Estate planning: A Possible Distribution Plan

My old post.

 I was ask about what is a good way to distribute asset in a will.

In my humble opinion, if Mr Sian have 5 loves one (parents must be included), non are minor,

It is great to give them 10 year income in a lump sum but make it clear to them that the amount is for 10 years and is best to withdraw monthly.

In my own planning, my siblings are included.

For Example:

Using current market rate for elderly, ( I assume they are at a certain age by the time Mr Sian passed away),

It is good to have an estate value of $900k.

Each person can get 20% of the estate which is $180k.

Divide by 10 years will be $1500 per month.

This will definitely make life easier for them.

 Inflation not explored in the above example.

Another Good Deed Done!

Insurance Planning: How much is sufficient for Critical Illness (CI)

This post is trigger by a Question on How much is sufficient for Critical Illness (CI)?




This post will not touch on what are the CIs covered and what products are available.

This post will focus on a scenario on a recovery patient from CI treatment and roughly how to calculate the "sufficient" amount of coverage.

Based on a true situation from someone I know,

Mr Sian went for a body check out and found out he have "a Critical Illness" and needs treatment for it.

The first 3 years are the critical mile stones for a cancer treatment and another 2 years for recovery and hopefully no recurrence for that period. 

Mr Sian Couldn't work due to the treatment side effects and that is where the CI policies come into the picture to claim for loss of income.

Treatment fees are already insured by integrated shield plan. (unless the treatment is not done in Singapore)

Mr Sian requires at least three years income protection and the period in getting a new job which is around another one year income protection.

So by rough estimate is 3yrs+1yr+1yr(additional) = 5yrs income protection, just in case the economic is gloom for job position.



The calculation is rather simple but what we have to take note is

1. Most CI coverage is accelerated benefit (AB) from the total death benefit.

That means the proceed will eat into your death benefits which you have planned to leave for your family.

Non-accelerated benefit (NB) are available as stand alone (more expensive) but whether a person needs an AB or NB will depends on each individual situation.

2. After you claim a CI proceed, there is a high chance you cannot get another CI protection unless you already have an additional CI protection that is not claimed.

3. There are now new products in the market that allows point 2 to be negated but I am not in position to suggest or recommend because I am not in the Insurance industry.

4. There might be other Cancer implication which hopefully does not happen.

Hope this post help readers gets an idea on a real CI situation rather then just the amount of money that is paid out.

We have to plan beyond the payout sometimes.

Another Good Deed Done!

Estate planning: Lasting Power of Attorney ( fee of $75 waived is EXTENDED to 31 Aug 2020)

This post is trigger by a Question on at what age should a "will" be written.

The "will" part have been covered in this blog but Lasting Power of Attorney (LPA) and Advance Medical Directive (AMD) which are useful is not.

** UPDATE: One thing to take note is a fee of $75 will be waived for LPA form 1 until (31/08/2018 which is this year) HAVE BEEN EXTENDED TO 31/08/2020 .**

Please refer to the link below for the updated news published on 28/06/2018.

Application fees for Lasting Power of Attorney waived for 2 more years till end-August 2020


Hope this write up can help readers save money before the waiver is over!

Before we touches more on LPA which have a Form 1 and a Form 2, is good to know what are the differences between LPA and AMD.

Quoted from https://law.com.sg/faq/advance-medical-directive-amd-similar-lasting-power-attorney-2/
A) In LPA Form 1, for Personal Welfare powers, there is a question on whether your Donee’s authority shall extend to giving or refusing consent to the carrying out or continuation of treatment, including the conduct of a clinical trial, by a person providing health care for me. These decisions are made by the appointed Donee.

B) An Advance Medical Directive (AMD) is a legal document you sign in advance to inform your doctor that you do not want the use of any life-sustaining treatment to be used to prolong your life in the event you become terminally ill and unconscious and where death is imminent.

The AMD can be made by any person, aged 21 years and above, and is not mentally disordered. The AMD form is a legal document which must be completed and signed in the presence of two witnesses before it is returned to the Registrar of AMDs. The patient’s doctor must be one of the two witnesses, while the other witness must be at least 21 years old. In addition, both witnesses must not have any vested interests in the patient’s death."




