A GUIDE TO MAKING A WILL

A Guide to At Goodwins we focus on the things that matter to our clients, which is
reflected in our culture of client care and quality control.

Making a Will We have proven strength in our areas of practice and have leading lawyers
in certain fields. We are able to consider matters from an international
viewpoint. We have practising solicitors from Australia and England leading
important areas of practice.

We work closely with lawyers in other countries, and with professionals

such as accountants, tax consultants and financial advisers, to make sure
you get in-depth expert advice. Our clients enjoy more than just a law
service.

Private Client Services and Estate and Financial Planning are led by Stanley
Jeremiah, who is both a lawyer and a chartered insurer with considerable
experience working in and with the Financial Services Industry in Singapore
and abroad.

This document has been awarded the Crystal Mark, which is

the internationally recognised symbol of clarity. It shows that
it is in plain English. As well as passing 35 technical tests, the
document must pass independent testing on the public.

‘Plain English’ is language that the intended audience can read,

understand and act upon the first time they read it. Plain English
takes into account design and layout as well as language.

Goodwins Law Corporation

Tel: +65 6464 9449 Fax: +65 6323 4230 Email: [email protected] Web: www.goodwinslaw.com
 CONTENTS HOW WE CAN HELP YOU PLAN FOR THE FUTURE

This booklet refers to the law of Singapore. It does not apply to Muslims
whose estates are governed by Muslim law. From time to time the law
changes and details in this booklet (including the information relating to
tax) may become out of date. There’s no substitute for professional advice
which is up to date and tailored to your own needs.

γ Definitions γ What about tax? WHY SHOULD I MAKE A WILL? PREPARING TO MAKE YOUR WILL
There are many reasons for making Your assets
γ What is a will? γ Tax planning in the will
a will. The two main reasons are that: γ Make a list of everything you own,
a) Wills take effect only on death γ you can control who gets your
γ The main problem – estate duty including jointly owned property
b) What can wills do? property after your death; and and bank accounts. Include things
γ When is the tax due?
γ Why should I make a will? γ your assets can be managed like money in banks as well as
γ Funding estate duty properly and put to their best use your house, your car and so on.
γ How to make a will? by the person (or people) you γ Work out the value of each thing
Do I need advice? γ Reducing the tax bill
choose to manage your estate. on your list as accurately as
γ Why should I go to a lawyer? γ Completing the will possible.
If you don’t make a will, your estate
γ What will it cost? γ Changing the will will be shared out under fixed rules DECIDING WHO WILL BENEFIT
γ Your Will γ Why do wills need reviewing? of law. It may not benefit the people When you have prepared your list
a) You as an individual you want it to. of assets, you must decide who will
γ The will in a wider context benefit from your estate. You must
b) Your estate Lifetime tax planning WHO CAN MAKE A WILL? decide who will get:
c) Executors and trustees
d) Your beneficiaries γ Nominations Anyone over 21 can make a will.
γ specific items such as your house,
e) Guardians for children WHEN SHOULD I MAKE A WILL? The a watch or a particular item of
f) Your body answer is simple – you should make jewellery;
g) Other provisions a will now. Don’t put it off. However, γ gifts of money, and how much
make sure you read and consider they will get; and
the following information carefully, γ the residue (remainder) of your
and get all the relevant information estate or how it will be divided.
about your assets before you start.

2 © Stanley Jeremiah 2002-2003 all rights reserved 3

 DEFINITIONS Guardian
If you have children under 21, you should name the person you would
Beneficiary want to look after them if you and your husband or wife, or partner,
A beneficiary is a person or organisation (for example, a charity) who died. You can appoint more than one person to act as the guardian of
benefits from your will. A beneficiary may also act as an executor of your children.
your will.
Money and property you leave in your will for children under 21 will
Executor be held in trust until they are 21. We will include an appropriate trust
An executor is responsible for dealing with the affairs of a person after his in your will.
or her death and makes sure that their wishes in their will are carried out.
There can be a great deal of work involved, with many tasks taking a long If the guardian you choose is not an executor, the guardian would not
time to complete and often needing legal or taxation knowledge. The have automatic access to money you may leave for your children. Instead,
period of administration can last for several years. they would get funds to raise your children from the executor.

