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Do I need a will? Estate planning questions answered

Estate planning and the very word ‘will’ can send some into a cold sweat. None of us want to entertain the idea that we might not be around one day, but Andrew Talbot from Expat Financial Planning, a division of Global Eye, advises not to put your head in the sand!

Andrew’s one of the only Expat Certified Financial Planners (CFP) in Singapore and a member of the Financial Planning Association of Singapore, so he knows how vital it is to have your financial affairs in order in case of an emergency.

Expat financial planning - writing a will
Andrew’s one of the only Expat Certified Financial Planners (CFP) in Singapore and a member of the Financial Planning Association of Singapore

Having a well-planned will is particularly important for expats. “Estate planning is a complex topic,” says Andrew. “Particularly for expatriates who are likely to have assets in more than one country. Each country has its own taxes and rules regarding inheritance and these may be in direct conflict with each other.”

Read on for Andrew’s answers to all your will related questions…

What is a will?
Generally speaking, a will identifies who will serve as the executor of the Estate, as well as who will receive assets belonging to the decedent (deceased person) and under what terms.

In theory, this means that your assets will be distributed in accordance with your wishes after your death. However, there are numerous ways to structure your assets while you are alive to make sure the right people inherit the right portions of your estate, at the right time.

What are the repercussions of not having a will?
Without a will, it could take two or more years to distribute an international estate. During this time many assets could be frozen, leaving your intended heirs in a very difficult financial position.

What is probate?
Probate establishes the validity of the will and needs to be conducted in each and every country that you hold assets. The way we purchase and structure assets during our lifetime can simplify estate planning by keeping certain assets out of the probate process.

Writing a will
Consider which tax jurisdictions apply to you and your family.

What is a will substitute?
A will substitute allows you to transfer property directly to beneficiaries at the time of your death. A will substitute, or non-probate instrument, can include contracts such as; life insurance policies and IRAs (Individual Retirement Arrangements), life estates and future interests, joint tenancies and trusts. It can also include community property such as bank accounts and real estate with rights of survivorship.

Structuring parts of your estate in this manner will not only expedite the distribution process, but also avoid any costs associated with probate.

Advantages of a will substitute:

  • Avoid probate
  • Easy to amend
  • Revocable until death
  • Inexpensive to establish

What else should we consider when writing a will?
Consider which tax jurisdictions apply to you and your family. A person should have the freedom to leave their estate to whomever they choose through their will, however there are numerous incidents where a will has been contested, resulting in distributions very different to those stated by the decedent.

New York Hotelier Leona Helmsley left $12 million dollars to her dog, intentionally cutting two of her grandchildren out of her will. They successfully contested the will and were awarded $6 million each.

In a recent court case in the UK, a mother left her entire estate of almost £500,000 to various animal charities upon her death. Despite side letters making it clear she did not want her estranged daughter to inherit her money, the daughter was able to challenge the will and was awarded a provision for future maintenance.

Andrew’s final thought
Structure your finances well today to ensure your final wishes are met – even if you do want it all to go to the dogs!

 

2 Battery Road, #26-01, Maybank Tower, 049907
9824 1470 or 6632 8537 | admin@expat-financialplanning.com | expatfinancialplanning.com

 

For more advise on how to get your finances in order, head over to our finance pages.

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