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Q MY OLDER sister, a widow, died in May. I did not know that she had appointed my youngest brother as sole executor and trustee, and had made him a beneficiary.

My younger sister and I are also named as her beneficiaries.

My youngest brother, being a lawyer, intended to use his law firm (a one-man firm) to apply for the Grant of Probate, but I objected to it.

Then he said he would get another law firm to do it. It has been almost two weeks now and there has been no update from him on this matter.

In the past, he had borrowed a huge sum of money from two of my older brothers and from my late sister to set up his law firm.

He has not returned any of the money. He is also in debt with a government body.

I have made inquiries with two banks, XYZ and ABC, which my late sister has accounts with.

XYZ told me it would give the allocated share of money directly to the three beneficiaries.

But ABC said it would follow the instructions of the one who has the Grant of Probate.

I am worried that once my youngest brother gets the bulk of this money from ABC, there is a chance that he might not release my share to me.

Is there any way that I could apply to the court to seek an order requiring the bank to release the money directly to the three beneficiaries after the deduction of my sister’s funeral and hospitalisation charges?

Can my late sister’s flat be transferred to my youngest brother who is the sole executor?

If he were to sell it and all sales proceeds go directly to him, there is a chance that he might not give us our share of the money. Where can I get help to stop him before such situations happen?

A I NOTE your strong sentiments about the appointment of your youngest brother by your late sister as the sole executor and trustee of her will.

You must accept the fact that so long as the will is valid, having satisfied all the necessary requirements of the Wills Act, you would be hard put to challenge his appointment.

It is for this reason that it is sometimes said that a will allows the deceased to rule from the grave.

Notwithstanding your allegation that your youngest brother had borrowed a huge sum from your late sister that has not been repaid, your late sister was obviously quite comfortable and happy to appoint him as the sole executor and trustee of her will.

The choice of such an executor and trustee must be taken as proof of the trust and confidence reposed by your late sister in him.

There are no special qualifications required for someone to be appointed except that he must be above 21 years of age (so that he could hold immovable property) and must not be a bankrupt.

The executor and trustee wears two hats in the administration of the estate.

Strictly speaking, he wears the hat of an executor for the purposes of gathering all the assets of the estate and for carrying out all the duties and tasks prior to the distribution.

He wears the hat of a trustee in the distribution of the estate among all the beneficiaries.

Although there is a thin line between these two roles and functions, it is settled law that even in carrying out his duties as an executor, he is regarded as a trustee.

In short, he has certain fiduciary duties to act in the utmost good faith and with a clear conscience.

All the monies standing to the credit of your late sister will be released to your youngest brother on production of the Grant of Probate.

With the exception of the CPF monies that are paid directly to the beneficiaries named in the prescribed nomination form, banks do not normally release monies to beneficiaries directly.

It would be most prudent for him to open an estate account into which all the monies of the estate could be deposited.

Such an account serves as a single transaction point for the deposit and withdrawals of monies.

It also makes for an easier paper trail.

Again, for prudence, your brother may wish to give you all copies of the bank statements so that you are kept informed of all transactions in the estate account.

Likewise, for the purposes of selling your late sister’s flat, it would be transferred in name to your youngest brother and he would then be the one with the legal capacity to sell it and to convey a good title to the buyer.

If you are afraid that you may not get your share, in view of the fact that your brother is a trustee, you would be able to hold him accountable.

If he fails to carry out his duties of distribution according to the terms of the will, he may be liable for a criminal breach of trust if, for example, you are able to show an element of fraud, or he may also be liable for a civil breach of trust, in the absence of fraud.

You could go to the authorities or start an action against him in court.

It is only in very rare and specific instances that someone else whom the court considers the fittest to administer an estate may be appointed a trustee. Examples of such instances include the following: If no executor is appointed in the will who is legally capable of acting, such as being of unsound mind or someone below 21 years of age; The executor has renounced his right to act; There is no live executor; The executor dies before obtaining probate or the executor appointed in the will has not applied for probate.

It would appear that it is best that all of you in the family try to resolve your differences so that whatever your late sister has left to all of you could be distributed with the maximum of fairness and minimum of distress, bitterness and humiliation.

Amolat SinghLawyerAmolat & Partners

Source : Sunday Times - 16 Jul 2006

Q MY LATE mother, who died in 2004, was the owner of an HDB flat. She left behind two daughters and three sons.

After my father died many years ago, my mother lived in the HDB flat with her eldest son, his wife and three children.

All the rest of my siblings are married and we live on our own. My mother sold her HDB flat in 1998 and deposited the proceeds of the sale into a joint account which she held with my eldest brother.

By then, my eldest brother had bought his own HDB flat and my mother moved in with him and his family. When she died, she left no will.

My siblings and I are still awaiting our inheritance. We recently found out that my eldest brother and his wife have no intention to release our shares.

The joint account he had with my late mother now has a zero balance.

The bank book revealed that he had withdrawn $1,000 every day for many months. Now he insists all the money has been spent.

My siblings and I suspect the money has been moved into his own personal account.