You can appoint your husband or wife, a relative or a friend to act as your Estate
executor. However, if you do not want those closest to you to have to Estate is simply a legal word that means everything you own and all your
deal with paperwork and possible court appearances at a time of sadness, money added together.
you should appoint a professional executor such as us, Goodwins. As your
executor, we would be committed to managing your estate efficiently so When someone dies leaving a will, the executor has to collect all their
your beneficiaries suffer as little inconvenience as possible. assets. The total assets added together are known as the ‘estate’. The
executor then pays any debts of the person who died, pays the funeral
A professional executor will protect your assets against fraud and expenses and gives out any specific gifts (see below) given in the will.
negligence, and will deal with your affairs in the strictest confidence, What is left after all the debts have been paid and all the specific gifts have
which is especially important when dealing with possible conflicts. Our been given out is known as the ‘residue’ of the estate.
executor fees are extremely competitive and are only payable from your
estate after your death. Specific Gift
You can give individual gifts of money, property or personal belongings
While we recommend that you appoint a professional executor, we also to any beneficiary separate from the main gift of your estate (the gift would
suggest that you appoint a friend or relative to act jointly with the professional. be taken out of your estate). You should not include many specific gifts
The joint executor will be consulted on the more personal matters but in a will as it will make your estate difficult to deal with.
does not have to be involved with official duties such as dealing with
courts, creditors, the Inland Revenue and so on.

4 © Stanley Jeremiah 2002-2003 all rights reserved 5

 WHAT IS A WILL? γ Making funeral arrangements
A will sets out in writing what will happen to a person’s estate when he You can use your will to show how you would like your funeral to be
or she dies. While this one-line summary is accurate, there is much more arranged. Normally, this is limited to saying whether you want to be
to it than that. cremated or buried.

(a) Wills take effect only on death A will can be a very flexible and useful document. However, in order to
The first important point to note is that wills have no effect whatsoever get the most out of it, it is important that you know what you want when
during the person’s lifetime. The significance of this is that a will can be you are considering making a will.
withdrawn or changed at any time up to the time of death. It also means
that the person is not giving any gifts during their lifetime.
WHY SHOULD I MAKE A WILL?
It is important to realise that, with one minor exception, making a will does If you don’t make a will, the following things may happen.
not restrict what you can do with your property during your life, nor does
it mean that you will alter your tax position before the date of your death. γ Everything you leave (your estate) will go to your next of kin (family
or relatives) according to fixed rules (known as Intestacy Rules). Your
A will passes property to someone who will look after it and then distribute husband or wife and children qualify as next of kin, and so do close
it to the beneficiaries in line with your instructions. The person who takes blood relatives if you are not married. If you leave a husband or wife,
on this role is called an executor (or, if female, an executrix). The role of your whole estate may not go to him or her. In some circumstances,
the executor is generally a temporary one, and is limited to distributing the your parents may get nothing.
assets of the person who has died and paying their debts and any tax bills.
γ Statistically, the likelihood of a husband and wife dying at the same time
It is also possible to create a trust in your will. However, any trust that is or within a brief period are very small. The rules that apply to situations
set up by a will only takes effect when the person dies and until then can where a husband and wife die at the same time are complicated,
be withdrawn or altered, just like any other part of the will. especially if it is not clear which of the couple died first, for example,
in an air crash. The rule in these cases is that the younger person is
You can withdraw your will by deliberately burning it or tearing it up, and treated as the last to die with the Intestacy Rules applying to the assets
by law it will also be withdrawn if you get married after you have written of the elder. These assets then pass to the younger person’s estate with
your will. You can add to or delete part of a will using a supplementary the Intestacy Rules applying again if they have not left a will.
will called a ‘codicil’. The important thing to remember is that a will is not
necessarily your final decision and you should review your will regularly. γ One effect of this is that the rules which apply to the estate can
significantly limit the entitlement of the parents or other relatives of the
(b) What can wills do? person who dies first (or is treated as having died first). In this case,
As well as being able to show who receives your property after your death, most of the property could pass to the other set of parents or relatives.
wills also have other uses. Not all of these will apply to everyone, but the A will can avoid this problem.
following are some of the more common uses of wills.
γ There is also the question of who will look after any children until they
γ Appointing guardians of children are old enough to look after themselves. If there is no will, the courts
You can appoint someone to look after your children until they are old have the power to appoint a guardian who may not be the person you
enough to look after themselves. want or trust to bring up your children.
6 © Stanley Jeremiah 2002-2003 all rights reserved 7
 γ Another problem which can arise as a result of the Intestacy Rules is If You Are Not Married (that is, single, widowed or divorced)
the possibility of a lot of money passing to the children at an early age.
Not many 21-year-olds have the maturity to deal with a lot of money Do you have children?
and this, together with the loss of their parents’ stabilising influence, is Shared equally between
obviously a cause for concern. No Yes them or their children or
grandchildren
γ Your personal representatives (who take charge of your estate and wind Do you have parents?
it up) will also be chosen according to fixed rules. They may not be the Parents take the whole
people most suitable to act. No Yes
estate (equally).
γ The only powers which the personal representatives will have will be Do you have brothers
those given by Acts of Parliament that were passed years ago. These or sisters?
may no longer be suitable and needless expense may arise. Shared equally between
No Yes
them or their children
But if you make a will, you can: Do you have grandparents?
γ decide exactly what you want done with your own property after your death;
γ appoint personal representatives of your own choice and give them all the Shared equally
No Yes
powers they need; between them
γ save your beneficiaries from paying unnecessary tax; Do you have uncles or aunts?
γ appoint guardians for young children; and Shared equally
γ say whether you want to be cremated or buried. No Yes
between them
Everything goes to the
WHAT HAPPENS IF I DIE WITHOUT MAKING A WILL? Government.

