A checklist for managing ageing parents’ finances

LOSING our loved ones is bad enough but the anguish of dealing with estate matters can be reduced to some extent. Having dealt with a few recent deaths including that of my father and uncles, I realised that that there are steps we can take to ease the stress of managing the aftermath.

Doing so would tie in nicely with bank initiatives that kick in next year where procedures would be aligned to provide simpler processes and better support for family members in estate administration, such as guidance for Lasting Power of Attorney (LPA), deputyship, and activation processes, as well as help with account closures for the deceased.

Here’s a checklist on how to manage our aged parents’ finances.

1. Start early

Starting the conversation early is vital as end-of-life matters are not easy topics to broach and may take time.

Asking where their assets are and who they wish to bequeath them to, may feel like an invasion of privacy. But it does result in a more hassle-free settlement of their estate after they go, as well as reducing unnecessary family conflict.

For a more collaborative way to frame the discussion, reiterate that you wish to protect their hard-earned monies and assets and avoid unnecessary leakage while ensuring that their wishes are respected.

2. Gather information

You’ll need more information to map out a comprehensive financial footprint of the incoming and outgoing money sources.

A good start is to list bank accounts; note if there are joint holders and the balances.

Find out what are the income sources, like Central Provident Fund (CPF) payouts, insurance, rental income and allowances from children. And their liabilities such as mortgage, recurring payments, outstanding medical bills and so on.

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Make a list of the assets they own, including financial products, and the estimated value. For jewellery, you can encourage them to name the beneficiaries for each item and keep it in separate containers with the beneficiary’s name labelled on it.

Keep details of insurance policies such as policy numbers, premiums and payment schedule.

Understand the scope of coverage so you can make informed decisions during a medical crisis, such as the level of care the plan covers and advising the hospital to e-file to the insurer for letters of guarantee and invoicing.

Have a directory of the financial representative, doctors and lawyer, if any.

3. Enabling account access

Where appropriate, consolidate unnecessary or dormant bank accounts into a primary account.

To avoid lapses in payments, consider automating recurring payments. Review and cancel any unnecessary subscriptions or memberships.

Before my dad died, I consolidated his bank accounts and established a joint account so that I have authorised access. This helps to reduce the administrative burden and allows easier monitoring.

Though dad had a will, I need not apply for a Grant of Probate as his main asset was a Housing & Development Board flat and the surviving joint tenant, my mom, automatically inherits full ownership of it.

In the case of my widowed uncle who had a will, a Grant of Probate was required to sell his flat for distribution to the named beneficiaries. We also used the legal document to sell off his only stock investment of 500 Sats shares worth about S$2,200.

In hindsight, I could have advised my uncle to sell off his shares since they were an insignificant amount. This is because there is some administrative hassle to redeem a deceased person’s share holdings.

It involves e-mailing some forms, the Grant of Probate and death certificate to the Singapore Exchange (SGX) and going through a verification process, before the shares can be transferred to an estate trading account or the beneficiary’s Central Depository account.

There was an incident last year where a dutiful daughter engaged a lawyer to liaise with SGX to sell five shares (in three counters) of her deceased mother’s estate. The liquidated shares amounted to less than S$1,000, but the legal fee was S$6,000.

4. Estate planning tools

Common estate planning tools include a will, CPF nomination, LPA, an Advance Care Plan and in some cases, a trust.

Setting up the legal tools while your ageing parents have mental capacity would allow you to seamlessly step in if they can no longer think or act on their own. This can avoid costly and lengthy court processes in the future.

Even if a will has been set up, ensure that it is current. If there are joint executors, it helps if they can get along and are responsible.

An elderly man appointed his son and granddaughter as joint executors in his will. He died in 2023 but his estate is still not settled as both executors could not see eye to eye on how much the deceased’s apartment should be sold at.

CPF savings cannot be distributed via a will. So, confirm that a CPF nomination has been made and is up to date.

Understand how the nomination framework works. For instance, if a nominated beneficiary has died and if the nomination remains unchanged, his share will be automatically re-distributed to the remaining nominees, upon the death of the CPF member.

For the LPA, do ensure trusted donees are appointed to make decisions regarding the donor’s personal welfare and property/affairs in the event he loses mental capacity.

Discuss and document their preferences for future healthcare and medical treatments while they have full capacity. And, appoint up to two nominated healthcare spokespersons via Advance Care Planning.

The writer is head of financial planning literacy at DBS