Recently, my colleague passed away unexpectedly, leaving behind two young daughters and wife. His wife is a full-time housewife. In grieving his death, I wondered whether my family would be able to cope if I suffered the same fate. Like my late colleague, both of us are sole breadwinners. So, I can imagine the family’s financial concerns and the fundamental questions on the destiny of CPF monies upon death.
Most often, there are misconceptions on the distribution of CPF monies upon death. There were even false rumours that Medisave savings go to the government after death as they are not included in CPF Nominations. In this article, I will attempt to explain the framework and try to gain a better understanding of the system. Again, I must put a disclaimer that this article is not meant to be a legal nor financial advice. In case of any doubts, please seek advice from licensed professionals.
Upon death, you would want your loved ones to have access to your CPF savings. This is especially so if the family’s financial situation is not so ideal. You don’t want your family to undergo financial hardship after you passed on. Ultimately, how you plan your estate will determine the outcome. For example, previously I wrote that CPF monies cannot be included in your Will as they do not form your estate.
In the following, I will explain the process of the distribution of your CPF monies. Basically, it really depends on the decisions you made before death. Most crucially, the situation is dictated by whether you have made a CPF nomination. Read carefully and think through carefully before making judgement.
With CPF nomination
If CPF nomination had been made, things are quite straight forward because the CPF monies will be distributed in accordance to the nomination by the CPF Board. Generally, the CPF monies will not go through the Public Trustee for administration and will not be distributed in accordance with the Intestate Succession Act. But things become very tricky if you happened to nominate your young children as nominees [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
Read my other articles on CPF:
- CPF nomination and making a Will
- Devastating HDB Loan and CPF Accrued Interest
- CPF’s Home Protection Scheme (HPS)
- The Dark Side of CPF Housing Withdrawal Limit
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