Probate & Succession Planning PDF

Probate & Succession Planning Dying Testate v Dying Intestate Goh Kok Yeow COMPARATIVE TABLE OF ADVANTAGES OF DYING TESTATE VS DYING INTESTATE (NON-MUSLIMS) 1: Right to choose one's beneficiaries and determine their legacies. Dying with a valid will...

Probate & Succession Planning Dying Testate v Dying Intestate Goh Kok Yeow COMPARATIVE TABLE OF ADVANTAGES OF DYING TESTATE VS DYING INTESTATE (NON-MUSLIMS) 1: Right to choose one's beneficiaries and determine their legacies. Dying with a valid will Dying Intestate Testator has a free hand (subject only to Succession to estate is determined by the leaving reasonable provisions for provisions of Intestate Succession Act; dependants). Estate may be inherited by persons who are not deserving or who will get a larger share than those who deserve or need more, or even by the State (bona vacantia). [Inheritance (Family Provision) Act] At the same time, people who the intestate may have assumed would be beneficiaries –e.g., step-children – will not be entitled to claim a share of the estate. 2: Ability to choose the Executor and Trustee of one’s Will and set the terms of appointment. So – even though Section 400(1) of the IRDA disqualifies a bankrupt from being appointed or acting as a personal representative, except with the leave of Court, the Court is more likely to allow a bankrupt named as executor to take up the appointment (as it was the testator’s choice) Note – Choice of Executor It is important to advise the testator that they should choose an executor who will or is likely to accept the appointment (and also have a substitute executor in the event that the executor who is appointed refuses to be the executor, i.e., he renounces the appointment or dies before the testator or is unable through disability to apply for probate). If the executor is unable or unwilling to apply for probate, grant of letters of administration (with will annexed) pursuant to Section 13 of the PAA has to be applied for by the persons who are eligible for such grant shown at S 13(2), PAA. In such a case, the difficulties and hassles of obtaining a grant of LA (with will annexed) would be very similar to a case where there was no will, albeit that after the GLA (with will annex) has been obtained, the estate can be distributed pursuant to the will. Copyright © 2024, Singapore Institute of Legal Education 3: Minimum number of executors or personal representatives to administer an estate with a beneficiary who is a minor  4: Vesting of deceased's estate Dying with a valid will Dying Intestate The testator’s assets vest in the Does not vest in the administrators until executor(s) upon death, and this (in after letters of administration have been principle) enables the executor to obtained. Will vest in the Public Trustee handle the deceased’s affairs after in Singapore until a Grant is obtained by death even before he has obtained the the Administrator. grant of probate, subject to the need for him to produce the grant of probate, The Estate will be in a state of limbo until when required by the other party. a Grant of LA is obtained by the Administrator.  5: Appointment of Guardians for infant children Dying with a valid will Dying Intestate A Testator who has infant children can appoint Where a person has died intestate, leaving testamentary guardians for the children. The children and the other parent of the children Testator has free choice to appoint a surviving him, the surviving parent is the sole testamentary guardian, and that guardian guardian, regardless of how the deceased appointed under the will of the deceased parent may have thought of the ability and parent shall act jointly with the surviving suitability of the surviving parent to be the sole parent of the infant so long as the other parent guardian. remains alive, unless that parent objects to his If both parents have died without a will, there so acting (S. 7(3), Guardianship of Infants Act). may be disputes between the next-of-kin of If the surviving parent objects, the both parents to be appointed guardians (and testamentary guardian can apply to court for thereby control the finances of the estates of orders to be made under S7(4). the deceased parents. Refer to ss. 6 and 7 of the Guardianship of Infants Act (Cap 122) 6. Intestacy: Need to prove deceased's religion, custom, personal law and ages and share entitlement of the beneficiaries, etc. Dying with a valid will Dying Intestate Generally speaking, no such requirement for A great deal more information has to be such additional information to be provided. obtained during instruction taking for LA However, if the will was executed outside applications, as the applicant’s entitlement Singapore, the Court may ask for an affidavit to apply for grant, the deceased’s religion, of foreign law to confirm the formal validity custom, personal law and ages and share of the will (per Section 5 of the Wills Act) entitlements of the beneficiaries have to be and if the will was a homemade will and/or ascertained and confirmed. These additional it was not signed or witnessed properly, the steps will cause delay in obtaining and Court may require an Affidavit of Due extracting grant of letters of administration, Execution of the Will to be filed by witnesses and this is exacerbated if the deceased had a to the will. foreign domicile, as the Court will require an Affidavit of Foreign Law by a foreign lawyer. 7: Shorter time and cheaper to obtain probate vs LA. Dying with a valid will Dying Intestate The grant of probate can be obtained Even in the most straightforward of cases faster and at lower expense for legal costs (and even if sureties and administration and court filing fees if there is a valid will bonds are not required), it is slower and – fewer documents to be filed more costly to apply for a grant of LA as opposed to grant of probate. More documents have to be filed for a LA application than for a probate application.  