Doing a will in preparation for the future is quite a simple task.
The problem is that,
1) it's like insurance. There's no real urgency. Most people will do it tomorrow...
2) Some people are pantang, or superstitious.
3) People don't know how to distribute their assets so they just leave it to the "default", which is to die intestate, which means just follow the default formula.
Ok, so what happens usually.
First, there is the house. Most people have a Joint tenancy when they buy their property.
This means, when one party dies, the remaining value of the asset goes directly to the other party.
This also means it's not possible to will the value to anyone else.
Alternatively, we bought our property under tenancy in common, which means we CAN will our property to other people, or even sell away our part of the property.
CPF and Insurance
For both CPF and most insurance, it is possible to set nominees. Once a nominee is set, the will doesn't really hold any weight.
So if I nominate my wife in the insurance policy, but will my insurance money to my mum, it doesn't really matter, my wife will still get the money from the insurance policy.
Same for CPF.
(This is my understanding, please correct me if I'm wrong.)
IF no nominee is set, then the CPF and insurance monies will go to the estate of the deceased. Which is all lumped together under the cash and will be distributed via what is stated in the will, or the default if the person dies intestate.
SAF Group Life insurance and most DPS (Dependent Protection Schemes) cannot be nominated, so the insurance money will go to the estate of the deceased and follow the will or intestate laws.
*Add on information by Sinkie
DPS can have nomination.
CPF monies (other than CPFIS) cannot be controlled by will. Even if there is no nomination, the CPF monies (plus CPF-Singtel shares if still holding them) will go to Official Assignee. Surviving family members need to pay sliding scale of fees for OA to distribute the CPF monies according to intestate law or Muslim family law. This fees is deducted from the CPF monies before disbursement.
But CPFIS can be controlled by will (and not controlled by nomination).
Cash, Car & Other Assets
Ok these are kinda easy, money in joint accounts are usually cleaned out by the other party.
Car and other assets can be willed away.
I'm going to only run the scenarios for a bunch of relatively common family situations.
Person dies without children or parents, then spouse gets everything.
Person dies with spouse and children (with or without parents), then spouse gets half, and ALL the other children share the remaining half equally. Parents get nothing.
Person dies with children, without spouse, (with or without parents), then all children share the total equally. Parents get nothing.
Person dies with spouse and parents, without children, then spouse gets half, parents share the remaining half.
More details here.
And I suppose the distribution IS pretty fair, IF the relationships between each other are good.
IF the relationship is not good, or if there's plans to leave more to certain people, then a will is probably a better idea.
So doing up a will isn't too hard, just drop by a lawyer's office or someone who knows how to write clear legal words, say how you want to distribute, then sign along with 2 witnesses.
One thing to note, is that it's usually not possible to dictate how the money is spent.
Example, I give my wife all my money and I want her to spend the money taking care of my parents, and what is left, she can keep for herself after my parent's demise.
This would require a creation of a Trust which is a different matter.
A will just distributes the assets with certain conditions.
Also, there is no storage place to store the will, it's not like there's a centralized location where a will can be retrieved. A will is drafted and signed and stored... ANYWHERE.
So it's important to tell loved ones that a will exists and where it is stored.
Else the will will just be lost or cannot be found when needed.
For me, I have willed everything to my wife, and vice versa.
With the expectation and mutual understanding, that we will take care of each others' parents and give them a certain amount of money every month until their demise.
We have also discussed that all our willed assets, cash, investments, insurance policies, CPF, to be invested into index trackers MSCI World, MSCI EM, which need to be managed by reputable managers.
Besides that, I hope that she will continue to be frugal if I'm not around anymore.
As for each of us taking care of the other person's parents, I am quite confident that both of us are ok to do that.
Oh and the reason why we don't will a portion of our assets to our parents is that we both think our parents aren't frugal and that it would be better for the surviving party to dispense a certain amount to them monthly for them to spend so that the funds will last longer.
So doing a will isn't really hard, just a couple of hours with a lawyer friend, who might be able to do it for you for free, or just drop by a small legal firm or estate planning firm and they will be able to help you draft a will for a couple of hundred of dollars.
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