Estate planning is necessary, and especially important if you have children to whom you would like to leave your property. Here are some essential tips you must know if you are planning to do so.
1. What happens without a will?
If you have not drawn up a will, any property you own will come under the Intestate Succession Act after your demise. This means the property or any proceeds from its sale — after the relevant legal and administrative fees have been deducted — will go to your child. If you have more than one child, the property or profits made from its sale will be distributed amongst your children.
However, if you have a surviving spouse, he / she will be entitled half of your property or any proceeds from its sale after your death; the other half will go to your child / children. If you have more than one child, their half of the property or profits from its sale is to be equally distributed amongst them. You can find the details of the Intestate Succession Act online (bit.ly/1CqGPFy).
2. Tenancy: joint versus common
If you intend to will your home to your children, bear in mind that you cannot do so if you and your spouse own the property under a joint tenancy. However, you can do so under a tenancy in common. But what are the differences between the two types of tenancies?
A joint tenancy means you and your spouse have equal ownership of your home. If one of you dies, the surviving spouse will assume full ownership. A tenancy in common, on the other hand, allows for more flexibility. Ownership need not be split 50-50, and you can will your house to your children. In the event that you did not leave a will, the house will be subject to the aforementioned intestacy laws.
3. Too late to change?
If you and your spouse currently have joint tenancy of your home, you can still change it to a tenancy in common via severance. You would have to pay about $1,000 for legal fees and other costs, but this amount varies according to who is involved: the HDB, your bank, and / or the CPF Board.
The original title deed for your house is also required. If you have misplaced it, you and your spouse will need to sign official documents declaring it missing. You and your spouse will then need to sign a severance form at the lawyer’s office to change your tenancy from joint to common. The whole process will take about three to four weeks.
Note that these rules and regulations may not apply to Muslim homeowners, who are subject to different laws.
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This article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now! | ||