Estate Planning in Singapore: We Ask Lawyers about Wills, HDB Inheritance and More
For most people, property is probably the most significant asset in their life. With many regulations governing properties in Singapore, what exactly happens to our estate when we pass away?
For this guide, we’ve partnered with legacy planning marketplace, Immortalize, to speak to lawyers and experts on the basics of estate planning for your property.
What Happens to Someone's Estate When They Die?
When you die, your property gets passed to someone. But how and who depends on the following:
The manner in which you hold the property.
Are you the sole owner? Or are you holding it with others in the form of joint tenancy or tenancy-in-common?Do you have a will or estate plan?
Whether you are a Muslim
Note: This article only covers non-Muslim estates. We are working on a guide for Muslims and will update the link here once it’s live!
Joint Tenancy Vs Tenancy-in-common: How Does This Affect Estate Distribution?
If your property is held as a joint tenancy with another person or other people, the surviving tenant(s) will take your share. If you are the sole owner or holding the property in the form of tenancy-in-common, your stake in the property gets distributed based on your will or the intestacy law if you don’t have a will.
Read more: Distribution under Intestacy Law in Singapore
Confused? Here is an example from Lee Soo Chye, Partner at Wee Swee Teow LLP to explain the difference:
“Assume A, B and C hold the property as joint tenants. When A dies, B and C will take it automatically as survivors. If they continue to hold as joint tenants, when B dies, C will own the property. This is outside the operation of the will or intestacy law. In this case, we will file a notice of death with the land registry and the title deed will reflect the surviving joint tenants as registered proprietors.
Next, assume A, B and C hold equal shares of the property as tenants in common. When A dies, A’s stake in the property will be distributed based on A’s will or in the absence of a will, based on intestacy laws. B and C do not automatically take over A’s share of the property.”
How to Distribute Property under a Will or Intestacy Law
If you own the property in your name or hold it as tenants in common, your family will need to go through the following procedures before the property can be distributed:
Obtain grant of probate or grant of letters of administration.
Transfer the title from the deceased name to a personal representative via a process called transmission.
The executor or administrator to sell flat and distribute the proceeds to beneficiaries or transfer property to beneficiaries.
Grant of Probate and Grant of Letters of Administration
After someone passes away, the family first needs to get a grant of probate (if the deceased has a will) or grant of letters of administration (if the deceased doesn’t have a will) before one’s property can be distributed. While you can get the legal document yourself, most people engage a lawyer to get the grant.
Read more: All About Probate & Administration (Singapore Edition)
The probate process can be very simple, but it can also be very complicated. Some probate cases can involve a lot of investigative work, according to Chio Su-Mei, senior legal associate at Ong Swee Keng LLC.
“We’ve handled cases where the family did not know what the deceased had and so we had to write to many financial institutions, just to find out where the deceased held assets,” Chio said. “The limitation of a property search is that we need to know the address of the property. We cannot search against the name of the owner of the property.”
Vulnerable Beneficiaries
When it comes to minor beneficiaries or beneficiaries who are mentally incapacitated, there are additional legal processes that the law demands because these are vulnerable persons. An example would be the need for an administration bond and/or sureties (i.e., guarantors).
“For how much the deceased’s estate is worth, the administrator and the co-administrator have to sign an administration bond to guarantee that they will distribute the assets correctly and appropriately," Chio explains. “For cases involving minor beneficiaries, the administrator and co-administrator have to find sureties who are willing to put up guarantees for the extent of estate. So, we usually have to apply for a dispensation of sureties, and there’s an additional application process as well.”
After getting the grant, the executor (person appointed in a will to execute the deceased wishes) or the administrator (representative appointed by the Court to administer the estate when there’s no will) can start the transmission.
What is Transmission?
When you try to sell or transfer the title of a house, there are documents to sign, and the documents will require the registered proprietor’s signature. If the registered proprietor is now deceased and therefore cannot sign, you have to transfer the title to a personal representative through a process called transmission.
Under transmission, the title of the property will be transmitted from the deceased to the administrator or executor in a fiduciary capacity, according to Lim Kim Song, lawyer at Song Ling & Partners.
