CPF Nomination

Full article: Article by Lorna Tan.

This is an insightful article by Lorna Tan on CPF Nomination- even I gained new information that i previously did not know.

CPF nomination is something that I have always gotten my clients to do as soon as they start on the legacy planning process. Reason being that your written will does not cover CPF monies. However, there are still many individuals who believe that it is ok to solely rely on the intestate succession act (ISA) for distribution.

However, the below tidbits of information may change your mind on how a specific nomination can work in your favor.

Prior to 2011, this was not possible and CPF would typically pay out a cash lump sum to the beneficiaries. However, with this option, CPF members can create a safeguard- and ensure that their nominees use the money gradually (via enhanced retirement payouts/ ensuring sufficient money to cover for healthcare needs)

 

(The only exception to this is if the nominee is the deceased widow.) This could potentially be an issue if a CPF Member leaves behind no insurance/savings and is solely depending on his CPF Monies to care for his children. In view of this, I believe it is exceptionally important for CPF members to decide on the nomination rather than follow the ISA, where by default, spouse gets 50% and children get 50%.

Unknown to many, CPF actually has the special needs saving scheme that can help parents of children with special needs to save for their long-term care needs. Parents can nominate their children to receive monthly disbursements from the parent’s CPF savings after death. This scheme is administered by the Special Needs Trust Co and is probably worth looking at if of relevance.