If You Are Married [when you die] A child includes an adopted child but does not include an illegitimate child
or stepchild.

Do you have children?

Half to your husband or wife and
No Yes half shared equally between your
children or their children or
Do you have parents?
Half to your husband or wife and
No Yes
half to your parents (equally)
Your husband or wife takes the
whole estate.

8 © Stanley Jeremiah 2002-2003 all rights reserved 9

 HOW TO MAKE A WILL γ help you to clarify your own ideas – your will needs to cater for a number
A will can be a simple document but you must think very carefully about of different eventualities and you may not have thought of all of them;
what you want to go into it.
γ use legal expertise in preparing the will – it will involve knowledge of
Do I need advice? the law of wills, of the law of property, trusts and tax, and perhaps of
Yes, you do need advice. There is no law preventing you from drafting other subjects too; and
your own will but you will not be there if anything goes wrong. There
are some good reasons why you should get advice from someone who γ make sure that the will cannot be challenged after your death.
can give you clear guidance on the contents.
Your will is probably the most important document you will ever sign and
You may think that there is not very much that can go wrong, but here are you have to get it right. The future wellbeing of your family may depend
just a few of the mistakes that could be costly. on it because a bad will can create lasting grievances and unhappiness.
γ If your will is not correctly witnessed, it may be completely invalid so
that none of your wishes can be carried out.
WHAT WILL IT COST?
γ Even fairly simple words can lead to complicated legal disagreements. Our charges are likely to be small when weighed against the peace of mind
For example, in law the expression ‘personal property’ does not include you gain (and the tax savings which you may make). We will give you an
land or buildings such as your home. So when you say ‘I give all my idea of how much it is likely to cost after you have given us the information
personal property’, you may think you have given everything you own we ask for in our client information form.
but you would not have done so in law, if the property you own includes
a flat or a house. At Goodwins, we believe that your will should be tailored to your own
needs. There’s really no such thing as a ‘standard will’ because everyone
γ If you choose words that are not clear, there could be disputes later. has a unique set of financial and family circumstances, lifestyle and
preferences. We can’t tell exactly what the cost will be until we know what
γ Even if you are divorced, you might still be responsible for your children we need.
from the previous marriage and this can affect what must go into your will.