“A lot of property agents encounter this type of problem. When they do a title search on the property, it is still in the deceased’s name,” Lim said. “You cannot issue an Option to Purchase as the deceased isn’t around to sign the Option to Purchase. You also cannot transfer the title to the buyer because the deceased isn’t around to sign the transfer.”
“As the lawyer acting for the buyer, I always end up objecting to the title document as the property is still in the deceased’s name,” Lim added. “On completion day, if they cannot give my client (the purchaser) a good title, my client can charge late completion interest. I had a case where my client got late completion interest of about $3,000 (late completion for 30 days at $100 per day).”
Matters Specific to HDB Flat Inheritance
Most Singaporeans own an HDB flat and as a subsidized public housing, HDB flats have more restrictions compared to a private property. In this section, we look at issues pertaining to HDB when it comes to inheritance.
HDB Vesting
For HDB flats, there are some additional rules which dictate when the probate and distribution processes have to be done.
According to Lim Kim Song from Song Ling & Partners, under the Housing and Development Act, the HDB flat may be vested in the HDB if:
Grant of Probate/Letters of Administration is not taken out within 12 months from the death of the sole HDB lessee or HDB tenant-in-common;
the personal representatives do not apply for a transmission of the HDB flat within 6 months from the date of representation.
“Of course, the Housing and Development Act states the HDB can and has the right to vest that flat. In practice, we do not know if they will vest,” Lim added. “There haven’t been such cases before.”
Additionally, HDB also has a regulation that within one year after transmission, the executor/administrator needs to sell the flat or transfer it to the beneficiary, according to Chen Yiyang, associate at Tan Kim Seng & Partners.
“When I draw up a will with a client, I will always include a power of sale clause to allow the executor or trustee to sell the flat at their own discretion and within a reasonable timeframe, but also highlight HDB’s regulation if the testator owns an HDB flat,” Chen added.
Foreigners and HDB Flats
Foreigners are not allowed to own HDB flats and thus, won’t be able to inherit and have to sell the HDB flat.
“I have encountered a situation where the will says that the HDB flat is to be devised to a foreigner. Unfortunately, the will did not give any power of sale to the executor to sell the HDB flat,” Lim Kim Song from Song Ling & Partners said. “As an executor is also a trustee, he will have to apply to the court under the Trustee Act for a court order to authorise him to sell the trust property.”
If you go to the High court to get the order of court to authorise the sale, the cost could be around $10,000, according to Lim.
HDB Studio Flats
Studio flats are a type of HDB flat that caters generally to elderly.
When handling studio flats, it can become complicated as studio flats can’t be sold on the open market like a regular HDB flat and they have to be surrendered to HDB, according to Wilson Foo, Senior Associate at Trident Law Corporation.
“HDB will pay their predetermined compensation to the executor, but they will first need statutory declarations from all the beneficiaries to say that they have no objections to that,” Foo says. “If not, HDB will pay the money to court and once it gets paid to court, it’s harder to get it out as it requires more administrative work. In fact, it will eat a big chunk of value out of the studio flat because the compensation value is not very high.”
People may not agree to provide such statutory declarations in situations where they are challenging the content of the will, saying that the will is invalid or maybe the will was forged, Foo added.
More FAQs Related to Property Inheritance
What Happens to Your Property When You Die?
This depends on several factors, including whether you're a sole owner, joint tenant, or tenant in common. Whether you have a will or are a Muslim will also matter.
What is Intestacy Law?
The intestacy law is how your estate will be distributed if you don't have a will.
What is Transmission in Estate Planning?
When a registered proprietor has passed away and cannot sign the documents, transmission is the process of transferring the title of the property to personal representative(s).
Can a Foreigner Inherit an HDB Flat?
No, foreigners are not allowed to own HDB flats and thus cannot inherit one either. If an HDB flat is willed to a foreigner, they must sell it.
Have burning questions around estate planning, inheritance tax, and matters related to property and the law? Simply #AskGuru!
View this post on Instagram
For more property news, resources and useful content like this article, check out PropertyGuru’s guides section.
Are you looking for a new home? Head to PropertyGuru to browse the top properties for sale or rent in Singapore.
Already found a new home? Let PropertyGuru Finance's home finance advisors help you with financing it.
This guide was written in collaboration with Immortalize, a legacy planning marketplace where you can find out more and compare lawyers and their rates and services.