Is there any way we can recover our rightful share of the inheritance? What legal action can we take against him?

A The asset owned by your mother as at the date of her death would be the monies in the joint account that she held with your eldest brother and not the HDB flat, as this had already been sold prior to her death.

As your mother had not left a will and your father had already died before your mother, your mother’s assets will be divided equally between you and your four siblings. You would each be entitled to a 20 per cent share of all her assets that she held in her own name, be it the proceeds in bank accounts or property.

Unfortunately, this is not the situation when it comes to a joint bank account.

There is a presumption in law that the proceeds in a joint bank account are considered to be property which is owned jointly between the two account holders.

This means that when one joint account holder passes away, the surviving joint account holder is entitled to all the funds in the joint account. This is known as the ‘principle of survivorship’.

Having said that, you should be aware it is possible to rebut this presumption if you and your siblings can provide evidence that it was not your mother’s intention that the monies in the joint account held with your eldest brother be considered joint property.

If, for example, all the funds in the joint account were provided by your mother and your eldest brother did not make any deposits into the joint account, it would be possible to argue that the presumption should be rebutted, and your eldest brother should not be entitled to the balance proceeds in the joint account by virtue of the principle of survivorship.

It may also be possible to rebut the presumption if there is evidence to suggest that your mother wanted to add your eldest brother’s name to the joint account only as a matter of convenience and she had always intended that the monies in the account were for her personal use to the exclusion of your eldest brother.

The cornerstone to successfully rebutting the presumption that the proceeds in the joint account are joint property and preventing the application of the principle of survivorship would be:

The intention of your mother when she opened the joint account with your eldest brother, and

Her intention when she deposited the sale proceeds of the HDB flat into the joint account.

Whether you are successful would largely be determined by the factual matrix of the case.

The court would consider factors such as the amounts contributed to the account by your mother and your eldest brother, as well as the reasons given for opening a joint as opposed to sole account.

Assuming negotiations with your eldest brother fail, in order for you to proceed, you and your affected siblings should decide who among you wants to be the administrator of your late mother’s estate and start proceedings in court to be appointed to that position.

The administrator could then begin legal action against your eldest brother to recover the sums belonging to your mother in the joint account, in order to distribute the monies to all your siblings equally.

If costs are a concern, you may wish to consider approaching the Legal Aid Bureau.

Navin Joseph LoboLegal Associate Harry Elias Partnership

Source : Sunday Times - 9 Jul 2006

THE operator of a Clarke Quay restaurant will have to foot the entire $500,000 bill for a fire that damaged a neighbouring office after he lost a court fight to get the building’s owner to split the costs.

In a landmark judgment issued last week, the Court of Appeal overturned a High Court ruling that liability for damage caused by the fire - caused by an uncleaned exhaust duct in the kitchen - should be shared by Hong Kong Seafood Place Restaurant and landlord Clarke Quay Pte Ltd.

The November 2002 blaze was started by an unattended wok of oil.  The fire was put out before firemen arrived but, unknown to staff, the heat ignited oil and grease that had built up in the exhaust duct.

The fire built up in a part of the duct hidden from view and spread up to the third floor, eventually reaching the chimney on the roof. It burned wooden louvres at the top of the chimney and the flaming debris fell through a skylight and into the offices of advertising agency Saatchi & Saatchi, causing damage to its property.

The Appeal Court ruled that the duct was not part of the building’s common areas like stairways, lifts and carparks, which are normally expected to be maintained and kept clean by the building owners.

The fire started because the restaurant failed to keep the duct clean, it said. The restaurant owner, Mr Tan Hun Ling, cannot expect the building owner to share the cost of repairing damage caused by its own staff’s neglect.

Source : Straits Times - 5 July 2006

Q I AM a permanent resident filing for a divorce from my wife. We are both Malaysians.

We bought an HDB flat in Jurong six years ago. I had paid $4,000 cash as down payment and have been servicing the loan with my CPF savings. The outstanding loan is $70,000.

Do I have to sell the flat after our divorce?

If yes, I understand all the CPF money used for servicing the mortgage has to be returned to my account. Do I need to split the money with my wife?

Is there a fixed period after which I can buy another flat with a new partner?

My monthly basic pay is $1,300. How much would I be expected to pay in maintenance? We have a five-year-old daughter.

Would it be based on my gross salary, including overtime, or just the basic income?

Besides the flat, we have some savings which were kept under separate names - 70 per cent under hers. Would I still need to pay her maintenance using my 30 per cent holding?

A After the Family Court grants a divorce, it decides on marital issues such as maintenance for the former wife and children, division of the matrimonial home and other assets. These are referred to as ancillary matters.

The HDB flat you both own is a matrimonial home. You can either sell it, transfer your share in it to your wife or vice versa.

If you transfer your interest in the home to your wife, the CPF Board requires your wife to reimburse into your CPF account all your CPF monies (including interest) that was used for the purchase of the home and for the servicing of the loan.

There is unlikely to be a substantial profit from the sale of matrimonial homes by divorced couples in the current economic climate.

