The most common usage of testamentary trust are: Example 1: To hold the residential property of the testator so that dependents can stay in the house until they are financial independent or dies. This is to prevent the property from being sold prematurely. The property can be sold and proceed given to stated beneficiaries when the trust ends. Example 2: Instead of giving a lump sum to … [Read more...]
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What are Living Trust, Testamentary Trust and Implicit Trust?
A Living Trust is a trust setup when the settlor (the person who setup the trust) is still alive. A testamentary trust is a trust setup by a Will and after the testator dies. Note that a testamentary trust is only setup after the Grant of Probate and when all debts are paid by the Executor. If the estate is insolvent after all debts are paid, the testamentary trust is as good as an empty shell. … [Read more...]
Is estate planning expensive?
Put it this way, if you don’t do estate planning the price of not doing it can be the cost of your entire estate. See the post on Man lost almost his entire HDB property to siblings due to poor financial planning. … [Read more...]
Is a guardian required in a Will?
It is optional. But it is good to have a guardian appointed in the Will if your children become orphans. The default guardian is the child’s biological parent (if still alive). … [Read more...]
I am undecided in the disposition of property with regard to the estate planning
If you want to do estate planning, you can distribute your assets based on needs-based analysis: You should have already done a survivor-needs analysis which identify the amount each dependents should have. This analysis is done as part of the Protection Planning. Thus, each of these dependents must have at minimum this amount of money. Since dependents must have a roof over their head, you … [Read more...]
If I write a Will, I don’t know who to appoint as Executor
Answer: If you don’t have a Will, someone will become the Administrator who also have huge powers. Potentially the Administrator can be your creditor or an enemy. Instead of leaving to chance, why don’t you appoint an Executor in your Will who is neither your creditor nor your enemy? If you cannot find anyone, you can always appoint a professional corporate trustee to be the Executor. … [Read more...]
Should I wait until I am old to do estate planning?
Implied in the question is that you will not die now and hence not necessary to do estate planning. If you are 100% sure you will not die at young age, it means that insurance premiums at such young age should be $0. However, if you check around the market – all insurance companies charges a non- zero premium for insuring the young. Why? It is because there is always a finite probability of … [Read more...]
Is estate planning only for the rich?
No. The poor also need estate planning. Regardless whether you are poor or rich, you have responsibilities which you cannot avoid even if you are dead. For example, who is going to take care of your children and your parents? Also, an immediate estate can be created easily using insurance. If you think you are “poor”, that means you are either underinsured or bought junk insurance. … [Read more...]
If I have more liabilities than assets, can I do estate planning?
Answer: Yes and no. Estate planning is the final stage of comprehensive financial planning. Protection planning on the other hands is meant to ensure your estate is solvent. If you are insolvent, all your estate goes to your creditors unless prior protection planning was done. … [Read more...]
Why I need to have a Will when I have no beneficiary to give when I die?
Answer: You are selfish, self-centered and only think about yourself. There are many people in the world who are destitute. You can always give it to them as beneficiary of your estate. … [Read more...]
