Intestate Succession Act
The Intestate Succession Act, as stated in the Singapore Statues Online (SSO) is:
An Act to make provision for the distribution of intestate estates.
What does that mean? Let us break down the terms and rephrase the sentence.
As stated above, Singapore has a law that governs how all owned assets are to be distributed, after a person has passed away.
“You mean government also want to control who the money goes to even after we die?”
No, not really. the catch is that this act only triggers when somebody passes away without a will(or in legal terms, “dying intestate). That means that this law is meant to be used as a last resort, when no preparations have been made in advance before a Singaporean passes away.
What does it do?
The Intestate Succession Act distributes assets in a procedural way, giving priority to the closest family members first. It is a set of 9 rules, expanding across the family tree until there is a valid surviving relative(to a certain point). In a nutshell, distribution starts from the spouse and traces out the family tree with the following priority:
– Spouse
– Children
– Parents
– Siblings
– Grandparents
– Uncles & Aunties
Along with the order of distribution, the law also dictates the proportion of the assets that are to be distributed to each person.
Representation
The Intestate Succession Act also allows for a representative to retrieve the assets on behalf of the recipient should they be unable to represent themselves. This can be due to mental or physical disabilities, or the fact that the intended recipient has passed on. Only the children or the descendant of the recipient, are allowed to act as representatives.
This ensures that involved parties will be able to be properly represented should they be unable to themselves.
Should all these options be exhausted, and no valid relative or representative of the relative be found, the state will repossess all assets.
Why do we need this?
The Intestate Succession Act is really meant to be a catch-all to protect families from potential disputes and to ensure all assets left behind upon death is accounted for. This also ensures that there is a fair representation on all estate and that no deadlock or under-cutting will arise. For example, there has to be a person representing to check and sign-off on the selling of a HDB flat, to ensure that it is not sold at a less than desired rate.
So with all these in mind, lets have a look into the various rules stated in the Intestate Succession Act. The rules may be broken down into 2 circles, the first circle being the closer, family unit, and the second being other next of kin. The family unit will always have priority over other next of kin, and the estate will be entitled to them as long as there is at least one surviving party.
The Family Unit
When we ask about a family unit from the perspective of a child, the answer is likely to be “Parents, Grandparents and Siblings”. The first 5 rules in the Intestate Succession Act is reserved for this family unit, with the deceased being the parent.
The summary of the rules is as follows:
- 50% goes to the spouse, and 50% to the children.
- Should the deceased have no children, the 50% goes to the parents
- If the spouse is no longer around, the 50% of the estate that the spouse is entitled to will be distributed the same way i.e. it goes to the children, and if there are no children, to the parents.
- If there are no parents and children, and only a surviving spouse, the spouse shall receive the whole estate.
For all distribution, if a particular party involves more than 1 person(i.e. 2 parents, multiple children or even multiple wives), the estate is to be split evenly between all involved people.
- For example, if a husband leaves behind a wife and 2 parents, the wife gets 50%, while each parent gets 25%.
The way the law is structured is for the estate to be distributed with the rights and protection of the spouse and children as priority. In our competitive world today, both parents have to work to sustain loans and care for a family, the passing of one parent will place a significant burden on the other. Thus it only makes sense that the spouse, children and parents are the first ones entitled to anything that is left behind by the deceased.
Usually a suitable party would have been found at this step, but there are always edge cases and laws are usually written to cover all corners.
So, what if the deceased has no spouse, children or parents?
Other Next-of-Kin
The next set of rules of the Intestate Succession Act will be used when the deceased has no surviving spouse, children, parents, or people to represent these parties.
Rules 6, 7 and 8 of the Act covers the other next-of-kin that are entitled to the estate should the first 5 not be met. They are distributed evenly among all involved persons in the party, and are given in order of priority as written below:
- 1. Siblings
- 2. Grandparents
- 3. Uncles & Aunties
Once again, the law makes judgements to distribute in terms of familial ties and potential needs. The difference distribution within the family unit and among the other next of kin would be that 100% of the estate goes to the first valid party.
For example:
- Should the deceased have no surviving parent, spouse and children, but have a surviving brother, a sister that has passed on, 2 grandparents and multiple uncles & aunties, the brother and sister is entitled to 100% of the estate split equally (50-50).
- If the deceased sister does not have any descendants to represent her, 100% of the estate will be entrusted to the brother.
The distribution at this step is more sweeping as there are less considerations to be made in terms of financial need(hence the lack of detailed splitting like the above) and it weighs more on closeness in terms of familial ties.
All relatives mentioned above(or any eligible representative of the relative) are the ones who can be eligible for a portion of the assets of their deceased family member.
The State
Should all the above rules fail to be met, the final, catch all rule that is in the Act is rule 9:
In default of distribution under rules 1 to 8, the Government shall be entitled to the whole of the estate.
This means that should there be no valid candidate that can be found to claim the estate of the deceased, the Government will claim it and decide on what is to be done with it.
Why must the state step in?
The state will only receive the estate should there be no valid person to represent. As explained earlier, this is to ensure proper representation as well as to release any funds locked away in banks and safe deposits for use by the state. It also acts as a representative to sell any stocks and shares held by the deceased, to ensure that all procedures are conducted properly(companies require somebody to legally represent the deceased when it comes to buying over shareholdings. They are unable to reclaim the shares should the state not step in to deal with it.)
This way the state may efficiently reclaim and reuse these funds instead of having it stashed away for no purpose in a bank.
Customise your distribution methods
The Intestate Succession Act covers quite completely the very basic areas of concern when it comes to estate distribution. There are however, certain circumstances where people may not want to follow the flow of the Act, or have their own plans in terms of distribution portions. This is where writing a will comes in handy.
Perks of writing a will
There are those who have stated in their wills that the estate be liquidated and donated to charity, and those with complex family situations who would like to distribute the portions with more scrutiny. You may customise in great detail the way you want your will to be written, be it a simple one involving only your intimate family members, or an elaborate one that includes friends, family and community.
Having a will also allows families to expedite the distribution process, skipping lengthy court procedures that comes with triggering the Intestate Succession Act. The court proceedings are called the letters of administration and are definitely more costly and takes a longer time compared to having a will and submitting it to the courts for distribution.
While we might not be able to control when or how we die, we can still be in control of the events that happens after. Write a will, pass down instructions to your loved ones. Let them know how you want things to be when you pass and have it in writing so that it is clear and assured.
In Summary
The Intestate Succession Act is a law that seems confusing at first, but applies very sensible rules to ensure that the estate is claimed by the most suitable candidate. This is why there is a much larger focus in distribution to the family unit before anyone else. This however is still a very generalised rule and most of us will definitely want to put in more detail and thought in how we want our estate to be distributed.
