Introduction
This month’s family legacy planning article will look at the options available for families to incorporate charitable gifting as part of their estate planning.

Amid a crisis like the COVID-19 pandemic, Singaporeans’ support of the less fortunate and worthwhile causes has shined through. Institutions of a Public Character (“IPCs”) received $1.01 billion in 2020 and a record S102 million was donated to the approximately 600 charities through Giving.sg, an online donation platform by the National Volunteer and Philanthropy Centre, in their financial year ended March 2021. The latter sum represents a two-and-a-half times increase of the sum raised through Giving.sg in the previous financial year.

Families have the opportunity to make charitable giving a part of their legacy planning process and allocate their wealth in a way that is consistent with their values and desired legacy. There are various options to donate assets to charities and we hope this article will enable your legacy planning and goals.

Forms Of Giving
1. Will nominations
A straightforward way to allocate money for charitable giving upon death is through bequeathments in a will. Clauses can be drafted to meet your specific needs and goals: you can choose to donate a specific sum to charities such as the fundraising arm of the National Council of Social Service, Community Chest (“ComChest”), or percentage of your residue estate after specific allocations to other parties. You can also choose to donate specific sums from different classes of assets like profits from the sale of a property.

Your needs should be discussed with legal advisers who can guide you and draft a will that will reflect your legacy plans. Your lawyers can also provide advice on structuring your will and nomination of trustees who you trust to understand and take charge of the distribution of your estate in accordance with your wishes. Overall, legal advice is important to ensuring that there are no complications during the probate process that will hinder your charitable goals.

2. CPF nominations
You may also allocate your remaining CPF funds to a charity after your passing by way of a CPF Nomination Form. Your CPF funds can be distributed to a maximum of 8 persons/ organizations by way of online nomination while there is no cap on the number of beneficiaries if you make your nomination in-person at a CPF Service Centre.

Beneficiaries can be charities or societies that are separate legal entities who are capable in law of holding CPF monies in their own name. Examples of large charitable organizations that are capable of standing as a beneficiary include ComChest or the Community Foundation of Singapore (“CFS”).

Certain assets are not covered under a CPF nomination, such as properties bought using your CPF savings. Additionally, marriage will automatically revoke any existing CPF nominations you have previously made. Your lawyers can provide further pointers that you should be aware of when making your nomination.

3. Insurance policy nominations
Life insurance policies may be distributed according to your will or by way of an insurance nomination under the Insurance Act (Cap 142). Beneficiaries of your insurance policies can be charities or societies that are separate legal entities that are capable in law of holding insurance proceeds in its own name.

An important note for your planning is that a will nomination will only override an existing insurance nomination in certain circumstances – a trust nomination can only be revoked/changed with the consent of all nominees while a revocable nomination allows you to change/remove nominees at any time without your nominees’ consent. Where you are unsure of the impact of the above processes, we encourage you to reach out to your lawyers for a consultation.

4. Set up a charitable fund
Where you would like to have more comprehensive control over your funds intended for charitable donations, setting up a charitable donor-advised fund may provide a more worthwhile investment for your legacy plans. A charitable fund allows greater control of your funds while serving as a less demanding option than setting up a non-profit entity (i.e., charitable trust, public companies limited by guarantee, society) which will have to apply for charity status, IPC status and comply with additional statutory/administrative requirements.

Organizations, such as CFS, enable individuals to set up donor-advised funds that can disburse your funds according to a tailored strategy. They serve to bridge your giving goals to community needs by connecting you with charities within your scope of interest and ensuring that charitable grants under their care are made with high levels of care and accountability through charity due diligence and programme evaluation etc.

There are several types of donor-advised funds: flow-through funds, endowment funds and term endowment funds. Endowment funds invest the donated funds and pay out investment proceeds to charitable causes of the donor’s choice over the long term while flow-through funds can start making charitable disbursements immediately. The different types serve to cater to different charitable intents to meet your philanthropic goals.

Our firm can assist you to explore the option of setting up a charitable fund and advise on the legal documents for the fund’s set-up to ensure that your interests are protected.

Ultimately, legacy gift planning allows you to make impactful donations and accurately reflect your values in your charitable giving. As an established private client firm, our lawyers are well-placed to advise you on your family legacy goals and explore the above options so that you may be assured that your estate will be distributed in accordance with your wishes. Should you wish to consult our lawyers for your legacy planning, please feel free to contact us and we will be more than happy to assist you.