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The probate process can be a lengthy and costly procedure, but it is necessary to start the administration of your will upon your death.
Nevertheless, you may be wondering if there are other ways to bequeath an inheritance to your loved ones. How do you avoid probate?
What is probate?
A probate is a legal process through which the executor or the deceased’s relatives prove in court that the will is valid. Only after the court’s approval can the executor make actions regarding the deceased’s estate.
In most cases, the task of applying for a grant of probate falls under the responsibility of the executor, but you can also opt to hire a probate lawyer, especially for complex cases.
If you were not able to name an executor in your will, the probate law in Singapore requires Letters of Administration from someone fittest to administer your estate. Like the Grant of Probate, this legal document is also obtained from the courts.
Why should you avoid probate?
The probate law is intended to protect the deceased’s wishes when the will was created, as well as the welfare of the rightful beneficiaries to the estate.
However, given that probate is time-consuming and expensive, it is best to plan your estate properly to find the best alternative in providing an inheritance for your loved ones. You would not want your assets to be significantly reduced because of probate fees, nor would you want your loved ones to wait a long time before they receive their share of your estate.
How do you avoid probate?
There are several ways for you to avoid probate depending on your situation, or through other instruments. In most cases, it is best to consult with a probate lawyer to see which of these options will work best for you.
1. Per the probate law, when the value of your estate is not more than SGD50,000
Instead of applying for a Grant of Probate, your executor or loved ones can apply to become a Public Trustee. The probate law in Singapore allows this option if your estate is not more than SGD50,000 and there are no outstanding debts and liabilities upon your death. There should also be no Letters of Administration filed on the estate.
2. Create a living trust
A trust is a relationship wherein a trustor’s assets are held and managed by another party (also known as a trustee). A living trust is a type of trust that takes effect within the trustor’s lifetime.
Generally, the objective of this agreement is to provide benefits for the trustor while he is still alive and pass on the assets to their beneficiaries upon their death. Similar to a will, a living trust allows you to name beneficiaries for your properties, but unlike a will, this option bypasses probate procedures and taxes.
3. Establish joint ownership
Most joint accounts provide a survivorship clause wherein the surviving co-owner automatically inherits the asset upon the account holder’s death. The same is true with joint owning a property. In case you are already certain of your beneficiaries, this is one way of ensuring that they will not be inconvenienced by the probate law.
4. Name your beneficiaries on retirement and insurance policies
In Singapore, a CPF nomination allows members to specify who will receive their CPF savings, and how much each nominee should receive, upon their death. Likewise, insurance policies allow you to name any person as your beneficiary through a revocable nomination. Your nominee may be changed at any time before your passing with this type of policy.
5. Provide gifts before your death
By providing your assets as gifts while you are still alive, you are removing these from your estate and from your probate assets list. Thereby these assets will no longer subject to the probate law upon your death.
Note that gifts that exceed a certain amount, may be subject to gift taxes, depending on state laws. In Singapore, there are no gift taxes, but cash and non-cash gifts from employers are taxable when they exceed SGD200. In addition, most immovable properties and shares are subject to stamp duty charges when they are given as gifts.
Avoiding probate may be beneficial in some cases, while in others, it is still best to have the will reviewed by the courts. If you are more or less decided on your beneficiaries, you should look into how do you avoid probate. With the options above, you can prevent subjecting your assets to the probate law.
You may also want to talk to a probate lawyer in Singapore for more information regarding probate and estate administration.
Here at Kith & Kin Law Corporation, we offer expert advice on Grant of Probate Singapore to assist you on the best approach for your unique circumstances and needs.
If you would like further assistance in probate application or estate administration, schedule a discussion with us today.
