Key Differences
Estate planning in Singapore involves two key legal instruments: a will and a trust. While both serve the same purpose of ensuring assets are distributed according to an individual’s wishes after their death, there are several key differences to be aware of.
Firstly, a will is a document that outlines an individual’s wishes for asset distribution, while a trust is a legal arrangement where a trustee manages assets on behalf of beneficiaries.
Probate is the legal process of confirming a will’s validity and distributing assets. In Singapore, a will must go through probate, which can be time-consuming and costly. However, a trust bypasses probate, making asset distribution more efficient.
Privacy is another consideration. Wills become public documents during the probate process, while trusts remain private, protecting an individual’s privacy.
Flexibility is also important. Wills are relatively inflexible once signed, but trusts can be amended as needed, as long as the individual who created the trust is still alive and has mental capacity.
Finally, there are tax implications to consider. Estate duty is a tax on the value of an estate, but assets held in a trust may not be subject to it.
When deciding between a will and a trust, individuals should consider their specific needs and seek professional legal and financial advice. By understanding the differences and benefits of each instrument, individuals can make informed decisions about their estate planning.