Families
Estate planning challenges for newlyweds, parents, and blended families emphasise the importance of careful considerations.
Overview
Congratulations on tying the knot and stepping onto the next milestone! Marriage does change numerous priorities in our lives, and estate planning is one of them. A change in marital status also do has direct consequences such as revocation of any prevailing Will and CPF nomination, and a change in the beneficiary rights according to Intestate Succession Act. You might fall under this category if you’re the sole breadwinner or both you and your spouse are grossing reasonable incomes.
Challenges & Pitfalls
-
Elderly parents could be completely excluded from your estate if you passed on prematurely. This happens because the spouse now has the first claim to your estate according to the Intestate Succession Acts. This is especially stressful for the elderly parents who may depend heavily on you.
-
A huge confusion might possibly erupt over who would be the rightful claimant of your life insurance proceeds. According to Insurance Acts, spouse and parents have equal rights to be the proper claimant of your insurance proceeds.
-
With marriage comes other significant milestones. Today, it is very common for newly married couples to commit a significant amount of their assets into acquiring a matrimonial home, combining financial assets under joint ownership. However, premature death or mental incapacitation could result in huge liabilities for your spouse to shoulder. Such unfortunate events could even leave your dependents in addition, a huge change in your net worth could potentially leave your estate inadequate to provide for any dependent if any. Debt cancellation, estate adequacy and liquidity are key concerns.
-
If a common disaster strikes, according to the survivorship or (Commorientes), the younger of the couple is deemed to outlive his/her spouse. Without proper estate planning, a larger portion of the combined estate would be distributed to the extended family of the younger spouse. Such an arrangement may not be the most ideal one for both families.
-
Overview
At this stage of your life, you might have the significantly overwhelming responsibility to provide for both your elderly parents and your children who are minors. This responsibility further inflates when you’re the sole breadwinner of your household. When you are the pillar of support for them, any lack of planning would expose you to disastrous outcomes. Comprehensive estate planning is no exception as well.
Challenges & Pitfalls
-
One of the greatest concerns that you might have would be the welfare and upbringing of your children. Along the worrying concern of providing them financially, allowing them to continue to live comfortably with a roof over their heads is crucial as well. Minors are unable to inherit properties and without proper planning, they may run the risk of losing their beloved home.
-
If you pass on without a will, your young children will be entitled to half of your estate, distributed equally among each other. Until they are 21 years old, their shares would be managed by the Public Trustee Office which typically charge a hefty amount of estate admin fees per annum. These fees might greatly affect the natural guardian or legal guardian, of which arise subsequent sets of challenges.
-
Guardianship is commonly overlooked. Picking the right guardian is not a straightforward decision. You may need to consider if both the guardian and your children are able to get along well together, the guardian willingness to act in the best interest of the minor, and the macro environment the minor grow up in, which may alter their values.
-
It is common to purchase insurance for your children, such as life, sickness and accident coverage. However, they cannot inherit these policies if they have yet to attain 18. The worst scenario would be a policy lapsing. If your children were to develop any condition which might exclude them from insurance, a lapsed policy would mean that they lost their existing protection.
-
What We Do
We are committed to offering comprehensive planning and solutions for wealth distribution, wealth succession, and estate administration for both individuals and families.
.png)
.png)
.png)
.png)
Overview
If you’re into your second marriage, your estate plans may be slightly more complex, especially if there’s children from your first marriage involved. children from your previous marriage might not get along harmoniously with your new spouse and children, which often leads to resentment and conflict. If open communication is absent, these negative feelings might surface upon your death or mental incapacitation. This is especially so when the age of your children and your new spouse are similar. Perceived unfair distribution of your estate could arise easily by the distribution of Intestate Succession Act, possibly from elderly parents, ex-spouse or children from current marriage or previous marriage. In summary, managing the expectations and relationships of all parties from previous and current marriage is a very delicate task and it could easily fall into ugly disputes, and sometimes, litigation in family courts.
Challenges & Pitfalls
Below are 8 main concerns which you may similarly encounter too:
-
How to protect the assets while entering a new marriage and whether the accumulated assets would be part of the matrimonial assets in your second marriage?
-
How to ensure that the property left by the ex-spouse ultimately passes down to any children of that marriage?
-
How to ensure that the current surviving spouse has sufficient resources to provide for his/her needs upon your unplanned demise or mental incapacitation?
-
How to ensure that you do not unintentionally exclude your children from the first marriage from your estates when your current spouse dies subsequently? This can happen to joint assets with your current spouse.
-
Stepchildren have no legal position in the Intestate Succession Acts. Without any estate planning, they will be excluded totally from your estate. How do you avoid that?
-
If you are in your second marriage and pass on before your current spouse, the children of the first marriage could potentially be excluded from your estate if you pass on without a proper estate plan.
-
The legal position of stepchildren in S49L (Irrevocable Trust Nomination) of insurance policy is unclear. Could there be a way to ensure rightful distribution to them as well?
-
Upon your new marriage, any prevailing Will and CPF Nomination would be revoked. Earlier Insurance nomination would remain valid, but it may not fully address your current circumstances.
-