Singapore Wills and Probate Law

This assignment explores key aspects of Singaporean wills and probate law. It covers topics such as proper execution of wills, the impact of marriage and divorce on wills, distribution of assets including CPF funds, and the Probate process itself. Students are tested on their understanding through multiple-choice questions and true/false statements about the legal implications surrounding wills and estate management in Singapore.

MANAGING FINANCE
QUESTION – 1:
WEALTH PRESERVATION – TAX PLANNING
ANSWER – 1 (a)
Inland Revenue Authority of Singapore (IRAS) frames the Rules for Taxation,
commonly compiled under The Income Tax Act (ITA). As per the current rules of the
ITA, a taxpayer’s Annual Taxable Income shall include all of the following earnings:
1. Taxable income includes earnings from Employment, Trade, Rentals and
National Service Allowance.
2. Foreign Sourced Income from all sources and this is regardless of the fact
that it has been remitted / not remitted to Singapore).
3. Incomes earned from internships and attachment.
From the above taxable amounts, the taxpayer can deduct the following tax exempt
income earned from Dividends, Interest Earned on Bank Accounts and Pensions. In
case of Rental Income, all expenses, which are incurred for the purpose of earning the
rental income, shall be allowed as deductions.
VERDICT
Yes, Audrey shall be liable for income tax in Singapore for the rental income, less
the expenses incurred on maintaining the condominium, she earns from her
condominium in Penang.
ANSWER – 1 (b)(i)
Deductions for Employees
A taxpayer, earning a salary income, can claim deduction of amounts which it pays for
expenses related to the employment, including work related entertainment expenses,
travel expense and subscriptions. However, the deductible expenses should be –
1. incurred while carrying out the official duties;
2. not be reimbursed by the employer; and
3. not of capital or private nature, such as travel expenses from home to office.
VERDICT

On these basis, Audrey can claim deduction for entertainment and working clothes
but not for travelling from home to office.
ANSWER – 1 (b)(ii)
Life Insurance Premium Relief is the LOWEST amount among the CPF Contribution
and the 7% of the Sum Assured or the Actual Premium amount paid. In case of Audrey,
the Relief is calculated below.
PARTICULARS POLICY - A POLICY - A
01 Life Insurance Sum Assured $70,000 $100,000
02 Premium Paid $5,800 $4,500
03 CPF Contribution (20% of $7,000 Salary + Bonus PM) $1,400 $1,400
04 CPF Contribution OW Limit $5,000 $5,000
05 Difference (05 – 03) $3,600 $3,600
06 7% of Sum Assured $4,900 $7,000
07 Lowest of 02 and 06 $4,900 $4,500
08 Eligible Relief Amount is the LOWEST of 05 & 07 $3,600 $3,600
ANSWER – 1 (c)
Since Singapore has a population in excess of 25 Lacs, the Tax Liability of Audrey on
the rent free accommodation will be based on the formula –
15% of Salary LESS Rent Contributed by her
Hence the Taxable Value of the Rent Component on Annual basis is
= ($84,000 x 15%) - $4,000 = $12,600 - $4,000 = $8,600
ANSWER – 1 (d)
As per ITA, two types of Child Relief are given – QCR (Qualifying Child Relief) and
HCR (Handicapped Child Relief), provided the child is below 16 years of age old
and/or is pursuing a full-time course in a college, university or nay other educational
institution. The amount of relief is $4,000 per child under QCR and $7,500 per child
under HCR.
VERDICT
Although both her sons are dependent on her, but since Audrey’s younger son is
handicapped and is 14 years old, Audrey will get relief amount of $7,500 for this child.
Her elder son is pursuing a degree course in Australia on a full time basis, but being 18
years of age, Audrey will not be able to claim the QCR amount on his behalf.

QUESTION – 2:
WEALTH PRESERVATION – INSURANCE PLANNING
ANSWER – (a)
Description Non-Forfeiture Value
Surrender Value $449.60
Paid-Up Insurance $179.00
Extended Term Insurance 10 years
ANSWER – (b)
It is a general practice in the insurance sector to provide a grace period of 30 or 31 days
to the insurer in the payment of the premiums with no interest charges. If the policy has
sufficient cash value, and the grace period has lapsed, insurance companies do pay the
overdue amount by advancing a loan against the cash value. This way, Audrey could
have kept her policy in force by paying interest on this loan.
ANSWER – (c)
1. Investment Mandate
The investor can track the performance of the sub-fund via the daily publication of the
unit prices.
2. Assets of Policyholders
Each ILP policyholder can identify his Assets which are held in the form of units.
3. Returns
The returns of an ILP are linked directly to the value of assets held in the sub-funds.
4. No Guaranteed Returns
The value of an ILP varies as it depend on the choice of the sub-fund chosen by the
investor.
5. Cash Value
The investor can withdraw the cash value of the units held, subject to their surrender
charges.
ANSWER – (d)

