Many might mistake estate planning to only be relevant for the rich and wealthy. However, contrary to popular belief, it can be beneficial for everyone.
Estate planning just means putting a plan in place to decide and secure who will inherit each of your assets when you pass away. After all, for most of us, our constant focus is on looking for ways to earn more and increase our assets. But what happens to them when we’re gone?
Estate planning is not just crucial for our future generations but carries other implications as well.
We’ll share with you why it’s important for you and your loved ones below.
1. Choose who inherits your assets
For many of us, we’ll have things (known as assets) to leave behind to our loved ones. Whether this is in the form of a house, stock portfolios, real estate investments, or even your most cherished possessions.With an estate plan in place, these assets will be inherited by your nominated heirs.
However, in the absence of an estate plan, in the case of a Singapore resident, the inheritance law of Singapore usually comes into place. This may not be how you would wish for your assets to be distributed.
2. Your look after your family’s way of life
Estate planning, through the avenues of investments and insurance, provides your loved ones with a financial buffer so that they can continue living comfortably as you intended. This is especially the case if you were the main breadwinner and were to pass away leaving your dependents unable to pay the bills and mortgage.
3. Estate planning helps you avoid family disputes
Most family disputes occur during the distribution of property -- especially if you have more than one marriage or adult children. Things can get messy quickly during these discussions and may even cause rifts between family members.
4. You enjoy peace of mind
Having an estate plan in place means you can sleep at night knowing that your loved ones and dependents will be taken care of, especially if you have young children.
This allows them to only have access to the assets and money at the appropriate times as stipulated by yourself. This will reduce the risk of your children misusing the funds that may have been intended for their education funds, for example.
Estate planning: more than just a will
As stated, estate planning isn’t only for the rich. It also doesn’t have to be an overly complicated or expensive process. The earlier you get started with estate planning, the better your chances of protecting yourself, your assets, and your loved ones.
You also want to make it as effective as possible by keeping your plan current. Thus, it’s important to review it regularly and keep it up to date, especially after major life occurrences such as marriage, divorce, or death in the family.
However, if you want to prioritise your own financial situation first before planning who gets which assets, it’s best to get guidance from financial advisors to know your best options.
If you’d like to discuss financial planning, reach out to us. We can connect you to experienced people in the financial planning sector to assist you in all forms of financial planning and management.