According to a survey done by estate planning firm Rockwills Trustee, it was found that only 33% of 751 Singaporean respondents have drawn up their wills. Many Singaporeans delayed writing their wills, so much that at a national level, it was estimated that only 15 to 20 per cent of Singaporeans have prepared their wills.
The survey also found that only 49% of respondents showed interest in trusts for estate planning, and 10% of those people were already in the midst of trust planning. While some people didn’t proceed with trust planning because they don’t have enough assets or they feel that their beneficiaries can fund themselves in the future, the majority of the respondents didn’t come through because they were unsure of how to proceed.
Both will and trust are estate planning tools, but they each serve different purposes. A will is a legal document in writing that is signed by you, the testator, and the executor to allocate your assets after your passing. A trust, on the other hand, is a legal arrangement between a settlor and a trustee. This legal arrangement shows assets that will be managed by the trustee for the benefit of the beneficiaries.
If you’re wondering what differentiates between a will and a trust, the most obvious difference is that a trust takes effect immediately after creation while a will can only take effect after the will writer has passed away. But do know that both a will and a trust can be revised or amended until your passing, or for as long as you are mentally capable.
A trust can remain private. What this means is that it can be carried out outside of probate, so the court doesn’t have to supervise the process. A trust can hold properties for beneficiaries who are still minors and even those who might misuse their inheritances—ensuring protection for all parties involved. A will, however, cannot remain private and must go through probate. The court will have to oversee the process to ensure its validity and that the asset distribution is as the will writer’s stipulation.
Lastly, a trust only includes properties that are transferred to the trust account. Therefore, to include the properties, it must be appointed to the trust. A will only cover properties that are under your name as of the time of your passing. To make it clearer for you, here’s a summary of the differences between a will and a trust:
| Will | Trust |
| A legal document in writing that is signed by you, the testator, and the executor to allocate your assets after your passing. | A legal arrangement between a settlor and a trustee that shows assets that will be managed by the trustee for the benefit of the beneficiaries. |
| Takes effect only after the death of the owner. | Takes effect immediately. |
| Covers only properties that are in your name as of the time of your passing. | Includes only properties transferred to the trust account. |
| Passes through probate. | Can be executed outside of probate. |
| Public record | Private record |
You can have both a will and a trust because they’re both different legal documents. To have the most comprehensive estate plan, you must understand the type of will that you’ll need to go along with your trust. You must also ask yourself questions such as “Do you have children to name guardians for?”, or “How will you declare your final wishes?”. Almost everyone should have a will, but not everyone should get a living trust. Depending on your situation, it’s best to consult with a professional and let them assist you in this process.
Luckily for you, we have financial advisers who specialise in trust and will planning. For more information, contact us here. If you seek a promising career as a financial adviser and would love to join our team and learn more financial tips and tricks from our seasoned advisers, join us today!