“Dear, you must tell me what financial steps to take if you pass away,” Heartland Girl asked Heartland Boy a few months prior to their marriage.
That question got Heartland Kid off guard he had no responses then, at that point. However, he came to the realization that the partner’s death is not a trivial matter that can be easily ignored. Just to be clear, Heartland Girl never says anything frivolous anyway.)
This worry is primarily rooted in the fact that Heartland Boy has always taken charge of the family’s financial planning. During a time of great loss, it would be difficult and almost impossible for Heartland Girl to suddenly assume this role. Even though this is a difficult time, significant financial decisions must still be made. Some may even consider this to be a morbid subject that ought not to be discussed. Heartland Boy, on the other hand, came to the realization that he could simplify the process by creating a financial plan or action plan that outlines the financial steps Heartland Girl can take in the event of her spouse’s death.
First Financial Step: How much was left behind by the deceased?
The first thing on the financial checklist is to figure out how much money was left over for the spouse who is still living. Working with a reputable financial planner will be preferable because this can be a complicated process. Regardless, before recommending any financial products, a competent financial planner would have done this with you in the first place.
Together with his financial planner, Heartland Boy has established the following resources that will make up his estate upon his death. Attention international readers: Singapore’s CPF and SRS are unique to the country.
Second Financial Step: Check to see if the deceased made a will. Heartland Boy is a proponent of making a will. This view is also expressed in this Sunday Times article. It is helpful to give the household some financial order.
Heartland Girl probably shouldn’t waste time looking in the closet because Heartland Boy admits that he has not yet made a will. Also, if a will has ever been written, it might be a good idea to tell the surviving spouse so that they don’t get a bad surprise. The Intestate Succession Act will be used to distribute Heartland Boy’s estate in the absence of a will.
His parents and wife will each receive half of his estate, as a good general rule. However, there may occasionally be exceptions, as shown in the table below.
Property (BTO) Under a Joint Tenancy Scheme, Heartland Girl will receive Heartland Boy’s share of the property. FINANCIAL STEP 3: PRINCIPALLY MANAGING THE INHERITANCE Having comprehended how his estate will be divided among the members of his family, the following step on the financial checklist would be to prudently manage the inheritance. Because lottery winners frequently squander their sudden wealth in a hasty and careless manner, this may be the most significant factor.
Heartland Boy would advise doing the following:
Heartland Boy is aware that this will be a contentious decision that probably won’t go over well with his parents’ retirement accounts. However, given their previous track record with money management, there is a possibility that they will misuse this inheritance. As a result, it would be prudent for his parents to top up their retirement accounts so that they can reach the Full Retirement Sum. His parents have very little money in their retirement accounts.
During their retirement, the beneficiaries can rely on the CPF Life payouts. In addition, Heartland Boy is convinced that this is the best and safest product on the market to fulfill this requirement.
LIQUIDATE HEARTLAND BOY’S EQUITY PORTFOLIO AND INVEST IN THE STI ETF Heartland Boy’s SRS retirement fund will be considered withdrawn upon his death. In this case, the early withdrawal penalty of 5% does not apply. She should also sell Heartland Boy’s equity portfolio because Heartland Girl doesn’t like picking stocks. She ought to put these funds to use in order to make the most of her SRS account’s annual top-up limit of $15,300. Additionally, Heartland Girl ought to make biannual investments in the STI ETF given that the SRS account only offers a very low interest rate.
PAY FOR THE BTO If Heartland Girl is granted permission to keep their BTO, she should make use of her inheritance to pay for it.
Since Heartland Boy is aware that Heartland Girl despises debt, he should be able to help her sleep better at night. It should be noted that the Heartland Couple has not yet taken out HDB mortgage insurance because they have not yet begun making payments on their HDB mortgage.
Heartland Girl should put 70% of her inheritance into her CPF if the HDB refuses to let her keep the BTO. She ought to consider this to be a purchase of a bond of Triple AAA grade with a coupon payment that ranks among the highest in the world. She will succeed by utilizing various plans like the Retirement Sum Topping-Up Scheme and the Voluntary Contribution Scheme. Dear, use the remaining 30% to pursue your goals.
FINALLY, ALL PROCEEDS FROM THE FUNERAL SHOULD BE DONATED IN EQUAL AMOUNTS TO THE HEARTLAND BOY’S ALMA MATER. Although it may not be much, Heartland Boy cannot think of a better way than to provide better education for future generations.
Conclusion of Financial Steps in the Event of a Spouse’s Death This is the post that took Heartland Boy the longest to write, which is understandable given how emotional and morbid the subject of a partner’s death is. At least he was glad he had a professional to help him create this checklist for financial planning in the event of a spouse’s death. He feels better knowing that Heartland Girl won’t lose too much money in the event of an emergency.