If you are a parent, you need to consider estate planning seriously.


Estate Planning Implications and Potential Problems

  1. 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.
  2. Your children can be the beneficiaries of a statutory trust life policy under the insurance act.
  3. Even if your children are adults, they might not have the financial discipline to manage their inheritance from you.
  4. Your child’s marriage might break down, and their divorce could drain your inheritance to them.
  5. Your children’s credit discipline might be weak, and your inheritance to them could flow towards the creditors unnecessarily.


Estate Planning Solutions

  1. 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.
  2. 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.
  3. You should update your will, CPF and insurance nominations.
  4. You should leave instructions for your executor regarding who will inherit the ownerships of the juvenile life policies.
  5. If your children have the risk of bankruptcy or divorce, consider setting up a trust to hold their potential inheritance entitlement.

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