γ You may want to give your BMW to your son, but if you replace it with YOUR WILL
a Lexus at a later date, the gift will lapse (fail) so that your son will not It will save time if, before you see us, you think about the points mentioned
receive your car. below and on the next page, and prepare a note to bring with you so that
we do not overlook anything. Also, fill in the client information form as
fully and as accurately as possible.
WHY SHOULD I GO TO A LAWYER?
You can draw up your own will, or have it done by anyone you choose, (a) You as an individual
but it is best to go to a lawyer. This isn’t just because of the need to use We will need to know a number of things about you. Some are obvious,
language with a clear legal meaning, important though that is. It’s also such as whether you are married, are expecting to be married or were
because a good lawyer will: previously married, and whether you have young children, older ones and

10 © Stanley Jeremiah 2002-2003 all rights reserved 11

 perhaps grandchildren. Others may be less obvious. You should tell us if do but this would not add much to the overall cost if you need professional
you have property abroad or if you or your family have interests under help anyway. You may prefer to appoint a professional firm like a law
any existing trusts, along with any other facts that could be relevant. corporation because they avoid the problem of having to deal with the
death or retirement of particular individuals.
(b) Your estate
It is helpful to make a list of the things you own and how much they are If a will creates a trust, it should appoint trustees as well as executors, but
worth. The list might include a house or flat, any other land or buildings, usually the same people are given both jobs.
investments (including money in shares, unit trusts and bank accounts),
furniture and jewellery. It should mention any life or endowment insurance Executors can have a lot of work to do (and even more if they are trustees
policies and any existing arrangements about what will happen to them as well). Non-professional ones are not paid for this work, but they can
when you die, for example, if you have nominated a beneficiary under claim their expenses. You might consider leaving them something in your
Section 73 of the Conveyancing and Law of Property Act. will. You should also make sure that they are willing to act for you before
you appoint them.
If you own a house or flat which is mortgaged, the list should say so and
it should mention any other large debts and any hire-purchase or credit- (d) Your beneficiaries
sales agreements. The most important thing of all is how you want to divide your estate. The
people or institutions that receive it are called beneficiaries. You can make
You should tell us if you are a co-owner (with your husband or wife or two types of gift in your will.
someone else) of your house or flat, or of any other property. If possible,
also give the type of co-ownership (joint or in common) because different First, gifts of money, items (like jewellery) or other specific property to
rules apply. If you are a joint owner, your share will automatically go to friends, relatives, charities or others. You can leave property (all your
the other joint owner or owners when you die. You cannot leave it to personal belongings, for example) to a beneficiary or to your executors,
anyone else in your will unless you make special arrangements. and ask them to share it out according to any informal wishes you may
leave. If a specific gift of property is mortgaged when you die, the beneficiary
(c) Executors and trustees will have to repay the debt unless the will says otherwise and there is
Making a will allows you to choose your own personal representatives enough money in your estate to pay off the mortgage.
who, if appointed by a will, are called executors. They will take charge
of your estate, wind it up and distribute it according to your wishes. Second, gifts of residue. The residue is the property that is left over when
all debts and taxes have been paid and all the specific gifts have been
If the will is very simple, one person could be appointed to act alone, but given out. A will should always contain a gift of residue because you can’t
it is usually better to appoint at least two people, especially if there is a house know in advance exactly what your estate will include. This gift will also
or flat involved. You can appoint another person to cover the risk of an include any specific gifts that fail (for example, because the beneficiary
executor dying before you or not being able to act when the time comes. dies before you). If you have a husband or wife or children, or both, you
will probably want the residue to go mainly to them.
You can appoint your husband or wife, friends or relatives (grown-up
children, for example) who are reasonably businesslike. You can also (Please remember that certain people, including your husband or wife and your
appoint professional people such as lawyers or accountants. They would children, may be able to claim on your estate if they think the will does
not charge you for appointing them. They would charge for the work they not provide enough for them. We can tell you more about this.)

