What happens to your assets if you die without a will?
This article is useful if you wonder what will happen to your assets if you die without making a will.
This article is also relevant if you wish to know if you are entitled to an inheritance if someone in your family passed away without leaving behind a will.
Before we go into the details of the law, here is a simple summary: If you had made a will, the person you had appointed as your executor must distribute your assets in accordance with the terms of your will. However, if you die without making a will, the Intestate Succession Act will apply to decide who manages the estate, who gets the assets, and in what percentage. This means that you have no say in who gets your assets.
How are your assets distributed after death?
How your assets or estate are distributed depends on whether or not you left behind a valid Will. A Will is a legal document that contains your instructions on who will inherit your assets.
How an estate is distributed – Where there is a Will
When a person dies with a valid Will, the estate is distributed according to the directions in the Will.
If there is a valid will, there will be a person named as an executor in the will. The executor will have to apply for a Grant of Probate. Once he has obtained the Grant of Probate, the executor collects all the deceased’s assets from banks and financial institutions, pays off the deceased debts and taxes, and finally, he distributes the deceased’s assets to the beneficaries according to the will.
How an estate is distributed – Without a will
When a person dies without a valid Will in Singapore, the person is said to have died “intestate.”
In such an event, the Intestate Succession Act sets out how the estate is distributed. The deceased’s family members will inherit the assets in the proportions prescribed in the Intestate Succession Act.
Sometimes, the person may have made a Will, but the Will was not done properly, and the court has declared it invalid. In such a scenario, the assets will also fall into intestacy.
Thus, if you died without making a Will in Singapore, what happens to your assets is that the state decides for you – who manages your estate, who gets your assets and in what percentages. This is done through the Intestate Succession Act. You will have no say.
This is why we advise all our clients to make a Will so they have a say in who should manage their estate and who will get their assets when they pass away.
Five things will happen to the assets if a person dies without a Will
1. Firstly, the assets are frozen
The deceased person’s assets will naturally be frozen because the person is no longer around to deal with the asset. So, money cannot be taken out from the bank accounts, the properties cannot be sold, and securities cannot be dealt with. To access the person’s assets, the person’s next-of-kin must apply to the court to obtain Letters of Administration.
The probate lawyers at PKWA Law frequently encounter the following common situations where assets are frozen, and the next of kin require a Grant of Probate (if there was a Will) or Letters of Administration (if there was no Will):
- If the deceased had a HDB flat or private property in the sole name – the next-of-kin must apply for probate to transfer or sell the property.
- If the deceased had bank accounts in the sole name – the next-of-kin must apply for probate to take out the monies.
- If the deceased had insurance policies – the insurance company would require to see the Grant of Probate or Letters of Administration to know they are paying out to the authorised person.
- If the deceased had shares or a car, proof of probate is required to sell or transfer the shares or car.
2. Second, to unfreeze the assets, the next-of-kin must apply for Letters of Administration
The deceased’s closest next of kin (usually the spouse or eldest child) should appoint a specialist probate lawyer to obtain a Grant of Letters of Administration. This is a court order that appoints the next of kin as the personal administrator of the estate. The personal administrator is tasked with collecting all the assets, paying off debts, and distributing the rest of the estate assets to the lawful beneficiaries.
According to the Intestate Succession Act, the administrator is appointed by the court to manage and distribute the estate of a deceased person.
According to the Intestate Succession Act, the following people are entitled to apply for the Letters of Administration, in order of priority:
- brothers and sisters
- nephews and nieces
- uncles and aunts
Based on the order of priority, if the children of the deceased wish to be administrator(s), the deceased’s surviving spouse should renounce their right to apply for Letters of Administration.
The court will grant the Letters of Administration to the applicant, which the court assesses to be the best person to manage the deceased’s estate.
3. Third, the Administrator will use the assets to pay off debts
The Administrator will gather an accurate list of all the deceased person’s assets and use the assets to pay off the person’s debts, outstanding taxes and loans. This includes all bank loans, credit cards, utilities, and subscriptions.
4. Fourth, the assets will be distributed to the surviving family members according to the Intestate Succession Act
If the person did not leave behind a Will in Singapore, the distribution of the estate assets must be done according to the Intestate Succession Act. The distribution of inheritance includes any bank accounts, securities, real estate, and other assets that the deceased own at the time of death after paying off debts and tax.
If the person dies without a Will in Singapore, how the estate assets will be divided depends greatly on whether they were single or married or had children.
There is a great misconception that the surviving spouse will inherit everything when a person dies without a will. This is not necessarily true. It is only true if the person dies without surviving parents and has no children. Once there is a child or parents, the spouse will not get everything but will get 50%.
In most cases, the person’s property is distributed in split shares to the family members, including the surviving spouse, siblings, aunts and uncles, and grandparents.
5. Fifth, the Intestate Succession Act determines how much the beneficiaries inherit
Section 7 of the Intestate Succession Act prescribes how the deceased’s estate will be distributed to the survivors if there was no Will. The Administrator of the estate must follow these Rules of inheritance. The Rules are as follows:
- If you have only a spouse (but no children, no parents)
- Your spouse gets everything.
- If you have a spouse and children
- Your spouse will get half of your assets, and your children will get the other half in equal proportions.
- If you have only children (but no spouse)
- Your children get everything in equal shares.
- If you have a spouse and parents (but no children)
- Your spouse gets half, and your parents get the other half in equal shares.
- If you have only parents (but no spouse and no children)
- Your parents get everything in equal shares.
- If you have only brothers and sisters (but no spouse, no children and no parents)
- Your brothers and sisters (or children of the deceased brother or sister) get everything in equal shares.
- If you have only grandparents (but no spouse, children, parents, brothers and sisters or children of deceased brother and sister)
- Your grandparents get everything in equal shares.
- If you only have uncles and aunts (but no spouse, children, parents, brothers and sisters or children of deceased brother and sister and no grandparents)
- Your uncles and aunts take everything in equal shares.
Contact an experienced estate lawyer
If a loved one has just passed on, it can be an overwhelming and emotionally difficult task for the family members to deal with the deceased’s estate. The probate lawyers at PKWA Law provide a professional and compassionate service to clients who have lost loved ones and require legal assistance with probate or estate administration.
Fixed, clear & transparent fees
Grant of Probate
Letter of Administration