Simplified Guide to the Key Gist of Grant of Probate and Estate Planning

Posted on August 12, 2023September 27, 2023 by careyourpresent

Estate planning is one of the most important but underrated aspect of financial planning for a person, especially for family with dependents. If your loved one passed away, many will be sad, hence, proper planning should be done when one is alive so reduce the stress of your loved ones if one passed away.

Many of us think that death is very far away but who know. Personally, I am worried, especially I have two young kids, parents and a wife who know nuts about financial planning/estate planning. Yes, I mean she know NOTHING about it. Everything she leaves it to me, that’s why I am worried.

She did way better than me in terms of career and earn much more active income than me, but she really is financially literate. (Hope I don’t get to kneel durian tonight for sharing the truth). Hence, I am writing something about estate planning in my blog so that she can read it if it really happens (touch wood).

Photo by Glenn Carstens-Peters on Unsplash

What is Estate Planning?

Estate planning refers to the process of organizing your financial matters and personal affairs to ensure that your desires are upheld after you pass away or if you become unable to make decisions. The primary objective of estate planning is to facilitate the smooth transition of your assets to your chosen beneficiaries and to minimize potential legal and financial complications that might arise after your death.

Passing Away with and without will

Passing away with and without will in Singapore has an effect on your Estate Planning.

Without Will

If you pass away without leaving a Will, everything you own (your estate) will be distributed according to Singapore’s Intestate Succession Act.

https://mylegacy.life.gov.sg/when-death-happens/apply-for-letters-of-administration/

If the above is not what you want, better get your will done as soon as possible. Time doesn’t wait and you won’t know when your last day on Earth is. I have did mine, so better do yours soon if you have not yet done so.

Just use Joint Account, don’t need Will!

Many people believe that you only need Joint Account and don’t need Will.

This is totally not true and not correct!

Above is not what I want, hence I have already gotten my will and my wife will done.

In fact, given that I know that my wife doesn’t know anything about financial/estate planning, I have tried to write the instruction down and put as many of our assets in joint accounts as much as possible to bet on the survival clause for joint account (if one party in joint account passes away, the remaining party get the assets). However, there are some things cannot be put in Joint Accounts, example your Singapore Saving Bonds in CDP, this is under personal CDP account, then you will need WILL!

Will writing needs Lawyer and it is expensive!

This is definitely not true. Unless you have lots and lots of assets, with different complicated ways of distributing your assets, such as distribute XX cash to person A from bank A, asset B to person C etc, then it’s better to engage a lawyer. However, if you only need to have simple will, do consider the following:

MoneyOwl has very good FREE Will writing services that you could consider writing your will. You can read more about it here. Let me shamelessly promote my referral link (or key in 6SHU-93MC) if you wish to sign up Moneyowl account.

Grant of Letters of Administration VS Grant of Probate

Many should have heard of this term but don’t know what it really means.

To put it in a very simple layman term:

Grant of Probate: If the deceased left behind a valid will, the applicant who is the executor can apply for it.
Grant of Letters of Administration: If the deceased did not leave behind a valid will, the applicant who is the beneficiary can apply for it.

One very key important fact, Grant of Probate will take much lesser time and less hassle as compared to Grant of Letters of Administration!

Imagine you loved one just passed way, one of the key wishes which most have is for the surviving family members to continue live and live happily (wife please read this, this is my wish too), hence Will become very important – help to save your family TIME AND EFFORT!

Lasting Power of Attorney (LPA)

Besides Will, don’t forget about Lasting Power of Attorney (LPA).

The LPA is a legal document which allows a person who is at least 21 years of age (‘Donor’), to voluntarily appoint one or more persons (‘Donee(s)’) to make decisions and act on his/her behalf if he/she loses mental capacity one day. A Donee can be appointed to act in the two broad areas of personal welfare and property & affairs matters.

I have already completed my LPA and my wife LPA at the price of $30 nett each using the CDC vouchers in March 2023. Do remember to do it too! Now you can apply via the portal but need to go to a doctor to certify! Please do so while

OPG has extended the LPA Form 1 application fee waiver for Singapore Citizens to 31 March 2026, to encourage more Singaporeans to plan ahead and apply for an LPA.

My Legacy Portal

If death really come, for those who are loss, you can go to this government site for the Guides.

Thank you, Government – Grant of Probate E-Portal

I would like to share a new e-portal (Probate E-service) launched by the government in case you didn’t hear about it. Quite likely, most won’t know about it (since death is a taboo for many) as I only accidentally saw it on some forums. Let me share a bit about this E-Service.

