Planning your estate can feel like a puzzle. One of the biggest questions many people ask is: Can I use my will to distribute insurance proceeds? It’s a fair question, after all, if you’re writing a Will to make sure your loved ones are taken care of, it seems natural to include your life insurance policies too.
But in Singapore, things aren’t always that straightforward. Whether or not your Will can determine where your insurance money goes depends on a few key factors.
Let’s walk through what you need to know to make sure your wishes are honoured the way you intended.
So, Can I Use My Will To Distribute Insurance Proceeds?
The short answer: Only in some cases.
Here’s when you can use your Will:
- No Nomination Made: If you haven’t nominated anyone, the insurance proceeds will go into your estate. Your Will then decides who gets what.
- Revocable Nomination: If you made a revocable nomination (which allows changes), and then cancel it, your Will can apply, but only if no new nomination is made.
Here’s when your Will won’t apply:
- Irrevocable Nomination: If you made an irrevocable nomination, the insurance company is legally bound to pay the named person. Your Will has no power here.
- CPF-Related Policies: If the policy is tied to your CPF (Central Provident Fund), other rules come into play, and your Will typically won’t control the distribution.
So, can I use my will to distribute insurance proceeds? Only if there are no valid nominations at the time of your passing.
What Happens To Your Insurance Proceeds After Death?
If you have made a nomination under your life insurance policy, the proceeds will go directly to the nominee. This is a private contract between you and the insurance company. Once the insurer has a valid nomination on file, they are legally bound to pay the nominated person or persons. In this case, your Will does not influence that payout.
On the other hand, if no nomination has been made or if a previous nomination has been revoked, then the insurance proceeds are considered part of your estate. That means they can be distributed according to your Will.
It’s also worth noting that some insurance policies are linked to your CPF savings, and those have their own set of rules. CPF-related policies often follow CPF nomination laws, not your Will. So, even more reason to review everything as a whole.
Types Of Insurance Nominations: Revocable Vs Irrevocable
When it comes to naming someone to receive your life insurance payout, you’ll be asked to make a nomination. But not all nominations are treated equally under Singapore law.
Revocable Nominations
A revocable nomination gives you flexibility. It means you can change or cancel the nomination at any time, without needing the consent of the person you’ve nominated. This is especially useful if your personal circumstances change, such as after a Divorce or the birth of a child.
If you revoke this nomination and don’t replace it with a new one, the insurance proceeds will be treated as part of your estate. This is where your Will can come into play, allowing you to decide how those funds are distributed.
In short:
- You can change it at any time.
- The nominee has no legal rights until your passing.
- If revoked or absent, your Will applies.
Irrevocable Nominations
An irrevocable nomination, on the other hand, is a much stronger legal commitment. Once made, it cannot be changed or withdrawn without the nominee’s written consent. This type of nomination effectively removes the insurance proceeds from your estate entirely.
Even if you later write a Will that says otherwise, the insurance company will still be legally bound to pay the nominee directly. This type of nomination is often used when you want to provide long-term financial security to a spouse, child, or dependent, and you’re certain about your decision.
In short:
- Cannot be changed without the nominee’s approval.
- The payout bypasses your Will and estate.
- The nominee has a legal right to the proceeds.
Conclusion About Using A Will To Distribute Insurance Proceeds
So, can I use my will to distribute insurance proceeds? The answer lies in whether you’ve made any nominations and what type they are. In Singapore, nominations often override Wills, so it’s important to align both if you want your loved ones to be taken care of properly.
If you’re unsure about your situation or how to proceed, the team at Tembusu Law is here to help. We offer clear, professional advice from the best criminal lawyers and family lawyers in Singapore.
Don’t leave your legacy to uncertainty and contact us today to safeguard your wishes.
Frequently Asked Questions About Using A Will To Distribute Insurance Proceeds
Can I Change The Nominee Of My Life Insurance Policy Anytime?
Yes, if you’ve made a revocable nomination. You can change it at any time. However, if it’s irrevocable, you’ll need the nominee’s written consent to make any changes.
What Happens If I Don’t Nominate Anyone?
If no one is nominated, your life insurance proceeds will form part of your estate and be distributed according to your Will (if one exists) or under intestacy laws.
Does A Divorce Automatically Cancel My Insurance Nomination?
No, Divorce does not automatically revoke an insurance nomination. You must update the nomination yourself after the Divorce to avoid unintended payouts.
Can I Name My Minor Children As Beneficiaries?
Yes, but the money will typically be held in trust until they reach legal age. You should appoint a trustee to manage the funds in the meantime.
Is It Possible To Nominate A Charity Instead Of A Person?
Yes, you can nominate a registered organisation or charity to receive your insurance proceeds if that aligns with your wishes.
