Death is a topic that we often avoided.
However, have you ever wondered what happens to your financial assets when you pass on?
If you have made a will, it will be executed accordingly, but what if you don’t? Well, you will be considered an Intestate and your estate will be distributed according to the Intestate Succession Act.
What is the Intestate Succession Act?
Intestate is used to refer to a person who passed on without making a will. The Intestate Succession Act is used to determine how the deceased’s estate will be distributed.
Note: These rules do not apply to Muslims as their estate’s distribution will be governed by the Muslim laws and Syariah Court.
The chart below indicates how your estate will be distributed based on the Intestate Succession Act.
What is considered as part of your Estate?
Your estate consists of assets under your name. Firstly, your estate will be used to clear any outstanding debt and liabilities. These include car loans or mortgages loans. The remainder of your estate will then be distributed by your administrator.
Who will handle the process?
Any of your next-of-kins can apply for a Grant of Letters of Administration to kickstart the process. It provides them the authority to act as the administrator of your estate – which in turn allows them to distribute your estate. There can be up to 4 administrators working together concurrently.
For individuals with less than $50,000 and no liabilities, the Public Trustee Office can serve as the administrator in distributing your estate.
Then why estate planning?
While there are procedures in place for intestate succession, there might be areas of ambiguity that can result in disputes. The extraction process for the beneficiaries is also further complicated by verification procedures.
It is also important to note that the costs of extracting the letter of administration (Required for cases without a Will) is higher than extracting a grant of probate (Required for cases with a Will).
Early estate planning is definitely recommended so that your wishes will be adhered to smoothly.
Schedule an appointment to start your planning here.
Receive $10 credits when you plan your estate with PolicyPal.