Estate Planning

Family means everything to you — protecting and providing for your dependents after you are gone requires timely and proper estate planning.

Wills

A Will is a written document stating how your assets and money (the estate) are to be distributed when you pass on. The person making the Will is known as the Testator and those who inherit under the Will are called Beneficiaries. The Executor, nominated by the Testator administers and distributes the estate upon the death of the Testator. A Will can be drawn up as soon as you reach legal age, and can be changed at any time.

A Will should be revised and updated to reflect big changes in your personal circumstances. It should be tailored to your current family and financial situation. Some of these changes may include:

• Marriage
• Divorce
• Birth of an offspring
• Substantial change in amount or kind of property owned

In the event of death without a Will or to die Intestate, your assets will be distributed in accordance with the Intestate Succession Act and the law of your domicile status.

While often neglected by many, Wills ensure your assets are preserved and distributed according to your wishes. Wills also take away the confusion at such distressing times and may expedite the legal process in settling the estate.

Power of Attorney

The Power of Attorney is a legal document created by one person who authorises another person to act on his/her behalf. In the context of Singapore, the creator of the document is known as the Donor and the person being entrusted to act is called the Donee.

The Power of Attorney is a crucial document when a crisis situation occurs after an accident or illness. When the donor is incapacitated to sign legal documents, the donee has decision-making powers over the donor’s property and financial affairs.

Trusts

An important tool in estate planning, trusts can help provide for your family and protect your assets. Trusts are legal agreements that put money and assets aside for a specific reason. With the ability to be set up by an individual or a group of individuals, trusts are a powerful tax-planning tool and have many other uses, which are of equal if not greater importance.

A properly drafted and managed trust can confer advantages under any or all of the following:

Asset Protection

The more assets you have, the greater the need for you to protect them for your family. By setting up a trust, your transferred assets are safeguarded by the trust structure and may not be seized by creditors in the event of a financial crisis.

Estate Planning

Setting up a trust can potentially ensure your assets are protected for the people you intend to leave your assets to.

Avoiding Probate

With a trust in place, probate can be avoided when the grantor dies. Probate is a court process involving the appraisal of the deceased person’s property, paying off debts and taxes and distributing the remainder according to the Will. Having a trust allows your nominated beneficiaries swifter access of assets transfer without the hassle and high-cost.

Tax Planning

Trusts are often set up for the purpose of transferring ownership of a person’s assets outside of his/her estate in order that they will no longer form part of the property owned by the grantor and therefore not be subject to estate tax.

At AAM Advisory, we can refer you to a specialist tax adviser who can assess your situation and provide advice.

Care for the Aged and Minors

Trusts can be crucial in ensuring that the needs of young children, the aged or disabled people are taken care of and not abused by a guardian.

Other Potential Benefits of a Trust:

• Confidentiality
• Avoiding forced heirship
• Protecting the weak
• Preserving family assets
• Continuing a family business
• Gaining flexibility with your assets

As part of a sound financial plan, trusts may provide effective legal structures that may ensure your assets and estate are managed the way you would like.