Q MY HUSBAND and I share a joint account containing about $70,000.
Only one of our signatures is required if we need to withdraw money from this account - that is, it is a joint-alternate account.
We are also joint owners - that is, joint mortgagors and joint tenants - of a private property worth about $460,000.
Both of our signatures are required if we decide to sell our property. We are servicing a mortgage of about $360,000.
I am the sole person servicing the loan using my CPF money, as my income is higher than my husband's.
Neither my husband nor I have written a will.
If my husband should die suddenly, what would happen to the money in our joint account? What would happen to our property?
Would the Government freeze all the money in the joint account and seize my property as well?
How much of the money in the joint account rightfully belongs to me, and what percentage of the property value belongs to me?
A EACH bank has its own policies and procedures regarding the treatment of joint accounts when one or both joint-account holders die. While the 'rule of survivorship' may allow the bank to ultimately pay to the surviving joint-account holder, frozen account or otherwise, the money in the joint account may be deemed to belong to the estate of the deceased to the extent that he had contributed to the account when he was alive.
If that is the case, the rule of intestacy regarding the money in the account would apply.
That means the money deemed to belong to the deceased will be inherited by family members in proportions spelt out by the law of intestacy.
In addition, the amount deemed to belong to the deceased may be added to the estate for estate duty purpose.
This is important from the children's standpoint. We also cannot assume that the children (if any) do not want their share (which totals 50 per cent) if it can be proven that the deceased did contribute money to the joint account, and did not withdraw that sum from the account.
If the bank does freeze the account, it will only allow deposits into and withdrawals out of the account by the executor or administrator (in the case of intestacy) of the estate of the deceased person, according to the terms of the Grant of Probate by the court or Grant of Letters of Administration given to the executor or administrator.
If the deceased had contributed a portion to the joint account and had subsequently withdrawn a portion, that sum has to be deducted from the amount due to his estate.
It is not quite straightforward in the case of joint accounts.
But if you, the surviving spouse, are able to withdraw the amount, you still have to declare the withdrawal in the estate duty affidavit of your husband when applying for his Letter of Administration in respect of his estate. This is necessary even though there may not be any estate duty liability.
The bank account and property that are held by you and your husband do not come under the will, as a will deals only with what is under an individual's control.
As your residential property is held in joint tenancy (as opposed to tenancy-in-common), you as the survivor will automatically become the property's sole owner.
Irene Yee
Certified Financial Planner
Life Planning Associates
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
