Professional Documents
Culture Documents
NB: The following acronyms: PAA = Probate and Administration Act, EDA = Estate Duty Act, Intestate
Succession Act = ISA, Inheritance (Family Provisions) Act = I(FP)A
OUTLINE
Valuation of Assets
1. Bank accounts
- If fixed deposit, clear how much cash there is – write to banks, CPF board, POSB, asking for letters of
confirmation
In determining the value of such shares one would take the previous day’s1 prices. The method normally used is
the quartering up method. This is set out below:
Or just write to registrar of comp on stock exchange for probate value of shares on partr day in qn
- diff fig – oen set sowing how much buyer offering, another how much seller is asking for seling shares
o buyer’s bid lower than seller’s bid
o shares calc by taking highest bid fr seller and lowest bid to buy made by a prospective 0urchaser
o subtract lower amt fr higher amount – the difference
o divide this by 4
o add to the lowest bid by buyer
o this is the price which esttae duty will take as being the value of that artr share traded on the day
tt the deceased passed away
o if no news ppr copy of the day of the death, then the day AFTER the death (figures are published
the next day)
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i.e. the day before the death of the deceased.
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o or just write to SEX of sg and ask them value of shre in qn traded oin the date of death – fee
payable – abt $20 to get the info
- Restricted membership.
- Need balance sheets and profit and loss accts for at lesast 3 yrs preceding death of shr whose ahares
being valued
One would look at the following factors when determining the value of such shares:
Add (a) – (d) up and divide by the total of issued shares ( not authorised shares). One would normally make
provisions for the immarketability of the shares and would divide such a total by a factor of between 20-25%.
Add
ii) Reserve capital (Part of profits of the company – not yet spent
set aside for future use)( – may be later issued as bonus shares) $20,000
Total: $110,000
The quotient – value per share - is about $2.20. As the shares in private limited companies is not marketable,
discount of abt 15 to 20 or 25 % normally grantd by commr to acct for non marketability oif shares.
existing shareholders have right of pre-emption.
The commissioner may or may not give you a discount (e.g. 20%). But only if you are a minority shareholder. If
20 percent discout given, net value for estae duty prupses wld be 1.76 -
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This method is accetalbe to commr of estate duties. Adopted by most acctants. Knwn as net asset valuation
method.
Two other ways – price earnings ratio/ yield method (how mch comp can make by way of profits)
Note:
- 80 pecent shr and 20 percent shr.
- Maj shr will have higher value for his shares – because can dictate comp policy with mahj shrholding
- Go to item 4 immed – 3 yrs balance sheet of proft and loss acct –commr will then work out value of shares
and amt of estae duty payable
- If z agree with commr’s decision, can appeal by fiing OS in HC – see proced in act itself. Higher deductin
may be allowed
SPECFIC PROBLEMS
1. Insurance policies
s61 Insurance Act states that payment of policy moneys may be made to a proper claimant before grant of
probate.
Payment of life policy and personal accident claims without probate, etc.
61. —
(1) In any case where the policy owner of any life policy or personal accident policy of an insurer dies, and
the policy moneys are payable thereunder on his death, the insurer may make payment to any proper
claimant a prescribed amount of the policy moneys of all such policies issued by the insurer on the
deceased’s life without the production of any probate or letters of administration; and the insurer shall be
discharged from all liability in respect of the amount paid.
…
Prescribed Amount
No definition. To determine prescribed amount, refer to Regulation 28
Depends on how much the policy is worth; but insurer can release up to $150k without grant of
probate.
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Payment of policy claims without probate
28. For the purposes of section 61 of the Act, $150,000 is prescribed as the amount of life and personal
accident policy moneys which may be paid without probate or letters of administration or without having
been included in a schedule or certificate under section 44 (2) of the Estate Duty Act (Cap. 96).
Accident claims (amount paid by way of damages) forms the assets of the deceased.
Widow cannot commence action without grant of representation (collective term for letters of probate and
letters of administration); which cannot be obtained without payment of estate duty.
s30(3) EDA serves as remedy as it allows:
Filing an estate return without mentioning the amount of damages payable.
