Thinking about writing a will but not sure about the fundamentals of what you’re signing up for? This simple guide explains the key questions involved so you are aware of the basics before you start writing your will.
The Basics of Writing a Will
A last will and testament, commonly known as a will, is a legal document. It is a plan for your loved ones to understand your wishes and carry them out in your absence. It smooths the way for them to inherit whatever you’re going to leave them, saving time and money. It also prevents confusion and conflict in a time of grief and sorrow.
A will provides control over more than just money. For people with children or even beloved pets, a will can be a place to specify guardians and caretakers. If both parents pass away in a mutual incident, guardianship arrangements specify who will be responsible for the child and how they’ll be supported till they reach adulthood. This following are the basics of what is covered by a will.
Naming the people and organisations that will receive your assets and possessions after you pass away is at the heart of the will writing exercise. There are two ways to distribute assets. One way is through specific gifts of cash, personal possessions, or accounts to specific people. The second way is by assigning a percentage of the remaining estate (after specified gifts, taxes, and debts have been paid) to various beneficiaries, in equal or specific percentages.
For every beneficiary, it is good practice to also name a backup beneficiary in case the person passes away before you do. You can choose to leave their share to their children, to other people, or to charity.
Distributing your estate
It is important to note that accounts where a specific beneficiary has been nominated through a separate process such as retirement accounts (such as CPF), or nominated life insurance policies, are not part of the estate distributed in your will. When a person passes away, these nominations are automatically fulfilled by the organisations that manage the funds. If you’d like these to be governed by your will, you can create a nomination for them to be paid into your estate.
Joint bank accounts and joint properties also operate on the basis of survivorship and do not fall under the assets governed by your will, unless you’re the last surviving owner. So, if you have a joint account with your brother, whoever passes away first, the account will pass to the other person automatically and not go through the distribution in the will.
When a parent passes away, the other parent is automatically granted custody of any minor children. If both parents pass away, and no guardianship arrangements have been made, the child may be taken by the government while a suitable custodian is found and granted custody. Guardianship can have an enormous impact on any child’s life, and most parents would not want a court to make this decision.
As a parent, naming a guardian that you know and trust is therefore one of the most important aspects of writing a last will and testament. Guardians are responsible for caring for children if no parent is living or able to care for them. In most wills, the named guardian is responsible to care for the child’s well being and managing any personal property until they reach adulthood.
If the named guardian lives outside your country of residence, you may also want to name a temporary guardian who will immediately step in to take custody while the permanent guardian arrives and is granted custody by the courts. This process may take weeks, and without a temporary arrangement, the grieving child may be under the care of the public system.
Choosing an executor
When a person dies, even with a valid last will and testament, their debts and taxes are not automatically paid, and their assets aren’t automatically distributed according to their wishes. An executor is a representative the will writer nominates to represent the estate. This person will go through the probate process on behalf of the estate, with the help of legal representation if they choose. They identify all the accounts and assets of the deceased, settle their financial obligations such as debts and taxes, inform all beneficiaries and guardians, and carry out the distribution spelled out in the will.
In order to navigate both the financial and legal process, with or without the help of an attorney, the executor should be someone who is highly trustworthy, capable, and who has the willingness and ability to take on the probate process. It is common to choose a spouse or a close and capable friend or family member.
What makes a will legally valid?
In order for the will to be legally valid, the will writer must be above 21, of sound mind, has stated her wishes clearly, and has signed the will in hard copy along with two witnesses who are unrelated to the will. That is, the witnesses are not executors or beneficiaries of the will or their spouses.
The will writer, also known as the ‘testator’, should also be aware of the extent (and any limitations of) their estate and have a clear understanding of who they are leaving it to and be able to make these decisions entirely independently and record them accurately.
For those in early stages of a mental incapacity but still have control over their faculties, it is advisable to have a medical professional (for example, their doctor or psychiatrist) act as one of the witnesses to the will, to ensure that no question of their capacity arises in the future.
How is the will carried out when someone passes away?
When informed of a person’s passing, assets under their name, including bank accounts, safe deposit boxes, real estate, investment accounts, are frozen by those institutions. If they have a will, the person they have notified to be their executor must locate and review their will, and go through the process of collating all of their accounts, and reaching the next of kin. Either by themselves or with the help of a lawyer, they can approach the court to obtain a grant of probate.
Once obtained, they can approach all institutions where funds are being held to unfreeze the accounts, and place them under an estate account. Funds and assets are then distributed to beneficiaries according to the Will.