Recent surveys from Singapore and Australia show that many adults have not prepared a will. Professor of Practice in Financial Planning, Dr Adam Steen, writes that estate planning will spare families distress in times of grief.
Figures from a recent survey of adults in Singapore support those of an earlier survey in Australia and indicate that, irrespective of country or ethnicity, people are generally unprepared for death and disability[i].
Results of both surveys, undertaken by the Society of Trust and Estate Practitioners (STEP) indicate a high proportion of adults do not have a will (Australia 44.90% and Singapore 56.17%). Further, only a small proportion of adults in either country had Powers of Attorney in place in the event of incapacity.
Only 19 per cent of Australians and around 11 per cent of Singaporeans had an Enduring Power of Attorney.
Around 6 per cent of adults in both Singapore and Australia had advanced care directives which allow people know your wishes about your healthcare and treatment should you find yourself in a position where you are seriously ill or injured and not able to make decisions.
In addition, over 60 per cent of adults with children under 18 years of age had not established guardianship.
There were more similarities found between Australians and Singaporeans.
Most of the respondents with businesses did not have a formal succession plan.
Businesses owned by survey respondents operated under a range of legal structures including sole trader, partnership, trust or company. A significant proportion were family businesses.
Less than 40 per cent of Australian business operators and just over 50 per cent of Singaporean business operators indicated they knew what would happen to their businesses if they became incapacitated or pass.
Both Singaporeans and Australians had numerous online assets.
In order of the most commonly held online assets were Email accounts, Social Media Accounts and Financial Institutions and Payment Gateways with only a small percent of those surveyed having no digital asset at all.
The vast majority of those with digital assets (71.25% of Australia’s and 64.81% of Singaporeans) were unaware of what will happen to their digital assets on death or disability.
Prepaid funeral plans existed in both counties however only a small percentage of people had them. 13.7 per cent of Australians had a prepaid plan and 14.81 per cent of Singaporeans had one.
One interesting difference in the results of the two surveys was in terms of how thoroughly Singaporeans and Australians had discussed their will with their spouse, partner or family.
46.75 per cent of Australian’s indicated that they had thoroughly discussed their will while only 9.88 of Singaporeans noted the same.
While this could be put down to cultural differences the important point is that in both countries the majority of people had either not discussed their will at all or had only briefly discussed it.
Another important distinction between the results of the two surveys was that life insurance was much more widely held in Singapore than Australia.
36.76 per cent of Australians and 80.25 per cent of Singaporeans held life insurance.
Presumably, part of the difference can be explained by the fact that life insurance premiums can be deductible in Singapore. It is also possible that there is a degree of underreporting in Australia as many Australians have a level (albeit small default level) of life insurance in their superannuation (pension) funds and may have not considered this in their response.
Existing evidence is that Australians are under insured and most superannuants who have a life insurance option within their superannuation maintain the default cover without changing this.
Irrespective of country and culture, it is human nature that people do not like to talk about disability and death. But the reality is that we will all be faced with these issues at some time.
Being thoroughly prepared can reduce the stress on partners and family, both financially and emotionally.
Wills can inform others of our wishes regarding the disposal of assets, trusts can be established which ensure asset protection and tax minimisation for those who depend on us, while powers of attorney can ensure our wishes on disability are enacted.
For those of us who operate businesses, having thought through and transparent business succession plans can avoid business interruption and foster continuity.
Finally, with ever-increasing digitisation affecting our lives, understanding our rights and responsibilities with respect to online assets is important particularly when it comes to what will happen to them should we become incapacitated and pass.
[i] See Steen, A., D’Alessandro, S., Olynyk, M., (2020). Estate Planning in Singapore. Deakin University and Steen, A., D’Alessandro, S., Graves, C., Perkins, M., Genders, R., Barbera, F.,Shi, H., McGrath and Davis, N., (2017). Estate Planning in Australia. Charles Sturt University.