The insurance company can put a cap on the amount of claim it will allow, hence the
number of claims can also be limited by the insurance company.
QUESTION – 3:
WEALTH DISTRIBUTION – ESTATE PLANNING
ANSWER – (a)
Beneficiary designation -
4
Transferor & Transferee Right of Ownership – 3
Estate transfer Testacy (Testate) - 2 Intestacy (Intestate) - 5
Probate Will Substitute Intestate succession – 1
Match each term given above with the most appropriate description.
Intestate Succession: the term for several methods that transfer a person’s estate at
death outside of probate, because those methods (survivorship, contract, living trust
provision, etc) are recognised as superseding that person’s will and the intestate
succession laws.
Testacy (Testate): the condition that results from a person’s dying after having made
and left a valid will; also used to describe a person who dies and leaves a valid will.
Right of Ownership: the legally enforceable claim of the survivor of a deceased person
to the property of the deceased; a distinguishing characteristic of joint tenancy; a widely
recognised form of will substitute.
Beneficiary Designation: a contractual provision usually used with insurance policies
and CPF, that indicates the person who is entitled to receive the proceeds upon another
person’s death; a widely recognised form of will substitute.
Intestacy (Intestate): the condition that results from a person’s dying without leaving a
valid will; also used to describe a person who dies without leaving a valid will.

ANSWER – (b)
My advice is based on the current testamentary laws in Singapore covered by the Wills
Act of Singapore. The foremost statute of this Act states that while drafting the Will, the
testator should declare at the beginning of the Will the following –
“THIS IS THE LAST WILL AND TESTAMENT of me, XXXX XXXXX (NRIC
No: SXXXXXXXA) of 72 Meerkat Terrace, Singapore 550550”.
The purpose of these lines is to clear the following two ambiguities, which have been
found to be the topmost reasons for contesting a Will document.
1. It clarifies that this is the LAST WILL of the testator. Hence, it automatically
revokes all previous Wills.
2. It clearly establishes the IDENTITY of the testator as the testator states his/her
NAME, ADDRESS and NRIC number.
VERDICT
Audrey is identified as a LEGAL and BONAFIDE RESIDENT of Singapore on the
basis of her NRIC number. Since she is filing her Income Tax Returns using this
ID and the name Audrey, it will become difficult for the beneficiaries to prove the
authenticity of the Will document if she chooses the name “Cheong Fei Fei” in the
Will. However, since some of her assets are owned by her under the name “Cheong
Fei Fei”, she should either get them transferred to her LEGAL NAME of make a
separate testament declaring that such assets be treated as part of her FINAL
WILL.
ANSWER – (c)
1. Valid Execution
It is essential that the Will be recognised by a Singapore Court as a valid and
authenticate Will and the last wishes are executed and not subjected to contest.
Actually, a poorly written Will becomes invalid and is equivalent to NO Will.
2. Marriage

Under the Singapore’s legal system, a Will is revoked when the testator gets married or
remarried. However, the Will cannot be revoked in case of the person’s divorces. This
means that a person’s ex-spouse can claim half of the estate.
3. Properties with Joint Name
Properties under joint names cannot be distributed through a Will as this violates the
Right of Survivorship of the Joint owner. Check the status of ownership of all the real
estates owned by you in Singapore before mentioning them in your Will. In fact, legally
all real estates under a different name or Joint Tenancy cannot be distributed through a
Will.
4. CPFs money
You cannot distribute money held in the CPF through your Will. Instead, nomination of
the CPF should be done for distributing the CPF savings. The CPF money will be
distributed as per the Intestate Succession Act even if declared otherwise in the Will.
On the other hand, if the CPF money has been used for purchasing a house or invested
in shares, the distribution will be as per the Will or according to the Right of
Survivorship and not as per the CPF nomination.
ANSWER – (d)
Place a tick on the “YES” column if the statement is a characteristic of the Probate
process
Description Yes No
01 A means of simplifying and expediting the transfer X
02 Provides a person or persons with the necessary authority to
collect and distribute the deceased’s assets on behalf of the estate X
03 Results in reduced administrative costs and other expenses
associated with an estate
04 Judicial supervision and approval minimises the possibility of
future claims against the estate by heirs and creditors
05 Provides notice of the deceased’s death and estate proceedings to
all interested parties so they may be barred from further challenge
if they fail to respond in a timely fashion
X
06 An orderly procedure for submission and payment of creditor’s
claims that bars claims if not filed within a specified period X
07 Minimise the time required to transfer the deceased’s property to
beneficiaries
08 Provides for administration of the estate without publicity X
09 A means of providing the validity of the deceased’s will
10 Provides systematic administration (inventory, appraisal and
accounting) of the deceased’s estate X