12 © Stanley Jeremiah 2002-2003 all rights reserved 13

 None of these gifts needs to be a single gift. You can have substitutionary (g) Other conditions
gifts (for example, ‘$500 to my friend Tom or, if he dies before me, to his We will prepare a draft of the will for your approval before preparing a
wife Mary’) or joint gifts (for example, ‘$500 to my friends Tom and Mary final version for you to sign. If you find that it contains legal conditions,
in equal shares or, if one of them dies before me, $500 to the survivor’). don’t assume that we are just putting in a lot of unnecessary jargon. These
You can also have trust gifts where your trustees will hold the property to conditions are actually very important. Most of them give your executors
carry out your intentions. There are several different kinds of trust. the powers they need to have, especially if they may also be acting as
trustees. We will be happy to explain any of the conditions to you.
There are trusts for young children under which the trustees have the
power either to use the income for their benefit or to let it build up. The Most people would like wills to be short and easy to understand, and we
capital does not pass to them until they reach 21 (or perhaps 25), but the feel the same way. We try to use plain English whenever possible, but the
trustees can decide to use it for their benefit in the meantime. law and human life are complicated, and there’s a point beyond which the
only way to simplify a will is to turn it into a bad or unsuitable will.
And there are discretionary trusts, which give the trustees power to share
out income and capital among a group of beneficiaries.
WHAT ABOUT TAX?
We will want to know if any of your beneficiaries are disabled or financially Tax is an important consideration when drafting a will. The way in which a will
vulnerable, or have any other particular problems or needs, because special is drafted can have a significant effect on the amount of tax that must be paid.
trusts can be set up in these cases.

(e) Guardians for children TAX PLANNING IN THE WILL

If any of your children are under 21 when you die, you should think about One of the best reasons for making a will is that you can share out your
appointing a guardian or guardians. You should choose any guardian estate in a way that will reduce the amount of tax your beneficiaries have
carefully and make sure that he or she is willing to act. If both parents of to pay. One of the best reasons for coming to us is that we can tell you
the child are still alive they will usually agree about the person or people how to do it. There are two main taxes to consider – estate duty and income
to be appointed, and it is not normally possible for the appointment to tax.
take effect until after the surviving parent’s death.
These things matter even if you are not wealthy. If you are wealthy, or
(f) Your body even fairly well off, it may be very important.
You may want your body to be available for therapeutic use (that is, corneal
grafting and organ transplants). Your will can include these wishes, but it If you own a large house or have money put aside, perhaps in the form of
may not be read until some time after your death so you should tell close investments, you may fall into the estate duty net. Estate duty is not complicated
relatives. And, as an organ that is needed for an organ transplant must be but there are several ways in which the conditions of a will, though they may
removed quickly, you should also carry a donor card. seem sensible, may give your beneficiaries unnecessary liability.