However have to give details of damages and estimated amount of the claims.
Liability of executor
s30 (3) Where the executor does not know the amount or value of any property which has passed on the
death, he may state in the estate duty return that —
(a) such property exists, but that he does not know the amount or value thereof; and
(b) he undertakes as soon as the amount and value are ascertained, to bring in an account thereof, and
to pay both the duty for which he is or may be liable, and any further duty payable by reason
thereof for which he is or may be liable in respect of the other property mentioned in the return.
Widow can however commence action as the deceased’s personal representative suing as executrix in
testate cases.
Commence action without grant however grant required at the time of hearing. Widow is ∴ able to
postpone payment of estate duties via s30(3) EDA by undertaking to pay the amount once damages are
awarded to obtain grant.
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5. Other assets
6. Miscellaneous issues
Ensure that there is individual requisition of grant of representation.
Also ensure that proper receipt received from beneficiary: that his share has been distributed and that there
are no further claims.
CONFLICT OF LAWS
(2) The distribution of the immovable property of a person deceased shall be regulated by this Act wherever
he may have been domiciled at the time of his death.
What is to be distributed to beneficiaries would depend on the domicile of the deceased: s 4 ISA.
Domicile = nexus of the deceased to a particular country.
A person cannot be a domiciliary to more than one country.
A person’s domiciliary is a question of fact.
In intestate cases, if the deceased was a Singapore domicile, the moveable assets of a deceased will be
distributed according to Singapore law (i.e. the ISA). His immoveable assets outside Singapore will be
distributed according to the law of that country where the immoveable asset is located (i.e. the lex situs).
∴If a foreign domiciliary left immoveable assets in Singapore, they will be distributed in accordance with
Singapore law (predominant).
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Estate duty is payable on all the moveable assets of the deceased, regardless of whether they are
located within Singapore. Will credit be given if estate duty has been paid in the jurisdiction where the
assets are located?
Refer to ss 28(1) & (6) EDA.
If an asset is located in a Commonwealth country, whatever estate duty has been paid in that country is
deducted from the estate duty payable in Singapore for the same asset.
If an asset is located in a non-Commonwealth country, whatever estate duty has been paid in that
country is deducted not from estate duty, but against the gross value of the estate.
Note that although Hong Kong has ceased being a Commonwealth jurisdiction, Hong Kong has been
given the same recognition as a Commonwealth jurisdiction for all deaths which took place after 1st
July 1997: s 46(1)(b) PAA, which enables the Minister to make any declaration as he may choose to as
to privileges + Probate and Administration (Hong Kong Special Administrative of the PRC)
Notification 1999.
2. Realm of Conflict
Eg 1: Landed property in Singapore belonging to Indian domicile. According to Indian Succession laws,
parents have 1/3 right of movable assets. But no similar provision available in Singapore for parents, only
wife and children gets estate.
However, as the Indian had already entered into a contract to sell the property, the equitable doctrine of
conversion kicks in and the property changes from realty to movable property and ∴ the applicable law is
the lex loci which is Indian law and the mother succeeded in claiming 1/3 share.
Eg 2: English man domiciled in England, leaving landed property in Singapore law. Applicable law is the
lex situs. ∴ wife and dependents take equal shares.
s4 ISA applies.
(5) Where any property passing on the death of the deceased is situate in a country to which subsection (1)
does not apply and the Commissioner is satisfied that by reason of such death any duty is payable in that
country in respect of that property, he shall make an allowance of the amount of that duty from the value of
the property.
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After 1/7/1997, Hong Kong ceased to be a Commonwealth country as it became part of China however, HK
still given the same recognition as a Commonwealth country.
S47(1)(b) PAA enabled the minister to make a declaration to make any privileges to any countries. Rf to
Probate and Administration (Hong Kong, Special Administration Region of the People’s Republic of China)
Notification 1999 which accorded HK Commonwealth status.
Notification was backdated to 1/7/1997.
