Wills – have you written yours? A step by step guide

One thing that we could all do with sorting is making sure we have a working will – but many of us are put off by how tricky or time-consuming we think it might be when, actually, the process is fairly straightforward, says Chris Potter from Chartwell Associates

List all your assets

Areas include property, bank accounts, investments, pensions, life insurance policies and personal items of value. You should include policy numbers and also where these are located, and whether they are owned by you or are joint assets with someone else (a spouse perhaps).

Also list anyone who may be of help to the executor, for example lawyers, accountants and financial advisers – these people may be needed to help sort out valuations and maybe the transfer of ownership of theses assets.

List the executors

This is the person, or persons, who will actually carry out the instructions in the will. An important point to remember is that this is actually a tough job to do. The executor may have to travel to Singapore, then on to other countries where you have assets to clear probate there as well. They will have to deal with tax authorities, the courts and file returns. Therefore, whoever you choose as your executor must be both mentally and physically capable of doing this job.

It is then recommended that you nominate a second or “back-up” executor just in case the first nominated executor is unable to carry out the duties if and should he be called upon to do so. If you have assets in different jurisdictions, which is highly likely for expatriates, you can if you want, appoint separate executors in each country that you have assets that need to be granted probate, to conduct estate administration there.

Name the guardians (including temporary guardians)

These are the people you are nominating to look after your children if they are minors. They may want reassurance that there is funding available to help them and, as with the Executors, it is recommended that you have a “back-up” guardian in case the first nominated is unable to take on the children, for example through ill health or divorce.

If the guardians are resident in a country other than Singapore (very likely with expatriates) you may want to consider appointing one or two “temporary guardians” to whom you can give authority to look after your children until the nominated guardian arrives in Singapore to take custody.

Do you want to make any gifts? (to charities, family members, political parties)

Before distributing the bulk of your estate you may want to give individual “gifts” to friends or family members or charities or the like.

List the Beneficiaries

Here you will name the people (usually your children or close family members) who you want to benefit from your estate and the amount or proportion you want them to inherit. You may also want to say at what age the children should have access to the inheritance.

If your estate is large (U$1 million or above, which is very likely if you have a life insurance policy) you may want to consider including a Trust to hold the assets until children are mature enough to cope with a large inheritance.

Funeral arrangements

You can make directions for funeral arrangements here if you have any special wishes.

Five things to note

Keep the will as simple and clean as possible. If you get complicated, there is a high chance that you will want to change it frequently, which will cost money.

If things do get complicated (and if you have young children you will probably want to give detailed instructions to the guardians), you can leave instructions via a “Memorandum”. This can be a multi-page document giving all sorts of guidance to executors and guardians. It is not a part of the will, but is attached to it and can be read together with the will. Because it is not part of the will it can be updated frequently without cost. This may also be the best place to discuss funeral arrangements.

The list of your assets should be referred to in the will, but “attached” to the will. This list will probably change very frequently with the addition of new bank accounts, new investments or closing an account for example. If it is part of the will, every time you want to make a change you will need to get the will out, make the change, get it witnessed and this will cost money. If it is attached to the will and dated, the list can be updated very easily and quickly without costing money. If it is dated, then the executor can see very quickly how up to date the list actually is.

If you have a life insurance policy, in all probability it will have been set up incorrectly. Most people take out a life insurance policy as they have people who are financially dependent on them. They then take out a life insurance policy on themselves. This means that they “own” the life insurance policy. The problem here is that if they die, the life insurance company will pay the policy benefits to them as they are the “owners” of the policy. This means that the benefits of the policy will end up inside their estate, which could cause an inheritance tax problem and be trapped inside their estate until “probate” is granted, which could take many months.

If you have a life insurance policy it is important to have this reviewed and if necessary have your spouse, children or other family members added as beneficiaries of the policy. If you belong to a country that has inheritance or estate taxes, you may need to consider writing the policy into a Trust.

If you are employed by a large or international company you may have some “death in service” benefit in your employment contract. Most people have a vague recollection of having this, but very few people actually know anything about their benefit. You should find out exactly what you have and you should also make sure that you complete the nomination of beneficiaries, so should anything happen to you the payment goes to the people you want it to go to. Otherwise, the payment could be delayed for many months or until “probate” has been granted and your will approved by the courts.

5 Power of Attorney: We recommend that all our clients consider the ramifications of becoming unable to look after their affairs through; accident, old age or mental illness. Arranging an ‘Enduring Power of Attorney’ basically nominates, and gives the legal authority to, someone, for example your spouse, to act on your behalf in relation to your personal welfare, affairs and finances should you be deemed incapable. Although this is not part of making out a will – it should be addressed at the same time as completing this last step –  it completes the job.

Finally, once you have made out a will, it is important that people close to you know that you have one, and where it is kept. Also you should not just stop there. Your will should be kept up to date with your changing circumstances so should be reviewed regularly.

Chris Potter, has been working as a financial adviser for the last 25 years and is a Director and founder of Chartwell Associates Pte Ltd

48A Circular Road
Singapore 0494043

Tel 6225 5707