You may have a preference for burial or cremation or for a particular kind It’s a similar situation with income tax. Small differences in the wording
of funeral, or wishes about where you want to be buried or where you of gifts, especially gifts to young children, can produce quite different
want your ashes to be scattered. You could mention these things in your results under this tax and it is too easy to burden your beneficiaries with
will but, again, you should tell your close relatives. liabilities which skilled advice would have avoided. You would never know
you got it wrong and neither would they.
14 © Stanley Jeremiah 2002-2003 all rights reserved 15
 THE MAIN PROBLEM – ESTATE DUTY γ gifts of your assets, during your lifetime, which if you make more than
γ You can avoid or reduce the tax by making large gifts during your five years before your death, will not be considered as part of your
lifetime. As long as you survive for more than five years after making estate for estate duty purposes;
the gift, there is the possibility of saving tax this way. γ gifts on death; and
γ providing funds to pay the tax bill.
γ Each husband or wife has an individual exemption from estate duty. There
can be advantages in splitting assets equally between the husband and wife
so that each owns enough to be able to use their exemption to the full.
COMPLETING THE WILL
Don’t hesitate to ask us about anything which seems wrong or to ask for an
explanation of anything which puzzles you in your will before you execute it.
γ There are other methods we can advise you on, such as transferring
insurance policies to the bank for repaying the outstanding mortgage
Execution involves the will being dated and then signed and witnessed
on your residential property when you die. This removes the insurance
according to strict rules. If these are not followed, it won’t be valid. If you
payment from your estate and possibly provides your family with a
execute the will at our office, we will guide you through the procedure.
house that is debt-free and exempt from estate duty.
When you have executed the will, you should keep it in a safe place, such
as at your bank. We will give you a copy. It is a good idea to use the notes
WHEN IS THE TAX DUE?
which you made beforehand as the basis for keeping an up-to-date record
It is the responsibility of the executors to make sure that any tax is paid.
of your personal affairs (including where your will and other documents
They must normally do this before they are entitled to receive the formal
are) our firm’s name and address, and details of your estate. We advise all
grant of probate which allows them to deal with any of the assets in the
our clients to have their will registered at the Wills Registry.
estate. The situation can arise where the executors have tax to pay but no assets
which they can sell to get the money to pay the bill.
CHANGING THE WILL
The last thing likely to be on your mind when you have signed what is
FUNDING ESTATE DUTY supposed to be your ‘last will and testament’ is the fact that it might need
If finding the money to pay the tax is likely to be a problem, one solution to be amended at some stage in the future. After all, if you have paid for
is a life assurance policy which you can take out as a Section 73 Conveyancing a will to be drafted, you would expect it to last. Unfortunately, a will does
and Law of Property Act (CLPA) trust policy. The proceeds of the policy not come with a lifetime guarantee so regular reviews are unavoidable.
will not form part of the estate and the beneficiaries will be able to use
the money from the policy to pay the tax bill. In this way, it is possible
to build up a fund (within limits) that estate duty does not apply to. WHY DO WILLS NEED REVIEWING?
Compared with the overall tax bill, the annual or monthly amount you There are many reasons why a will should be reviewed, but the most
have to pay can represent a very small percentage of the total estate. important occasions which should lead to a review are:
γ getting married or divorced; guardians;
γ the birth of children or grandchildren; γ getting rid of or gaining assets set
REDUCING THE TAX BILL γ the death of a beneficiary under out in the will;
There are several broad strategies that can be used, but a combination of the will; γ changes in the tax laws; and
two or more of them is usually likely to be more suitable. The three main γ changes to executors, trustees or γ changing your mind.
choices are:
16 © Stanley Jeremiah 2002-2003 all rights reserved 17
 You should review your will every few years (normally every five or six Estate duty is based on a very simple principle. When you die, everything that
years) just to make sure that there have been no changes in your own you own is valued and any gifts that you made during the five years before
circumstances or those of your beneficiaries, or in the law or tax system. your death will be added to this. If the total value (not including residential
property where the exemption is $9 million) is more than an exempt amount
Simple alterations to a will may be made by a codicil (a document executed in (currently $600,000), tax is payable at 5% on the first $12 million and 10% after
the same way, which makes minor changes to the will but leaves most of it as that, unless there is some exemption that applies, for example, all CPF
it was). If you need to make a lot of alterations, it is better to have a new will. contributions are exempt even if they are more than $600,000.

Never try to alter a will yourself by crossing bits out or putting bits in – changes Estate duty is not just a rich man’s problem because the limit is low. The
made in this way will almost certainly be invalid. Even if you want to cancel a will current exemption is only $600,000 for all your assets (not including
altogether, don’t try to do it yourself. You may not do it correctly, and even if you residential property). This includes commercial property, CPF funds, shares,
do, it will leave questions in people’s minds. unit trusts, bank accounts, insurance policies, jewellery and so on, even
the car you own. If you add them up, you may find that your estate (that
Remember that: is, everything you own and all your money) is more than the exempt
γ if you marry after making a will, it is automatically cancelled unless you amount and estate duty applies.
were intending to marry when you made it and the will says so; and
γ if you separate from your husband or wife or divorce after making a Please let us know if you need advice on estate or financial planning. We
will, your will will still be valid. have access to friendly financial planners and insurance advisors who may
be able to work with us to help you.