Resealing Of Grants
- assets left behind elsewhere eg HK
- must have proper letters of probate
- same process applies
- grants of letters sent to HK
- no estate duty payable
- probate still to be obtained; can be sent over and resealed
- only applicable to Commonwealth countries. Since 1997 part of china but exemptn still given.
Grant of probate or letters of administration by an overseas country or territory may be re-sealed by the
Supreme Court – NOT in sub courts s47.1 PAA
Effect of re-sealing: grant of probate or letters of administration is likened to that made by the High Court.
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the probate or letters of administration so granted, or a certified copy thereof, sealed with the seal of the court
granting the same, may, on being produced to and a copy thereof deposited in the High Court, be sealed with the
seal of the Supreme Court.
[2/99]
(2) Upon sealing under subsection (1), the probate or letters of administration shall be of the like force and effect,
and have the same operation in Singapore, as if granted by the High Court to the person by whom or on whose
behalf the application for sealing was made.
[2/99]
(3) Before the probate or letters of administration is sealed with the seal of the Supreme Court, the High Court
may require such evidence as it thinks fit as to the domicile of the deceased person.
[2/99]
(4) If it appears that the deceased was not, at the time of his death, domiciled within the jurisdiction of the
court from which the grant was issued, the seal shall not be affixed unless the grant is such as the High
Court would have made.
[2/99]
(5) For the purposes of subsection (1) (b), the Minister may, by notification in the Gazette —
(a) declare any country or territory, which is not a part of the Commonwealth, as a country or territory to which
subsection (1) applies; and
(b) specify the relevant date in respect of that country or territory which may be a date before, on or after 25th
February 1999.
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Usually the main reasons are:
Partial intestacy due to failure to include residual clause
Executor not named/executor pre-deceased the maker of the will.
On failure of executors
13. —(1) Where —
(a) no executor is appointed by a will;
(b) the executor or all the executors appointed by will are legally incapable of acting as such, or have renounced
the right to act as such;
(c) no executor survives the testator;
(d) all the executors die before obtaining probate or before having administered all the estate of the deceased; or
(e) the executors appointed by any will do not appear and extract probate,
letters of administration with the will annexed may be granted to such person or persons as the court considers
the fittest to administer the estate.
(2) A prior right to a grant under subsection (1) shall belong to the following persons in the following order:
(a) a universal or residuary legatee;
(b) a legal personal representative of a deceased universal or residuary legatee;
(c) such person or persons, being beneficiaries under the will, as would have been entitled to a grant of letters of
administration if the deceased had died intestate;
(d) a legatee having a beneficial interest;
(e) a creditor of the deceased.
- Documents to be filed
o Templates for OS and statement – s172
o Certified true copy of will
o Admin oath
o Extract of death cert
o Renunciations
o Cert in form 173 – O71r5(2A)
o Affidabit verying info in statement in form 172
- Application
o Statement filed in form 172a except tt para 4 shld be as set out in form 172(c)
o Note matters fo probate application
o Aditonal pts
S13.2 sets out priorities
If applicant has lesser right then nec to insert para in para 5 of 172b stating tt they have
renounced their right
Priorities undr intestacy have no application in light of s13.2
If all opersons in 13.2 renounce right, then cort may grant letters of admin with will
annexed to persons as court think fittest to administer estate
If died domiciled otherwise than in sg, the persons eitnteld must be determine accoridn to
a-d of O71r25 th0ough note proviso a not applicable
- After application granted
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o S29 to be complied with – admin bond
Unadministered estates – applicants for grants of letters of admin with will annexed
- When nec
o Where al grantees have died before completing admin or grantees died before completing executin
of will
- Grantees of letters of admin with will annexed died
o Ame rules above apply s25.2 PAA
o Para in terms of form 172d included in statement prepared in accordance with forms 172a and
172c
- Grantees of probate died before completing execution
o Can be granted in respect of estate not fully administered
o But s16A CLA – executor of deceasd person who was executor of testator also executor of testator
o Wld seem tt where CLA applies and executor of executor has obtained probate of executris will,
letters of admin with will annexed x be obtained because executor of executor becomes executor
for testator and s13d PAA x apply
o If grant of letters of admin is applied for before executor of executor obt probate the maybe grant
obtainable but if probate subseq granted, chain of executorship not broken so grant of letters of
admin will expire on this contingency
o Therefore no grant of letters of admin wth will annxed may be granted for unadministered estate
o Also not open for executor of executor of testator to obtain fresh probate of testator’s will because
he is not executor appted by a will
Dependents may apply if it is felt that the deceased had not left adequate provisions.
