In this article, the nomination I mean is the naming of beneficiary(ies) for three assets, namely your Employees Provident Fund (EPF), life insurance and personal accident insurance, and Private Retirement Scheme (PRS). This is part of your estate planning.
The beneficiary(ies) of these assets are known as nominees.
Why should you make the nomination?
As these assets will be paid directly to the nominees, they bypass the probate process. It means that your beneficiary(ies) does not have to apply for Grant of Probate or Letter of Administration to access the money (click here to learn more about the process). As long as the conditions are met, the money will be paid the the nominee(s) directly. This saves them the headache and also prevent your nominee(s) from facing financial difficulty due to frozen assets after your passing.
We will see the nomination process of these assets now.
EPF
You can make your nomination online or at EPF branch. However, even if you choose to make your nomination online, you still need to go to an EPF branch for fingerprint verification.
1. Branch visit
You can visit the nearest EPF branch and tell the officer that you would like to make nomination for your account. The officer will guide you to make your nomination.
2. Online
You can do this on the KWSP i-Akaun app or its website. After logging in to your account, go to Profile and there is an option for Nomination. Update your nomination accordingly. Next, visit the nearest EPF office at your convenience for fingerprint verification.
Life insurance and personal accident insurance
The nomination can be made by contacting your insurance agent or company. Normally, you need to fill a nomination form and send it back to the insurance company. Sometimes, you may have already made your nomination when you sign up for the policy. Check with your insurance agent or company to see if you have done your nomination.
If you have not made your nomination yet or want to change the nominee(s), do the necessary to update it. For certain categories of nominees, the money paid out of the life insurance may not be subject to the deceased’s creditor’s claim. You may clarify this with your insurance agent or company.
PRS
For PRS, the nomination must be made through a Private Pension Administrator (PPA) Nomination Form. The form must be signed and sent back to PPA. You can download the form from the PPA website (click here) or request the form from your PRS agent or provider. You must submit the completed form back to your PRS provider for them to forward your nomination to PPA.
I can also email the form in PDF format to you if you want. Just email me at leckas@myfintalk.com with the subject “PPA Nomination Form”.
The benefits of nomination
1. Take care of your loved ones.
By nominating your family members or dependents, you allow them to access the funds seamlessly, thereby providing crucial financial support during challenging times.
2. Streamline fund distribution.
Without a valid nomination, the process of distributing funds can become complex and time-consuming. A clear and updated nomination ensures that the funds are distributed efficiently, minimising hassle for your family when they need the money the most.
3. Peace of mind.
Knowing that you have taken the necessary steps to secure the financial future of your dependents can provide unparalleled peace of mind.
Conclusion
Given the complexities of estate administration process, it may take quite some time for your dependents to access your assets after your passing (one – two years with a valid will and three to seven years or longer without will). However, the money from EPF, life insurance and PRS will be paid out to your nominees once they submit the proof of death. Thus, you should make nominations for these assets as soon as possible.
You can always change your nomination when your circumstances change. Just repeat the same process and provide anything that the providers ask for. This is particularly important in the case of marriage, divorce, or the birth of children. Regularly reviewing and updating your nomination ensures that your benefits align with your current family structure and preferences.
How can a financial planner help you?
The nomination of these assets is just part of estate planing. Other than reminding you on these nominations, I will work with you to plan your estate and write a will. We will establish your wishes and select the appropriate tools to ensure your assets will be distributed according to your wishes. Furthermore, we will find ways to make sure that your liabilities will be cleared off in the event of your demise and your assets can safely pass on to your intended recipients.
Once the process is complete, it does not mean that the instructions cannot be changed. If your circumstances change, we can always review your estate plan and amend it according to your wish. Do not hesitate to let me know when the situation arises.
If you are interested in working with me to plan for your estate, just leave your details by clicking the button below. I will reach out to you and see if we would be a good fit for each other.
If you are not ready to take action yet, join my email list to receive useful information to improve your finances by clicking here.
Disclaimer: This post is for informational purpose only. You should use judgment and conduct due diligence before taking any action or implementing any plan suggested or recommended in this article.
