Will writing and CPF nominee.

[OngHuatHuat]

Thanks for the information. Henry.

With or without will, legal cost about the same. Save the cost of will if one is fine with intestate distribution.

I applied for letter of administration and it cost me $1350 all in and the estate is settled within a year including sale of property from date of death.

Most important, must have nomination on CPF. Otherwise, it goes to public trustee and there would be some delay and cost. With nomination, the nominee/s will be informed within a month to make application to collect money.

 

[BBCWatcher]

For those of you who are U.S. persons, here's a "fun fact": the IRS considers the portion of an employer-provided life insurance policy's death benefit above US$50,000 to be taxable income, based on the group premium rate for that portion of the death benefit.

Yes, this is a pain in the butt to calculate. You have to ask your employer what their group premium rate is, then you have to pro-rate that premium (to reflect what portion is above US$50,000) and report that in-kind income on your tax return. Ick.

However, there's a solution: place a beneficiary designation letter on file with your employer's life insurance company that pays the first US$50,000 to your spouse or other beneficiary, and you direct that any death benefit above that threshold be paid to any IRS 501(c)(3) charitable organization. That could be the New York office of Doctors Without Borders, to pick an example. Do that and the employer-provided life insurance is not U.S. taxable.

"Joke insurance," notably employer-provided personal accident insurance, is not considered income for U.S. tax purposes.

 

[maple96]

Yes, and there are some "tricks" here. For example, if you have a spouse and two children then you can do something like this:

99.98%: spouse
0.01%: child #1
0.01%: child #2

Why would you do that? Well, it's an easy way to make sure that your spouse inherits practically everything by default but, in the event he/she should predecease you (or concurrently die), the surviving children will split your CPF assets. .

Stupid trick?

TS, if your wife is younger than u, should both of u die in the same accident, your wife is deemed to have died after u and will inherit your assets, So both of u should discuss to make sure both your assets are distributed to bene both of u agree to. If your wife nominate to her own bene in her own Will which u are unaware of and not your children only, too bad.

Ordinarily you wouldn't/shouldn't name a minor child as a CPF nominee since there are public trustee charges involved, but this'd be a reasonable way to make a single CPF nomination and not have to worry about it much thereafter.

U are wrong, see my comments above!

If u have kids still below 18, it is better to have ehnanced CPF nominations so monies go to their CPF accounts. After they past 18, u can change your nominations.

 

[SKenny]

Thanks for the reply.


One of the reasons why I don't have a will is because I do not want my mum and wife to know too much.

There is no need for your mother, wife or any beneficiary to know about the content of your will.

In fact, even the witnesses need NOT know the content of your will. They only need to witness you signing the will.

 

[SKenny]

I believe it is just as important (if not, more so) to have a lasting power of attorney.

Without a will, your loved ones will still get their inheritance via the intestacy laws (assuming that you are OK with the splits), albeit it will take a longer time.

However without a lasting power of attorney and if you are, say in a coma. Then no one can easily access your assets ,which can be especially critical when it comes to medical care cost.

I would do a lasting power of attorney before I do my will.

 

[BBCWatcher]

If u have kids still below 18, it is better to have ehnanced CPF nominations so monies go to their CPF accounts. After they past 18, u can change your nominations.

I don't think I agree with that, for at least a couple reasons.

 

[a4973]

I don't think I agree with that, for at least a couple reasons.

please share those reasons if possible
thanks

 

[BBCWatcher]

please share those reasons if possible

OK, as a general principle I think it's best if an adult is the primary CPF nominee due to public trustee complications and costs involving minors. Ordinarily that'd be the trusted, primary caregiver for surviving minor children. So I don't think you really get to this particular situation (a minor inheriting CPF assets) very often.

 

[a4973]

OK, as a general principle I think it's best if an adult is the primary CPF nominee due to public trustee complications and costs involving minors. Ordinarily that'd be the trusted, primary caregiver for surviving minor children. So I don't think you really get to this particular situation (a minor inheriting CPF assets) very often.

if nominate as Enhanced to the minor's SA then it will be no loss / cost ? every single cent is transferred up to the specified fraction?

 

[fr33d0m]

if nominate as Enhanced to the minor's SA then it will be no loss / cost ? every single cent is transferred up to the specified fraction?

SA is locked until the child reaches 60+.

What if he/she needs money much earlier?

 

[BBCWatcher]

if nominate as Enhanced to the minor's SA then it will be no loss / cost ? every single cent is transferred up to the specified fraction?

Maybe not. If the nominated funds exceed the Full Retirement Sum plus Basic Healthcare Sum, then the excess will be paid in cash to the minor and subject to public trustee fees and rules. It'll depend on what your total CPF balances are upon your demise, how many Enhanced Nomination Scheme nominees you have, and what their balances are when they receive ENS dollars.

