Last updated on August 15th, 2019 at 06:33 pm
It is an undeniable fact that we will all pass on some day. I have seen young parents who are still ill prepared in ensuring a smooth financial transition for their family in the event of their demise.
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My grandmother died a year ago at the age of 93. However, until now, we are still facing difficulties in trying to claim her Central Provident Fund (CPF) money.My grandmother had a will, but the CPF Board said that it does not accept wills as CPF is not considered part of the deceased’s estate.
We therefore had to prove our relationship to my grandmother. My grandparents did not have a marriage certificate so we submitted a grant of probate, dated 1978, to prove their relationship instead. But the CPF Board said this was not valid.
Below are some of the tips so that you can provide financial security for your family through nominations. You can never know what kind of weird obstacle will be in the way if you leave it to chance!
(1) Have a valid nomination of your CPF
Some, whom I have encountered, have no idea if they have done their CPF nomination. Some have done so before they were married and assumed that the nominations were still valid since no nomination has been made thereafter. Sadly, it is far from the truth.
A marriage will automatically revoke an existing nomination
If your CPF nomination has been revoked or if there is no nomination, the CPF monies will be distributed accordingly to the Intestate Succession Act (ISA). If you have beneficiaries who are below the age of 21 years old, the money will be held in trust by the Public Trustee. It becomes a problem if your spouse requires the money immediately to support the children financially.
Nomination of CPF is free. You may download it and complete it with the witness of 2 people. Alternatively, CPF service centre can provide you an instant service to complete it over the counter.
(2) Have a valid nomination of your insurance policies
It is likely you have life insurance coverage. Do you know the benefits of nominating your insurance policies?
As mentioned in “Your Guide To Nomination of Insurance Nominees”, making a nomination is not compulsory. However, the purpose of doing so is to give you a legal means of distributing the policy benefits to your nominees. If your insurance plan is not nominated, any “proper claimants” are allowed to claim up to $150,000 from the policy. The remaining payout from your insurance policies will be withheld till your Grant of Probate (With Will) or Grant of Letter of Administration (without Will). This process can take up to 2 years! Nominating your insurance policies can solve this.
It is free to do a policy nomination. It also requires 2 witnesses.
Alternatively, centralise all your insurance benefits through a Will
Similar to nominating the insurance, you can prevent all your assets from being subjected to the ISA. You can have control over who to give, when to give, how to give and how much to give. Instead of nominating each policy individually, a Will allows you to centralise the distribution of your policy benefits.
With a will, you can also specify a guardian for your children in the event you and your spouse passes on. This is better than relying on the court’s judgement as to who is deemed fit and this will increase the psychological strain on your child if he is made to choose who he intends to stay with. Take note that CPF monies cannot be distributed under Will. Therefore, remember to nominate your CPF monies.
But a will requires planning. Are they blind spots to look out for?
How to get started with a will? Contact us below