If you are a parent, you need to consider estate planning seriously.
Estate Planning Implications and Potential Problems
- If you die without a will, your young children will be entitled to 50% of your estate. If they are minor, their share can be managed by a public trustee until they turn 21.
- Your children can be the beneficiaries of a statutory trust life policy under the insurance act.
- Even if your children are adults, they might not have the financial discipline to manage their inheritance from you.
- Your child’s marriage might break down, and their divorce could drain your inheritance to them.
- Your children’s credit discipline might be weak, and your inheritance to them could flow towards the creditors unnecessarily.
Estate Planning Solutions
- You should assess your children’s level of financial discipline, and plan to disperse their inheritance periodically rather than in a lump sum if you find them lacking in this area.
- You should make sure that your spouse is financially secured, at least for a reasonable period after your death, before you plan for your children financially.
- You should update your will, CPF and insurance nominations.
- You should leave instructions for your executor regarding who will inherit the ownerships of the juvenile life policies.
- If your children have the risk of bankruptcy or divorce, consider setting up a trust to hold their potential inheritance entitlement.