It is never too early to start planning for your family. Ease their burden by sharing your last wishes.
Many people avoid legacy planning and planning for their future healthcare needs. After all, we are uncomfortable with discussing death and sickness. However, preparing for both is essential as it helps prevent future complications for you and your family.
Find out more as we ask Mr Ferris Wee, Master Trainer at the Institute for Financial Literacy, the common questions people have about legacy and healthcare planning.
1. What is legacy and healthcare planning?
Legacy planning is about how you distribute your hard-earned assets according to your wishes after your death. Healthcare planning is preparing for the event that you are unable to manage your daily affairs, due to severe disability or illness.
2. I'm still young and healthy. Why should I worry?
You may be healthy now but if the unexpected were to happen, will you and your family's finances be at risk? Studies have shown that people are increasingly being afflicted by diseases such as stroke or dementia at a younger age.
According to the Ministry of Health, one in two healthy Singaporeans aged 65 could become severely disabled in their lifetime and may need long-term care. Such disability may arise due to a stroke, dementia, severe injuries, or worsening diabetes and other chronic conditions.
3. Isn't legacy planning for rich people? I'm an average Singaporean with some CPF, a little money in the bank and an HDB flat.
This is a misconception. Legacy planning is about how you wish to distribute your assets (and not about how much you have) after you pass on. These could be your HDB flat and the money in your bank account. Without proper planning, these assets may end up with someone not of your choice. Or, you may have outstanding financial matters that may become a burden to your loved ones.
4. If legacy planning is so important, why do many people not do it?Typically, people associate legacy planning with death and try not to think about it. Others feel they still have lots of time left. However, more people are realising its importance, having witnessed the experiences of relatives or friends whose parents died intestate (without a will).
Figures from the Wills Registry show an increase of wills registered, from 3,535 five years ago to 3,911 last year. About 30,000 people under the age of 50 have also drawn up a Lasting Power of Attorney (LPA) since 2010. The number of people making an LPA rose from 2,681 in 2014 to 21,552 in 2020.
5. I have a will. Do I still need a CPF nomination?
Yes, you do. Your CPF savings are excluded from your estate and therefore not covered by the will. Without a nomination, your CPF savings will be distributed by the Public Trustee's Office (PTO) to the legally entitled beneficiaries (usually family members and next-of-kin), according to existing intestacy laws for non-Muslims or Muslim inheritance laws for Muslims.In 2019, The Straits Times reported that a total of $211 million, largely made up of CPF monies, was left unclaimed with the PTO over the last six years. The sum was left by people who died without nominating a beneficiary. The PTO also charges a fee for distributing your unnominated CPF savings.
6. How do I make a CPF nomination?
You can do it in person at any CPF Service Centre or make an online nomination via "my cpf Online Services" on the CPF website. An online nomination is convenient and requires two witnesses, each with a valid SingPass.
7. How do I go about making an LPA?
First, choose someone whom you trust to make decisions for you if you lose mental capacity. Then, decide what powers to grant them. If you have more than one person in mind, decide if they will act 'Jointly' or 'Jointly & Severally'. Fill up the LPA form.Next, see a certificate issuer to certify that you are not acting under pressure or duress. Finally, submit the Form to the Office of Public Guardian (OPG). You may want to take advantage of the LPA Form 1 application fee waiver for Singaporeans which OPG has extended to 31 March 2023.
8. What are my healthcare planning options?
Healthcare planning is a growing concern. You can consider making an Advance Medical Directive (AMD) which is a legal document that you sign in advance to inform the doctor treating you (in the event you become terminally ill and unconscious) that you do not want any extraordinary life-sustaining treatment to be used to prolong your life. It will come in handy when you are unable to express your wishes at that time and be allowed to die naturally, in peace and with dignity.
Then, there is Advance Care Planning (ACP) which involves you having voluntary, non-legally binding conversations with your family and doctors to discuss your healthcare wishes. It could include extent of treatment, pain control options, where you would like to be cared for, where you would like to spend your last days, and what to do should your heart suddenly stop.
ACP also involves nominating a "substitute decision-maker" who can make decisions on your behalf when crisis strikes and you are no longer able to communicate.
9. I have a special needs child. What should I do to ensure my child's well-being when I am not around?
You can consider setting up a trust with Special Needs Trust Company (SNTC) to make provision for your special needs child. Supported by the Ministry of Social and Family Development and National Council of Social Service, SNTC is the only non-profit trust company in Singapore that provides affordable trust services to parents of children with special needs.
You can also make a Special Needs Savings Scheme nomination to set aside CPF savings for the long-term care of children with special needs. Under this scheme, the child will receive monthly disbursements from the parent's CPF savings after the parent's demise.
--Ferris Wee is a financial literacy master trainer at the Institute for Financial Literacy, providing financial education to the public on topics ranging from money management, retirement, investment to estate planning.
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