8 Power to carry on the deceased's affairs and calling in of the deceased’s assets Dying with a valid will Dying Intestate Executors have the power from the time The intending administrators have no the Deceased dies, to carry on the such power until they obtain the grant of deceased’s affairs and call in the assets LA. (subject to the validations of their actions Administrators cannot give good by extraction of probate of the will, and discharge for any payments that they any restrictions contained in the will). collect until and unless a grant of LA has been obtained. 9: Chain of executorship Dying with a valid will Dying Intestate If, after obtaining the grant of probate, the There is no equivalent in the executor dies without having completed administration of intestate estates. If the the administration, the executor of the administrator dies without completing the executor’s will (if there is one) steps into administration, the beneficiaries will have the deceased executor’s shoes and to apply for a grant de bonis non, which continues wit the administration of the essentially is a fresh application to court. testator’s estate. See Section 25 of the Civil Law Act. 10: Administration Bond / Sureties to the Admin Bond Dying with a valid will Dying Intestate Where there is a will and the executors prove All applications for LAs to the Family Division of the the will, S 29 PAA does not apply. Therefore, High Court (HCF) require the administrator to there is no need to provide sureties or the execute an administration bond and to provide 2 sureties (unless otherwise ordered by the Court or administration bond. There are very an order for dispensation of sureties is granted). substantial costs savings and time savings in such a case, as there is no need to apply for For LA applications to th Family Courts, if the dispensation of sureties (which would incur circumstances of the Estate falls within certain oath fees to be paid for the affidavit to support classes as set out in the Family Courts (para 68 of such application), no need to file an the FJCPD), Admin Bond and 2 sureties also needed, Administration Bond, no need for the to guarantee the Administrators’ proper performance executors to have to look for 2 people who will of the administration. The amount to be secured is be prepared to be surties. the gross value of the estate. 10: Administration Bond / Sureties to the Admin Bond (cont'd) Dying with a valid will Dying Intestate It can cost hardship and embarrassment to the Administrator to have to ask around for people to volunteer to be sureties. Some people may even want to charge a fee to be sureties, which will have to be paid out of the estate. Application for dispensation of sureties will add to the costs of the matter. Time, cost and delay involved in extracting grant. 11: Preservation and protection of family wealth Dying with a valid will Dying Intestate A testator can stipulate that part or the Without a will, the beneficiaries are whole of the family wealth is to be entitled absolutely to receive their full preserved subject to the rule against entitlement under the ISA once all the perpetuities and accumulations, for estate has been collected in and debts a period of time. This would ensure that paid. The administrator has no power family wealth is not squandered by to delay the distribution (and the heirs. administrator would be in breach of fiduciary duty if he does so).  12: Saving of Stamp Duty Dying with a valid will Dying Intestate The transfer of an intestate deceased person’s There is no stamp duty payable for the transfer by assent of a devised property to the named property by way of intestate succession laws could result in the beneficiaries having to execute beneficiary. This could result in very substantial savings in stamp duty. a subsequent Deed of Family Arrangement in order to re-distribute the estate according to deceased’s wishes. This will result in very high ad E.g: “I give my house at 1, XXX Road, Singapore valorem stamp duty (plus ABSD too) if transfer of XXXXXX, to my son, XXXX absolutely” will attract immovable property is involved. no stamp duty whatsoever, regardless of the value of the property (or how many properties the devisee already owns). 12: Saving of Stamp Duty (cont'd)  13: Right of commencement of legal proceedings Dying with a valid will Dying Intestate Executors have the right to commence legal No one has the right to commence any proceedings in their capacity as the named proceedings. The persons who apply for grant of executors of the deceased testator’s will, even LA also cannot commence any proceedings qua though they may not yet have been issued the administrators of the deceased’s estate until after grant of probate. However, in order to obtain they have extracted the grant of LA. judgment and execute the judgment or order of court, the executor must have extracted the grant of probate. Lee Han Tiong and others v Tay Yok Swee 2 SLR(R) 833 14. Remuneration of the personal representative WITH ALL THE ADVANTAGES, WHY THEN DO SOME PEOPLE CHOOSE NOT TO MAKE A WILL? Some clients do not want to make wills because they cannot make up their minds how their estates should be distributed and they are happy for the ISA to apply to their estate. In light of the advantages of testacy mentioned above, such clients should still be strongly encouraged to make a will so that there is an executor who will carry out their wish that the distribution of the estate is to follow the ISA. In this way, they can enjoy the best of both worlds! Notice Copyright © 2024, Singapore Institute of Legal Education. All rights reserved. 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