Many have a will prepared for their family and loved ones in the event of their death. However, what is the importance of having a will, when should you start writing one, what goes into them, and how can you get it done?
Speaker Eileen Sim of PreceptsGroup International answers these questions and more to help explain why you should have a will. As an estate specialist, Eileen helps clients with their wills and provides further advice.
Q: What is the importance of having a will?
A: It is to ensure that all assets are distributed according to your wishes and to make the entire process more seamless. Let’s say you didn’t state everything clearly — people will have doubts, and ask how the assets are going to be distributed. It will cause potential conflicts among the family members in the future. How do you want to distribute it? Who do you want to distribute to? You have to think about whether this distribution will help them in terms of their life or in the future.
Q: Do you think that everyone should have a will? Isn’t it something that you do only when you are much older/retired?
A: In our field, we have seen a lot of cases. As long as you own a HDB flat or you’re working and you have savings that you earn and have insurance, these are substantial assets. Regardless of your age, whether you’re young now, or whether you’re old, you have to think of these assets.
If something were to happen to you, and you had to give them to your parents, would they be able to handle this amount? Will someone come along to cheat them of this money? You never know who is a friend or foe when it comes to money.
When you’re at a mature age and have children, will the assets be passed down to them, or held by a guardian? And how do you know that the money really ends up in your children’s hands, and how will it be handled?
I know of cases where people unfortunately pass on and leave behind their children. Their children have no access to the money simply because they do not have a will and all the assets go to another family member because the child is under 21 years old.
Q: What happens if you don’t have a will?
A: In Singapore, there’s a law called the Intestate Law. If you don’t have a will, it will follow the intestacy law. So it’s 50% to the spouse, 50% to the children. If the spouse is no longer around, it’s 100% to children.
If the person had no children, then it’s 50% to parents, 50% to the spouse. If there is no spouse, it’s 100% to parents.
If there are no parents, then it goes to the siblings and uncles, aunties, your niece and nephew. Finally, if there’s really no one, which is quite impossible because you definitely have some relatives, then the government will get the money.
Q: What should go into a will?
A: Executors and trustees are important, because they are the people who execute the will and hold onto your money. A substitute executor is also important. On many occasions, people will only appoint one executor, and if one of them passes away before you, there will be no one left to execute the will. This will create problems.
Q: What are some mistakes that you often see in wills?
A: Many people don’t factor the common disaster clause. I’ve met quite a few initially who they bring their will over for me to review, it’s 100% to each other.
This means that the husband gets 100% and the wife gets 100% of each other’s assets. So I ask, what if they were to die together?
If both of them were to go together, and they cannot determine the time of death, they’ll go by age to see who is the one who’s deemed to go first.
The one who died later will inherit everything, and then his or her estate will be distributed according to intestacy law, which is to his or her parents. A lot of people don’t know that.
Q: When should you start writing a will?
A: If you can, do it now, when you’re in sound mind and great health because unforeseen circumstances can happen.
I have encountered a few urgent cases. One of which was when a client came by and wanted to do a will because she had a brain surgery the next day, and the survival according to the doctor was not high. We could see that she wasn’t thinking well as she was so stressed out about surgery. She kept changing her mind over the distribution.
I always tell clients, “don’t wait until something was to happen. You won’t be able to predict what will happen as well. So if you have thought about it already, then just do it now because you have to, and as I mentioned, there’s a review every two to three years. You can amend it as time goes by as well. So why not draft it now and then change it along the way?”
Q: Are there any fallacies people have of wills?
A: One of the most common fallacies people have is that wills are expensive. In fact, it’s going to cost even more if you don’t have a single will done up.
Potential disputes will cause legal fees to pile up caused by disagreements on how the assets will be distributed, as said earlier.
Another fallacy is that people who don’t have much assets think they don’t need a will.
Everything you own can be considered an asset, such as your home.
In summary, I feel that when you do up your will, don’t think that it’s very simple.
You have to think through from the point of view of your beneficiaries when they receive the money, and the temptations that may come from third party influence. Don’t just assume that there won’t be any problems.
There’s a saying that’s really true when you talk about money: Relationships don’t matter at all.
You have to think through all this while you’re adjusting your will.