The LPA is a legal document that allows a person to appoint an individual to make key decisions for him/her, should he/her lose his/her mental capacity and become unable to do so.

Basically, the DONEE can access the bank account of the DONOR if is not a joint account or the joint account is not with the DONEE.

In that way, the DONOR "savings" can be used for the welfare of the DONOR without a scenario that

a) there is money from the DONOR but cannot be used because no one can access the money in the bank account
b) family members hope the DONOR pass away so the "Will" can take place and money can be accessed from the bank account. (Very sad if this happens!)
For the above, LPA Form 1 should suffice.

This is required when a person is
1. Single
2. Still Divorced
3. Does not have a joint account with a care taker.
For Singapore Citizen

The cost for LPA Form 1 is  
a) $75 for Office of the Public Guardian (OPG) ** (waived until  31 Aug 2018) 

b) LPA certificate issuer that can be (i) accredited medical practitioner, (ii) lawyer, and (iii) psychiatrist
The cheapest is accredited medical practitioner which fee range from $25 to $50.

There might be more cost depending on situation.

LPA Form 2 is for DONOR who wish to grant DONEE/S Customised Powers and this will require a Lawyer. For Singapore Citizen
The cost for LPA Form 2 for Office of the Public Guardian (OPG) is $200.
I won't touch much on the cost for LPA Form 2 because the Lawyer's Fee could varies depending on the customization.

For more information on fees not for Singapore Citizen, you can refer to the link below.
https://www.publicguardian.gov.sg/opg/Lists/Resources/Attachments/53/Search%20Fees%20Table.pdf

Forms Download:
Advance Medical Directive (AMD)
LPA 

Another Good Deed Done!

Estate planning: Making it easier for our parent to receive the insurance payout

This post is trigger by wanting to make sure parents have a peace of mind if a person have to leave the world for a better place and will be focusing on Insurance Nomination.

This will also be more hassle free for the trustee if he/she is the spouse.
Not everyone (the trustee) is in a condition to execute a Will when he/she have to accept a love one is gone.




The plan is to allow the parents to receive the benefit/proceeds without a trustee.

It could be done with

a) the deceased death certificate
b) the parents/nominee's ID card at the Insurance company counter
(If an agent is not available, just in case, good to be prepare.)



Before we continue, we need to know for insurance nomination there are
1) Trust Nomination
2) Revocable Nomination

I like to keep things Simple so readers benefit from it so I won't go into a lot of details rather more on the pros and cons.

1. Trust Nomination

Pros
a) Only Spouse and/or children can be nominated (Sadly, parents are not allowed)
b) Will have no impact on this Nomination (pros in this case, straight forward to get the proceed)
c)  The BEST reason is policy proceed is protected against claims from creditors in the event of bankruptcy!

Cons 
a) Basically, the insured (You) who pay for the policy does not retain control over the policy anymore.

b) Very tough to change nomination unless all the nominees consent to it.
(That is if you change your mind to give it to a family member who needs the proceed more)

c) Nominees get living benefits
(Living benefits are claims like injury claims the insured sustained and by right should get the proceeds instead of another party)

d) Requires a Trustee



2. Revocable Nomination

Pros
a) The insured (You) retain the control over the policy.
b) The insured (You) gets the living benefits.
c) Nominess only get the death benefits
d) The insured (You) can change the nominees at anytime the proper way.
e) The insured (You) can nominate your Parents and hopefully not some mistress.
f) Will have no impact on this Nomination ONLY when this nomination is done after the Will and have informed the insurance company.
g) The BEST reason is trustee is not required and become hassle free for parents to get the proceed.

Cons 
a) The worst decision is to nominate to your mistress
b) The worst cons is the proceed is NOT protected against claims from creditors in the event of bankruptcy!



Please note I am not in the Insurance Industry and I did not touch on the shares allocation or what happened if the nominees or trustee passed on before the insured.

My advice is to get your facts right with the right officials before you proceed in submitting your nomination forms.

Another Good Deed Done!