First and most important point – Don’t need Lawyer. Many of the normal people on streets are worry to engage lawyers as they are scared that the fees will cost a lot. But if one need to execute a Will, you can’t escape from it in the past.

BUT NOW YOU CAN! Read below!

Another very important point to note:

The Probate eService is currently available for cases where the total estimated value of the deceased’s estate is not more than $2 million.

Sorry to those who are richer than $2 million. Please engage your own lawyer.

However, do note that if your funds/assets (such as mine) in Joint Accounts, it will be on survival ownership, not cover in Will, then for this portion of assets, even if exceed $2 million, it will not be under Will, hence don’t need to use this service. Of course, if one still has some assets under personal name, then you will still need this service.

Other Criterias include:

Conclusion

For those who don’t have Will, please go and do it as soon as possible to avoid potential hassle, money, efforts for your family

Unless you have lots and lots of assets, with different complicated ways of distributing your assets, such as distribute XX cash to person A from bank A, asset B to person C etc, then it’s better to engage a lawyer. However, if you need to have simple will, do consider the following:

For those who already have Will, don’t forget about

Lasting Power of Attorney (LPA) and learn about Grant of Probate. It only cost $30 nett for me using CDC vouchers!

OPG has extended the LPA Form 1 application fee waiver for Singapore Citizens to 31 March 2026, to encourage more Singaporeans to plan ahead and apply for an LPA.

For those who have Will, don’t forget to put some money in Joint Accounts

It will take time and money and hassle to get the Grant of Probate or Letter of Administration.

For joint account (assuming there is no dispute from other family members), if either owner passes away, the balance in the joint account will pass to the surviving owner. If you put majority of assets under joint name (and assuming you are not those rich, fighting family that will fight for assets of your loved death ones), this will help you.

For my case, I put majority of my assets under joint CDP with Wife. Then I use FSM Beneficiary account. My wife or Child (upon 18), just need death certificate and his/her own IC to get the assets. Of course there are many other numerous benefits which I have shared in this article previously (Cheapest and best way to trade Singapore Stocks with CDP).

I am using FSMOne.com to invest in funds & ETFs (including money market funds). FSM is good due to the low comms and the free transfer from FSM to CDP(typically takes less than a week to transfer). If you do not have an account, you can sign up here. Please use my FSMOne referral code: P0413007.

For my Wife

Please read this article and remember what / how I have told you how to access our assets. Should anything happen to me, please continue to enjoy your life and take good care of our children.

Good articles that you should read!

People are drawn to dividend investing.

Why? Firstly, dividends provide a regular stream of income, allowing investors to receive a portion of the company’s profits on a periodic basis. This can be particularly attractive for individuals seeking consistent cash flow or looking to supplement their existing income. Additionally, dividend investing is often viewed as a more stable and predictable investment strategy compared to relying solely on capital appreciation.

I always write and share articles, especially on dividends which many people love them. Do read them!

Alternatively, you can go the right side of my page, there is a search bar where you can simply search “dividend” to see all my articles related to dividends!

Of course, you can search for other things that would interest you such as “Careyourpresent”, “Reits”, “Side Hustles”, “Fixed Incomes”, “Savings” etc.

CAREYOURPRESENT

Money just buy you the chance of freedom.

When you are young and working, you exchange time for money. When you are old, you can have lots of money but you can’t buy time back, especially the things that you have missed while busying striking out in career. Of course, if you love your career, and consciously know that you are missing out the first time your child walk or talk, that’s ok, but if you are the other spectrum, please do something about it.

Your kids grew up and they no longer need you to accompany them. They no longer want to sit on your lap to share/do things with you…all these time you spent in your 9 to 6 or even longer cubicles…can the money that you have earned by you back these?

We always thought we have more time with our old parents, but we are wrong. Time with them is ticking away every day. One day it will suddenly be gone. There is no regret medicine, no reset in time. Gone is gone and cannot come back. No matter you are billionaires or millionaires, you cannot reset this.

We always thought that we have more time with our spouse every day, but we are wrong. One day they will be gone too. When you read this, please go tell your spouse that you love him/her and he or she is the best thing that you ever had in your life.

I have picked out some of the more life reflecting articles of the CAREYOURPRESENT series. Do read them:

You can read more about my articles on Careyourpresent via the Category “Careyourpresent” or simply click “Careyourpresent” via the main menu bar.

REMEMBER:

Love your life daily.

You have one less day with your spouse, parents, children and yourself.

Time is ticking away.