Bottom line: a surviving adult (cash) nominee works best, in my view.

SA is locked until the child reaches 60+.

Well, age 55 anyway.

What if he/she needs money much earlier?

Yes, that's a concern.

There's a separate scheme for parents of special needs children called the Special Needs Savings Scheme. If that scheme applies to your situation, it looks like a good choice.

 

[maple96]

I don't think I agree with that, for at least a couple reasons.

OK, as a general principle I think it's best if an adult is the primary CPF nominee due to public trustee complications and costs involving minors. Ordinarily that'd be the trusted, primary caregiver for surviving minor children. So I don't think you really get to this particular situation (a minor inheriting CPF assets) very often.

Not even one valid reason for disagreeing? U never know when death will happen, u need to make a nomination and make sure your kids future are taken care of especially when both husband and wife die together!

 

[maple96]

SA is locked until the child reaches 60+.

What if he/she needs money much earlier?

They can withdraw at 55. If your enhanced nomination is to MA, this will help them take care of medical and premiums.

If CPF is your only asset, ie u do not have other liquid assets to distribute to them (eg stocks/shares, bank accounts, insurance policies etc) which u can nominate a trustee/guardian to take care of it for them in your will, then I would suggest u not use CPF enhanced nomination. U need a will in case both u and your wife die at the same time and your children are still below 18.

If u have plenty of other "liquid" assets, it is worth considering CPF enhanced nomination until they are past 18, to avoid cost of administration. U can give 50% to wife, rest kids share, then your wife's cash CPF can help take care of them, if your wife survive.

 

[loonglow]

For shares held by cdp, it's a little troublesome. For shares under CPFIS, the custodian agreed to transfer shares to my cdp.

Hi Henry, can share what happened to stocks held by cdp?

 

[mummy1234]

Easier to do joint account before someone dies. That is what my dad did. The CDP pple went to hospital to get my dying dad to thumbprint and change his account to jt account with my mum.

My mum after my dad passed on also brought me to do jt account with her and my sister. The dividends goes to our jt account now. But must know the CDP account number, which I don't, of my mum if I want to sell. My mum decides whether to sell or not.

 

[henrylbh]

I never made a will cause I am fine with intestate distribution. A will need to be updated now and then.

I have all my assets and liabilities in a worksheet including passwords to various matters like internet banking and access to CPF accounts etc including password to this forum

The worksheet also serves as my diary. My beneficiaries and a 'third' party are informed of my password to access my worksheet in a thumb drive should anything happened to me.

With access to my worksheet, my beneficiaries and third party can do whatever they need before the assets are actually crystallised as assets of the estate.

In the worksheet I also stated what should be done and it's up to the beneficiaries and third party to decide whether to adhere to my dying wishes.

 

[peacefulday]

The rule of distribution under the intestate succession act for estate, if one bachelor die without Will, and if parents are divorced, lets say father left and MIA for years, but the missing father is still eligible for 50% share from the leftover asset, although the mother and the late bachelor had been stayed together all the time.

Special note for those opt for hdb tenant in common.

 

[maple96]

Hi Henry, can share what happened to stocks held by cdp?

U can read how to do it and procedures here:

Transfer for Estate of the Deceased

(quite lengthy to copy it here)

Someone suggested converting to joint account prior to death, worth considering if can be done in advance.

 

[fr33d0m]

They can withdraw at 55. If your enhanced nomination is to MA, this will help them take care of medical and premiums.

If CPF is your only asset, ie u do not have other liquid assets to distribute to them (eg stocks/shares, bank accounts, insurance policies etc) which u can nominate a trustee/guardian to take care of it for them in your will, then I would suggest u not use CPF enhanced nomination. U need a will in case both u and your wife die at the same time and your children are still below 18.

If u have plenty of other "liquid" assets, it is worth considering CPF enhanced nomination until they are past 18, to avoid cost of administration. U can give 50% to wife, rest kids share, then your wife's cash CPF can help take care of them, if your wife survive.

No parent should concern much about what happens to the children when they are 55 or older. If you are concerned now, you fail your duty as a parent because your children can't take care of themselves barring disability/illness.

Thus, I don't see a point with CPF nomination to minors' SA.

 

[maple96]

No parent should concern much about what happens to the children when they are 55 or older. If you are concerned now, you fail your duty as a parent because your children can't take care of themselves barring disability/illness.

Thus, I don't see a point with CPF nomination to minors' SA.

It is your choice! Objective is to avoid cost of admin for minors, if u dun mind paying, choose cash CPF or dun give them at all as minors or hope u will not die while they are still minors.,

This thread is about estate planning: how to avoid preparing a will, how to avoid cost of estate distribution, how to expedite estate distribution at min cost and delay, how to avoid dispute and ugly scenes after u die, etc.