Applies to both testate and intestate cases but does not apply to Muslims.
Procedure: Order 86 ROC – file affidavit in support of an OS.
2. Limitation Period
S4 I(FP)A states that order must be made within 6 months from the date on which representation in regard
to the deceased estate is first taken out.
Exceptions to 6 months limitation period (found in s4(2) I(FP)A): courts may extend the period only when
the period of 6 months would operate unfairly due to these factors:
(a) Discovery of a will involving a substantial change in the disposition of the deceased assets;
(b) Person’s interest in estate not determined at the time representation was first taken out; or
(c) Other circumstances affecting the administration or distribution of estate. .
Sons and daughters include adopted children who are adopted under an Order of Court. Those who are not
formally adopted cannot claim relief.
- How to apply – order 86 rules of court – by way of OS supported by affidavit. Before or after grant issued,
within 6 mths of grant being issued.
- if spills over 6mths, court has discretion to entertain such application.
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- can ask for icreased if show tt need more money eg tertiary edn
- whether WC impliedly qualifies age restrictin in Inheritance Act – yet to be tested
- grant then to be surrended to court pending outcome of application
- then order of ocurt becomes part of grant and clipped tog with grant of letters of repn
(b) If there is a will, prove that what is left in the will is not adequate.
(c) Draws an arbitrary line between spouses and dependents however if need arises, strict requirements of
the ISA can be departed from.
(e) Personal representatives are respondents, other beneficiaries may be joined as plaintiffs if they consent
but if they are indifferent, they are joined as respondents.
(f) Grant lodged with the court must be left at the Registry, cannot be released until court disposes action.
(g) S3 I(FP)A states that you have to examine these factors in consideration for the granting of an order:
Nature of property left behind
Income of dependent
Dependent’s conduct viz a viz the deceased
Why the deceased did not leave adequate provisions in the will. The will would be carefully
scrutinized as sometimes the will would state the reasons for providing the defendant with a
certain amount.
Power for court to order payment out of net estate of deceased for benefit of surviving spouse or child.
S3 –
(5)The court shall have regard to the nature of the property representing the deceased’s net estate;
(6) The court shall have regard to any (division of sections my own)
(i) past, present or future capital or income from any source of the dependant of the deceased to
whom the application relates;
(ii) to the conduct of that dependant in relation to the deceased and otherwise;
(iii) and to any other matter or thing which in the circumstances of the case the court may consider
relevant or material in relation to that dependant, to persons interested in the estate of the
deceased, or otherwise.
(7) The court shall also, on any such application, have regard to the deceased’s reasons, so far as
ascertainable, for ….. refraining from disposing by will of his estate or part of his estate ….. for a dependant,
and the court may accept such evidence of those reasons as it considers sufficient including any statement in
writing signed by the deceased ….. (and) also have regard to all the circumstances from which any inference
can reasonably be drawn as to the accuracy or otherwise of the statement.
(h) In situations of intestacy, ct will not take into account of what had been provided for in the lifetime of
the deceased – Doctrine of Hotchpot does not apply: s9 I(FP)A
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given, paid or settled to or for the advancement of the child by whom or by whose descendant the claim is
made shall be taken into account in estimating such distributive share.
(3) An office copy of every made order under this Act shall be sent to the Registrar for entry and filing, and a
memorandum of the order shall be endorsed on, or permanently annexed to, the probate or letters of
administration under which the estate is being administered
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