For each passing day,

Enjoy and Treasure your Life!

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Estate Planning with the Best way to save money on commissions when trading Singapore stocks with CDP

Posted on July 5, 2023September 27, 2023 by careyourpresent

Many people trade Singapore Stocks. There are many brokerages that offer Singapore Stocks trading; however, the key differences are whether the shares would be stored in the Central Depository (Pte) Limited (CDP) or Custodian with the brokerages. CDP is something very unique in Singapore Context. For oversea shares, definitely, the shares will be stored with the custodian brokerages.

By right, these brokerages would provide separate account for the investor, segregated from the company’s accounts. Hence, in the unlikely scenario of any bankruptcy of the custodian brokerage, your shares would still be safe. However, in real life, it may or may not happened.

What is Central Depository (Pte) Limited (CDP)

The Central Depository (Pte) Limited (CDP) was established in 1987 and is a wholly owned subsidiary of SGX. CDP provides integrated clearing, settlement and depository services for a wide range of products in the Singapore Securities Market. In the realm of securities trading, the Central Depository (CDP) of Singapore plays a vital role in ensuring the smooth functioning, efficiency, and security of the market.

The Central Depository (CDP) serves as a trusted custodian and clearinghouse for securities traded on the Singapore Exchange. It acts as a central registry, holding and safeguarding securities such as stocks, bonds, and treasury bills, in an electronic form. Through its infrastructure, the CDP facilitates the settlement, transfer, and safekeeping of securities, providing investors with a reliable and efficient platform to buy, sell, and hold their investments.

How it work?

Before one can buy/sell any shares/bonds that listed through Singapore Exchange, investors need to open a personal CDP account or joint CDP account with someone.

If you buy/sell any Singapore shares through traditional brokerages (such as Poems, Lim & Tan, DBS Vickers, iOCBC etc that is link to your CDP accounts), the brokerages will become the middleman in the selling/buying process, but your shares would be transferred/stored via your personal/joint CDP. You can buy using brokerage A, store shares in CDP, then sell your shares using brokerage B.

This is something very unique in Singapore Context because overseas shares are stored via custodian accounts with the brokerages such as Interactive Brokers, Saxo, Moomoo, Webull etc. One can only buy/sell through the custodian brokerages that your shares are with.

As more conservative investor, most would prefer to store their shares via CDP. However, with new brokerages operating in Singapore, one has another option to opt and use these brokerages instead of through CDP.

Why so?

The main reason(s) would be the commissions.

If one use traditional brokerages, one would need to pay about $35 commissions for a trade of around S$1 to S$9000. Yes, you didn’t see wrongly, $1. Hence, minimally one would need to make each buy around $9k to make the commissions worth it.

With the new companies such a WellbullSG, Moomoo, Tiger on board, one can buy very little Singapore shares with little commissions, but what is the catch?

You will need to store your shares with the brokerages directly instead of CDP.

I am not sure about you, personally, I prefer to keep my shares that I want to keep very long term with CDP such that buy/sell the shares with any CDP link brokerages. However, I also want to have my cake and eat it too! Hence, what is the solution?

Solution – Cheap Commissions but keep your shares with CDP

There are two solutions that I am aware of.

Solution 1

Buy your shares with DBS Vickers Cash upfront account. Cheap comms to buy and the shares will be stored in your linked-CDP account after purchase. This is a very popular options with many investors! I used to use this method in my early years of investing, but I did not use this method now. Why?

As part of estate planning, I have moved all my equities to joint account with my spouse. My spouse is a total noob in shares buying/selling, brokerages, wills etc. Hence, I need to plan everything out well, especially I still have two young children. Although Will can cover personal account, one still need to apply for Grant of Probate upon demise, which would take some work. Hence, as far as possible, I try to keep, cash/shares etc in Joint account for the survival ownership clause (the surviving party will take the assets).

As a result, I can’t use Cash Upfront trading anymore as this is for individual account link to individual CDP. Furthermore, the trades are only applicable to Buy Trades.

Solution 2

I use FSMone Account.

Let me shameless do some promotion for my referral first in order to keep my current blog going (need to pay hosting and domain fees). For those are keen to apply FSMone account, can do so via my referral link in my referral page. Of course, there are also other interesting, good platforms that I am using, do consider sign up via my referral too.

Let me share more about FSMone account. What I did was to open up 4 accounts:

Account 1: I am the main holder.
Account 2: I am the main holder with my son as beneficiary.
Account 3: I am the main holder with my daughter as beneficiary.
Account 4: I am the main holder with my wife as beneficiary.

