Introduction

People are becoming increasingly aware of the need for legacy planning, yet nowadays, it is still not uncommon to find people who die without a will. Procrastination and a misconception that it is costly to draw up a will are perhaps some of the reasons that explain this situation. Inevitably, there are some out there who have taken the step of writing their own will without engaging a lawyer.

However, drafting your will on your own is not without its risks. There are a number of pitfalls that those who are not legally trained might fall into. This article attempts to highlight some of the key considerations to take note of.

Formal requirements of wills

First, under section 4 of the Wills Act 1838, only persons who are 21 or older can make a valid will. Any will made by a person under the age of 21 will be invalid and unenforceable.

Second, while you may write the will yourself, you will still need to get 2 witnesses to sign it. The 2 witnesses have to sign it at the same time. This requirement is meant to ensure that there are witnesses who can attest to the fact that you executed the will of your own free will and while of sound mind. This will be important in the event of any challenge to your will.

Third, it is important to note that under section 2(1) of the Trustees Act, the executors you appoint in your will are actually considered trustees of your estate. This means they are also subject to the rules found in the Trustees Act. Under section 36(1)(a) of the Trustees Act, the maximum number of executors you can have is 4.

Joint tenancies and joint bank accounts

In our June 2022 newsletter, we covered the topic of properties held under joint tenancies and the fact that many people fail to realize that you cannot control who inherits such properties through a will. By way of recap, under a joint tenancy, when one of the joint tenants passes away, the remaining joint tenant(s) automatically inherit the deceased’s share of the property.

Similarly, for joint bank accounts, when one of the account holders passes away, the monies in the account may potentially go to the remaining joint account holder(s), rather than being distributed according to your will.

Thus, you should always check the fine print before you open a bank account to see if there is a “right of survivorship” clause. If there is such a clause, then your will might potentially be ineffective in relation to the bank account. There have been cases where family members ended up going to court over disputes relating to joint bank accounts, with the surviving joint account holder insisting that she should get all the money in accordance with the right of survivorship clause, and the beneficiaries under the will arguing that the money should instead go to them in accordance with the will. In such cases, the court will look at what the intention of the deceased was in relation to the joint account monies.

Unfortunately, proving what the intention of a dead person was is often a difficult if not impossible endeavor. Ultimately, the court will have to consider all the available evidence and make do with the evidence before it. There is therefore much uncertainty and you can never be sure which way the court will decide.

CPF monies

You cannot bequeath your CPF monies using a will. When a person passes away, his CPF monies will be dealt with in one of 2 ways. First, if no CPF nomination has been made, then the CPF savings will be distributed by the Public Trustees Office based on the Intestate Succession Act or on the Muslim Inheritance Certificate, whichever applicable. You do not get to choose who receives the CPF savings. The process for distribution through the Public Trustees Office can take up to 6 months, and is also subject to an administrative fee (which will be deducted from the CPF savings before distribution).

The second method for dealing with CPF monies – namely, a CPF nomination – allows you to avoid the hassles and difficulties associated with distribution via the Public Trustees Office. The distribution can be done quickly and conveniently, and it is also free. To make a CPF nomination, simply go to the CPF website and log in with your Singpass to make an online CPF nomination.

You are allowed to choose anyone to give your CPF monies to, as well as how much CPF monies to give to each nominee. However, just like a will, you will need to appoint 2 witnesses who can attest that you have made the nomination willingly and consciously.

Do note that your CPF nomination is automatically revoked upon marriage (the same applies to wills) but on the other hand, divorce will not revoke your nomination.

Insurance policies

Life insurance policies are insurance policies that pay out a lump sum amount to the insured’s dependents upon the death or total permanent disability of the insured. The policy will require you to nominate someone whom you want the insurance monies to go to. As time passes, circumstances may change and you may no longer wish for your nominee to receive the insurance monies.

Depending on whether the nomination is a revocable or irrevocable nomination, your will might not be able to override the nomination. Thus, you should always read the terms and conditions of your insurance policy carefully to determine if the nomination you are making is a revocable or irrevocable one. In order for the insurance proceeds to be distributed in accordance with your will, the nomination must generally be a revocable one.

In the event that the nomination is an irrevocable one, then if you want to change the beneficiary who will receive the insurance proceeds, you will need to try to get the nominee’s consent to revoke the nomination. Of course, the nominee naturally would have an incentive to withhold consent. Thus, in the case of an irrevocable nomination, you might have your hands tied.

Where the nomination is a revocable one, that is not the end of the story. Revoking a revocable nomination through one’s will is cumbersome. In order for insurance proceeds to be distributed in accordance with the terms of your will, the following steps will have to be taken:-

1. Give the insurance company written notice of your intentions regarding the distribution of the insurance proceeds, along with a certified copy of your will. Naturally, this means disclosing your will to the insurance company;
2. Under section 5(3) of the Insurance (Nomination of Beneficiaries) Regulations 2009, your will must specify the name of the insurer, the policy number and the names and NRIC/passport numbers of the intended beneficiaries; and
3. You must ensure that your will is a valid one i.e. it complies with all formal requirements and has not been revoked by marriage.

Instead of using your will to override your revocable nomination, you are probably better off going to the insurance company to change the nominee. However, the process, length of time and expense involved in doing this would vary from company to company. While this process may not necessarily be smoother or faster than using a will to override the nomination, the key thing to note is that you would not have to disclose your will to the insurance company. Thus, if privacy and confidentiality are very crucial to you, then you should use this method instead.

How SMTP can assist

Nowadays, there are still a good number of people who are without a will. Of those who do have a will, most choose to have a lawyer draft it. This begs the question – should people be encouraged to write their wills themselves? Would this bring down the number of people who die intestate?

In light of the above, before you attempt to write your own will, you need to be aware of the potential pitfalls that you might encounter, especially if you are not legally trained. Thus, it is important to identify these possible issues and address them early on.

At SMTP, our FLP team provides a suite of services which includes advising and assisting on estate planning matters. Tapping on our wealth of experience and resources, we can guide you through the entire process of estate planning, be it advising on CPF, property and insurance matters, drafting your will, or revoking your joint tenancy/insurance nomination/CPF nomination.

We have a Wealth & Legacy Screening Programme, where we will take the client through a screening process that touches on the family and the family dynamics, the asset class and its situs before we give our recommendations on the possible structures for our client’s considerations.

Conclusion

SMTP’s core philosophy is to provide bespoke legal advice based on our private clients’ specific needs and requirements, as cases always differ on their fine details. Our team of dedicated staff are ever eager and prepared to assist interested parties.

We also believe in close engagement with our clients, paying close attention to their individual facts and circumstances, and tailoring our advice and courses of action to cater to their specific needs and requirements. We understand that legacy planning can be tricky, particularly for someone who is not legally-trained. Be that as it may, our team of professionals with their wealth of experience can assist to guide you through the relevant processes.

Should you or your clients require any assistance in legacy planning matters, please feel free to contact our Business Development Team to schedule a consultation. We look forward to working with you.