would be the cost. The average joe could possibly afford a simple will, he will also be encouraged to file his Will with the Registry of Wills at a nominal fee. If wills comprises of more complex assets, with specific instructions on how it is to be distributed, the cost of the will will also likely be increased. One should also expect that additions and amendments to a Will, come at a cost. After death, with a Will, the executor will need to carry out instructions of the deceased( Will maker). In exciting the will, the Certified Copy of the Will will be needed to apply for a Grant of Probate Letter, which will authorise an executor to administer the estate in accordance to the will.
You have read about the benefits and advantages of making a will or setting up a trust, but more importantly, leaving a golden legacy for your beneficiaries after you are gone, is what would make writing that will or setting up that Trust worth the time, effort and cost. You can always find out more through Informative seminars or even talking to your Personal Wealth Manager, who would be able to assess your financial situation and point you in the right direction.
Source: Fortis Wills Pte Ltd | Knowing Your Facts About Making A Will
“The things you do for yourself are gone when you are gone, but the things you do for others remain as your legacy” - Kalu Ndukwe Kalu