THE WILL IN A WIDER CONTEXT

To make a will is to plan for the future, but it is only one of several ways
NOMINATIONS
Here are a few points on nominations.
of doing this and your visit to us may give us an opportunity to discuss
your affairs in general. One thing in particular deserves a mention here. Central Provident Fund (“CPF”)
You can nominate beneficiaries to your CPF Funds using the nomination
Lifetime tax planning forms and procedure set out by the CPF Board. It is important to note that
The tax savings which can be made through a will are very important but this nomination does not include CPF Funds put into investments such as
are bound to be limited. If your estate is likely to be very large, you should shares, unit trust and insurance policies, through your CPF investment
consider the possibility of tax planning during your lifetime. We will be account, but it does include CPF Funds held in fixed deposits with banks.
happy to work with your financial planner or insurance adviser, or other
professional adviser, to help you use various devices (including a trust) to Insurance Policies
achieve effective tax planning. a) NTUC INCOME Policies
You can nominate beneficiaries to your policies issued by INCOME in line
Even if you can’t afford to make lifetime gifts to your family at the moment, with the conditions of the Co-operative Societies Act, using forms and
you could take out an insurance policy under Section 73 CLPA to cover procedures provided by INCOME. However, it is important to note that
some of the estate duty due on your death and this could be held in a trust unlike CPF nominations and wills, this nomination is not automatically
so that the policy money itself (up to $600,000 for each beneficiary) will cancelled when you get married. If you marry after you made your original
not be taxable. nomination and now have different family obligations, make sure you
nominate your beneficiaries again using the procedures set out by INCOME.
18 © Stanley Jeremiah 2002-2003 all rights reserved 19
 b) Section 73 Conveyancing and Law of Property Act [CLPA] Policies
A Section 73 CLPA policy is an insurance policy that insures a person’s life
for the benefit of his or her husband or wife or children. The effect is to
create a trust for the beneficiaries who have been nominated. The courts
have ruled that it is not necessary to refer to Section 73, as just by expressing
that the policy is for the benefit of a husband or wife or children you would
be setting up a trust under the section. A beneficiary named under Section
73 will have immediate rights under the policy.

The insured person (if he or she does not nominate other trustees) is also
a trustee so must act to preserve the interest of the beneficiaries and cannot
deal with the policy as if it is his or her own property. The insured person
will not be able to change or exclude the nominated beneficiary (even
though the conditions in the policy contract may allow). Not everyone who
nominates a husband or wife or child as a beneficiary on a policy on their
own life fully understands this.

However, Section 73 CLPA policies can be used effectively for tax planning.
A Section 73 policy which is for the benefit of the husband or wife or
children (including paying all lifetime benefits such as critical-illness
payments) will probably qualify for ‘non-aggregation’ under Section 23 of
the Estate Duty Act. That is, the payment under the policy will not be added
to the rest of your estate. Instead the gift to each beneficiary will be
assessed separately, so you can create an estate that is exempt from estate
duty of up to (currently) $600,000 for each beneficiary. We will be happy
to discuss this with you or you can consult your insurance advisor or
financial planner.

Other Nominations
There is currently no legislation for nominating beneficiaries for insurance
policies in Singapore. So, following general principles, the proceeds of
insurance policies would be treated in the same way as other assets of the
insured person (they would generally become part of the insured person’s
estate to be shared out according to Intestacy Rules if there is no will).
Nominations of friends or other relations (such as parents) not entitled
under the insured person’s estate would probably be open to challenge
by the insured person’s estate. So, we recommend that these gifts of policy
Goodwins Law Corporation Tel: +65 6464 9449 Advocates & Solicitors
proceeds are shared out in a will. 3 Anson Road #07-01 Fax: +65 6323 4230 Notaries Public
Springleaf Tower Email: [email protected] Commissioners for Oaths
Singapore 079909 Web: www.goodwinslaw.com
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