This article is useful for you if you wonder what will happen to your assets if you die without making a will, or if someone in your family has passed away without leaving behind a will, and you wonder if you are entitled to an inheritance.
 
When a person dies without a valid Will in Singapore,  the person is said to have died “intestate.” In such a scenario, the Intestate Succession Act sets out how the estate is distributed. The court will decide for you who manages your estate, who gets your assets and in what percentages. Your family members will inherit the assets in the proportions base on the Intestate Succession Act. You will have no say. 
 
Let us now take a look at what will happen if a person dies without a Will:
 
 
1.     Assets are frozen
 
The deceased person’s assets will be frozen because the person is no longer around to deal with the asset. Money cannot be withdrawn from the bank accounts, the properties will not be able to sell, and securities cannot be dealt with. To access the assets, the deceased’s next-of-kin must apply to the court to obtain Letters of Administration.
 
If the deceased had a HDB flat or private property in his/her sole name, or if the deceased had bank accounts in his/her sole name, then the next-of-kin must apply for probate to transfer or sell the property or to take out the monies from the bank.
 
If the deceased had insurance policies – the insurance company would require to see the Grant of Probate or Letters of Administration to know they are paying out to the authorised person.
 
 
2. Next-of-kin must apply for Letters of Administration
 
The deceased’s next-of-kin will have to go to court to obtain a Letter of Administration. The court will grant the Letters of Administration to the applicant, which the court assesses to be the best person to manage the deceased’s estate. This administrator is appointed by the court to manage and distribute the estate of a deceased person. The administrator will be tasked with collating all the assets, pay off all debts, and then distribute the rest of the estate assets to the lawful beneficiaries. You have no say who will be appointed the administrator.
 
This process can be lengthy and costly if many people comes in to apply to be an administrator. This prolong process may have a detrimental effect to the deceased’s family if they need the money for their day-to-day living expenses.
 
3. The Administrator will use the assets to pay off debts
 
The Administrator will gather an accurate list of all the deceased person’s assets and use the assets to pay off the person’s debts, outstanding taxes and loans.  This includes all loans, credit cards bills, utilities, and any on-going payments. When all the outstanding debts is cleared, the balance assets will then be distributed according to the Intestate Succession Act.
 
It is important to take note that many people often neglected the amount of liabilities that needed to be paid off. We have seen many instances that the family may be left with nothing after all the liabilities are cleared.
 
A good way of creating an additional asset meant for the family can be through the effective use of insurance solutions.
 
 
4. Assets are to be distributed to the surviving family members according to the Intestate Succession Act
 
If a person did not leave behind a Will in Singapore, the distribution of the estate assets must be done according to the Intestate Succession Act. The distribution of inheritance includes any bank accounts, securities, real estate, and other assets that the deceased own at the time of death after paying off debts and tax.
How the estate assets will be distributed depends greatly on whether they were single or married or had children.
 
There is a great misconception that the surviving spouse will inherit everything when a person dies without a will.  This is not necessarily true. It is only true if the person dies without surviving parents and has no children.  Once there is a child or parents, the spouse will not get everything but will get 50%.
 
If the deceased pass away leaving behind his/her spouse and children, the deceased’s parents will not be entitled to any of the estate. Is this the best scenario for parents?
 
 
5.  Intestate Succession Act determines how much the beneficiaries inherit
 
The Intestate Succession Act prescribes how the deceased’s estate will be distributed to the survivors if there was no Will.  The administrator of the estate must follow these Rules of inheritance:
 
(i)                If you have only a spouse (but no children, no parents)
Your spouse gets everything.
(ii)             If you have a spouse and children
Your spouse will get half of your assets, and your children will get the other half in equal proportions. Your parents get nothing.
(iii)           If you have only children (but no spouse)
Your children get everything in equal shares.
(iv)            If you have a spouse and parents (but no children)
Your spouse gets half, and your parents get the other half in equal shares
(v)              If you have only parents (but no spouse and no children)
Your parents get everything in equal shares.
(vi)            If you have only brothers and sisters (but no spouse, no children and no parents)
Your brothers and sisters (or children of the deceased brother or sister) get everything in equal shares.
(vii)         If you have only grandparents (but no spouse, children, parents, brothers and sisters or children of deceased brother and sister)
Your grandparents get everything in equal shares.
(viii)       If you only have uncles and aunts (but no spouse, children, parents, brothers and sisters or children of deceased brother and sister and no grandparents)
Your uncles and aunts take everything in equal shares.
(ix)            If you deceased without any family members
The State will get everything.
 
 
How an estate will be distributed when there is a Will
 
When a person dies with a valid Will, the estate is distributed according to the directions in the Will. Family gets the assets faster, which then will have minimal disruption to their finances. Loved ones that you intend to take care and leave behind money to will get their fair share, based on your last wishes.
 
If you add in a testamentary trust to it, it gives you the power to decide how the money is to be distributed, in one lump sum or staggered payment, or to be paid out only on certain milestone or age. This helps you to better protect your loved ones, ensuring that the assets left behind for them will not be splurged or be scammed.
 
 

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