Deciding who gets what in estate planning

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01 Nov 2018 | 2 min. read

Who do you want to inherit your estate? Think about your beneficiaries. Learn how you can distribute your estate to them, and what you should do before you decide on distribution.

Key takeaways

  • Take care of your loved ones – decide ahead of time who gets what.
  • Consider what your beneficiaries need after you pass away.

Who are your beneficiaries?

Make a list of people you would like to distribute your assets to after your death. These individuals are the beneficiaries of your estate.

Beneficiaries could be your family members, or your favourite cause or charity.

What do you give them?

Next, you'll need to decide what and how much of your estate to allocate to each person on your list. Here are two ways to distribute:

  • Distributing by proportion of estate – You can decide to give each beneficiary a percentage of your estate. For example, your spouse and children each get an equal share of your estate.
  • Distributing specific assets – You can choose to distribute your estate by allocating specific assets to individual beneficiaries. For example, you may want your spouse to have the money in your savings account and your children to have your unit trusts.

Checklist

Key factors to consider

The following are some things you should consider when planning your estate distribution.

Who or what matters to you? Are there people who are financially dependent on you? They may be your children, aged parents, grandparents, or someone close to you. Or even a cause you care about.

What do your beneficiaries need? Consider what and how much your beneficiaries will need. For example, if you have young children, you may need to allocate more of your estate for their well-being. You may also need to consider who to care for them.

Do you have any debts? Your debts need to be repaid. If there are not enough funds, assets will be sold to repay the debts.

Do you have an overseas portfolio? If you have overseas assets, check how foreign laws and laws of your domicile (the country that you treat as your permanent home) will affect whether your loved ones can take over your assets, and the taxes they may need to pay. Ask about the inheritance laws and taxes of the respective countries. Factoring in the different tax and legal implications helps you avoid burdening your loved ones financially.

How will your funds reach your beneficiaries? Think about how you want to transfer your funds. A Will is the most common way. Learn about other means of transferring your assets.

Make your list

Think about your beneficiaries — loved ones or a worthy cause. Then make a list of everything you own, and put a name next to each asset on the list. Keep this list handy when you work out your Will.

Last updated on 07 Nov 2018