Key Things to note about FSMone Beneficiary Account

A Beneficiary Account in FSMOne.com is useful if you are planning a separate portfolio for another person. In the event that any one person in the beneficiary account passes away, the assets of the account will belong to the surviving person.

The main applicant (main account holder) of this beneficiary account must be above 18 years old. Please note that the main applicant is still the key operator of this account and the owner of the assets invested under this account as long as the main applicant is still alive. All correspondence will be notified to the main account holder.

In the event that the main applicant has passed away, the beneficiary holder (upon 18 years old) is required to bring the death certificate and his/her own IC to our office. We shall open a personal account for the beneficiary holder and then transfer all the holdings registered under the beneficiary account into the new account. Thereafter the beneficiary will have rights towards the holdings and he/she will be able to purchase, switch or liquidate. The beneficiary can decide to liquidate the funds if wishes to.

If the beneficiary is a minor (below 18 years old), then the surviving parent will automatically become the legal guardian. The legal guardian will be able to give instructions. If the beneficiary wants to keep the investments, then he/she has got to open a new account with existing parent as main applicant and minor as beneficiary and transfer the holdings from old account to the new one.

https://secure.fundsupermart.com/fsm/advice-services/faq/8660/

https://secure.fundsupermart.com/fsm/advice-services/faq/998/

With Above…

With the above, it totally suits my needs about estate planning. If anything were to happen to me, my wife just needs to do the simple thing below to access the assets!

Hence, I mainly used account 4 to trade the money from my wife and my money. For account 2 and 3, I keep their ang bao money in Autosweep (that earns 3.14%) while waiting for great chance for me to invest their money!

CDP and FSMone

Back to the main topic of saving commissions while keeping shares in CDP, FSMone allowed the transfer of shares bought in FSMone to CDP for free!

Taking a step further, if we compared to the commissions to trade SGX listed shares, it cost about $35 to trade S$10k worth of shares with traditional brokerages that are linked to CDP whereas it cost only about S$15 to trade S$10k worth of shares with FSMone. That’s almost $20 differences! A restaurant meal! Don’t forget the additional benefit of estate planning.

Hence, for this account 4, usually I would use it to buy/sell shares for those that I plan to trade short term with cheap commissions, then regularly I would transfer those shares that I want to keep for longer term into CDP. The transfer process is fast and quick! I have done a couple of transfer before. Let me share the latest one!

On 17 Jun, I have sent in request to FSM to request the transfer of three shares – Boustead, MIT and Areit from FSM to CDP. The transfer is done on 21 June 2.41pm with the shares minus from my FSMone account and credited to CDP account.

Let me share more about the Transfer Process

Step 1: Fill up the transfer Form

To transfer out your stocks/ETFs to CDP, please complete FSMOne Security Transfer-In/Out Instruction (Cash) and send it to us via email.

https://secure.fundsupermart.com/fsm/advice-services/faq/2195/

How to fill the form:

There are some parts of the forms which I don’t know how to fill until I went to ask FSMone customer service. Since I have the information now, let me share it. See the screenshots below.

Take note of the Counterparty name and Contact No. / Email Address

This part of the form quite easy and just fill accordingly.

Step 2: Download your latest statement of Holdings in FSMone

Download and attach a copy of the latest statement of holdings (dated within 3 months) with this transfer form and follow step 3.

Step 3: Send to FSM and wait!

Email your transfer form (step 1) and latest statement (step 2) to [email protected].

After that just wait for the acknowledgement and the transfer to take places.

I have done the transfer at least 5 times, so far all of them took within a week with only 1 time that took about a month. That’s why FSMone normally will tell you take 1-2 weeks but usually it’s faster than that.

FSM acknowledgement email on
Jun 17, 2023, 9:19 AM

The Secret Conclusion

I hope this article will be useful to you.

I have shared the method that I have used to purchase Singapore Shares –

Open beneficiary accounts with spouse and dependents such that estate planning is in place.

Put in the family allocated investment Cash into Autosweep while earning 3.14% interest and waiting for the best time to buy/sell.

Buy/Sell Singapore Shares using FSMone with cheap commissions of about S$15 for minimum S$10k worth of Shares. Sometimes I bought $20k worth, it’s only cost me S$18.

For Shares of other countries such as HK, I use FSMone too since estate planning is in placed.

For US/LSE/AUS shares, I use interactive brokers but I try to keep US shares within 60k because of Estate Tax.

For those Singapore Shares that I plan to keep long term, I would transfer them to CDP for free!

Thanks for reading!