Once the matrimonial home is sold, any loan outstanding and all levies due to the HDB must be first settled. The balance is then used to reimburse both of your CPF accounts.

Sometimes, there may be insufficient sale proceeds to carry out the reimbursement into your respective CPF accounts.

It is likely that your wife will want you to share with her the net profits from the sale.

You can agree with her on how the proceeds are to be distributed.

In some cases, the former wife may wish to receive the full net sale proceeds towards her claims for maintenance and division of matrimonial assets. Or both spouses can agree on the distribution of the profits.

If your wife agrees to transfer her share in the matrimonial home to you, HDB regulations require you to form a family nucleus in order to own the property.

This could mean that you and your new partner can become co-owners of the flat.

If the flat is sold, you need to consult with the HDB on the purchase of a second flat for you to live in.

On the issue of maintenance for your daughter, both your wife and you have a duty to maintain her.

The court will take into account these factors when assessing the amount of maintenance:

Your income (your basic salary, commission and overtime pay) and your earning capacity;

Your other financial resources;

Both your financial needs, obligations and responsibilities;

The standard of living enjoyed by all three of you before the marriage broke down;

The length of the marriage and both your ages;

Any form of physical or mental disability both of you may suffer from; and

Contributions made by both of you to the welfare of the family, including looking after the family or caring for the family.

You have a duty to maintain your former wife. The Court will consider the above factors, including her income and financial resources when deciding on the amount of maintenance you must pay.

You can pay monthly maintenance or a lump sum. It seems that both of you have divided some monies between yourselves. The money you hold is yours. But your wife may wish to treat it as a matrimonial asset and request that it be dealt with by the court.

If this happens, both of you may want to share your money in any proportion or you can let her keep all of your money as a lump sum maintenance.

I’d advise you both to reach an amicable settlement on the ancillary matters with the assistance of your lawyers, or use the Family Court’s mediation scheme, which is available to all divorce litigants.

Rajan ChettiarRajan Chettiar & CoAdvocates & Solicitors

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 2 Jul 2006

Q A WOMAN is the owner of an HDB flat and has two daughters, A and B. The father has died.

The daughters are grown up but are unmarried. The two of them invested jointly in a private property.

A is living in the private property while B lives in the HDB flat with her mother.

When the mother dies, what will happen to the HDB flat?

It still has an outstanding loan, and B is financing it.

The mother and daughters intend to have B take over the HDB flat (and B is likely to remain unmarried), and continue to finance it.

Is this going to be an automatic transfer?

Is there something that the mother must do to ensure this, such as by writing a will? What happens if she does not?

Or should the mother transfer, say, 10 per cent of the ownership to B first to ensure there is no problem?

A Whether or not the HDB flat can be transferred to B after her mother’s death will depend on the eligibility criteria under HDB rules and policy at the time. This is so whether or not the mother leaves the flat to B in her will.

As well as HDB rules, B will have to take steps to deal with any outstanding loan before the flat can be transferred to her.

If the mother leaves the HDB flat to B in her will, then B will be entitled to at least the net proceeds of the sale if she is not eligible for the flat to be transferred to her.

Partial ownership of private property is not an absolute bar to the flat being transferred to B - the HDB may consider granting an exemption in exceptional cases, including acquisition of the HDB flat by inheritance or by gift.

If the mother dies without making a will, then A would be legally entitled to a half-share of her estate, which would consist of all her assets, including her flat.

But A could give up all or part of her entitlement to B at that time if she wants to.

The fact that B is paying or contributing to the mortgage does not give her any legal rights to the HDB flat.

In many cases where the owner dies, the flat has to be sold, any outstanding loan repaid and the net proceeds of sale distributed to the beneficiaries - in this case, A and B.

The fact that A presently agrees or intends that B should take over the flat after their mother’s death is not much help if A later changes her mind and if the mother has not made a will leaving the HDB flat to B.

There is no automatic transfer of an HDB flat or any other real estate. Additional conveyancing steps must always be taken.

If the mother’s intention is for B to have the flat - or the proceeds of the sale - after her death, she should certainly make a will to express her wishes.

If she transfers 10 per cent of the ownership to B before her death, then B would be the owner of that 10 per cent share and only the mother’s 90 per cent share of the flat would be included in her estate with all her other assets.

There may be stamp duty to pay on the transfer of the 10 per cent share and possibly also additional estate duty after the mother’s death.

The mother might consider instead transferring the HDB flat to herself and B as joint tenants, in which case, as long as B outlives her, the flat ought to become the sole property of B on her death and can be transferred to B’s sole name by lodging a notice of death.

However, there are the costs to consider of transferring the flat to joint ownership, including any stamp duty which may be payable at the time of the transfer and, again, possibly a larger bill for estate duty after the mother’s death.

The potential estate duty problem does not arise if the HDB flat is simply left to B by will. This is because there is an exemption from estate duty of $9 million for inherited residential property; but the exemption is not available for gifts of residential property before death.

Simon Trevethick Associate Colin Ng & Partners

Source : Sunday Times - 25 Jun 2006