WHAT IS AN ESTATE?

When a person passes on, he may leave behind assets which he owned. These assets are called his estate and may include immovable properties such as land, houses or flats, and movable properties such as bank savings, stocks, unit trusts, club memberships, and jewellery. Someone has to be appointed by the Court to take charge of the deceased’s estate and distribute it to those entitled to it, the beneficiaries.

DUTIES OF AN EXECUTOR OR ADMINISTRATOR

An Executor is a person appointed by the deceased under his Will to administer and distribute his estate. It is useful to consider the appointment of a trusted financial adviser as an Executor under a Will in view of the fairly extensive duties involved in administering an estate. The consent of a financial adviser should be sought and the Will should provide for the fair remuneration of the financial adviser for undertaking the duties involved.

If the deceased died without having made a Will, someone has to be appointed as an Administrator to take charge of the estate.

The practical duties, roles and responsibilities of an Executor or Administrator vary with the size and nature of the estate and for an Executor, the provisions of the Will. 

Some of the duties of an Executor or Administrator are as follows:-

·                    Make the necessary funeral arrangements, if so directed.

·                    The Executor should examine the terms of the Will to identify his duties generally.

·                    Meet with the family of the deceased for general discussion concerning their immediate financial needs.

·                    Locate bank safe deposit accounts, conduct inspection of contents of safe deposit boxes and make an inventory list.

·                    Obtain and examine financial records, bank statements, income tax returns, real estate title deeds, cheque books and business papers generally, and to secure complete particulars of assets and liabilities of the estate.

·                    Safeguard and protect valuable belongings of the deceased in his home.

·                    Estimate cash requirements of estate to pay debts, legacies, and administration expenses.

·                    Pay off credit card debts to prevent interests from accruing.

·                    Lodge life insurance claims with the insurers, and obtain partial settlements allowed by law.

·                    Arrange for transfer of any vehicles, if necessary.

·                    Cancel any subscriptions or services that may not be applicable to the family of the deceased.

·                    Estimate total value of the assets of the deceased less liabilities.

·                    Prepare and file income tax returns of the deceased. Contact the Inland Revenue Authority of Singapore regarding any outstanding liability for tax or arrange for refund of any overpayments.

·                    If an Administrator, he is to draw up a name list and personal particulars of next-of-kin of the deceased who are potential beneficiaries.

·              Appoint a lawyer to apply to Court for Grant of Probate or Letters of Administration to administer and distribute the estate. Please see the headings below for the relevant information and issues involved.

·                    Arrange for audit of estate’s account and submit statements to the beneficiaries. If necessary, consult a financial adviser.

·                    Consult a financial adviser as to how best to resolve payment of insurance proceeds and other assets of the estate.

·                    Consult and appoint a financial adviser to advise on management of estate in case of minority interests or where trust provisions apply under the Will.

·                    Distribute residue of estate to the beneficiaries or if there are trust provisions under the Will, establish proper records for administration of the trust.

GRANT OF PROBATE

The Executor appointed under a Will would have to apply for a Court order called the Grant of Probate authorising him to administer the estate according to the directions contained in the Will.

GRANT OF LETTERS OF ADMINISTRATION

If the deceased died without having made a Will, an application has to be made for a Court order called Grant of Letters of Administration authorising the person(s) named to administer the estate according to the Intestate Succession Act.

The law gives priority to certain family members over others, depending on the marital status of the deceased and his family composition, to be appointed as an Administrator. If the deceased was married with children, his spouse will have priority over the children to be Administrator. If the deceased was single, his surviving parents will have priority over his siblings to be Administrators.

If there is any beneficiary who is below 21 years old, there needs to be at least two Administrators to be appointed in order to protect the minor beneficiary’s interest in the estate.

COURT PROCESS

If the value of the estate exceeds S$3 million, the application is to be made to the High Court. If the value of the estate is less than S$3 million, the application is to be made to the Subordinate Courts. An application should be made within six months after the death of the deceased, otherwise there is a need to explain for the delay to the Court.

In order to file the application in Court, the Executor or Administrator has to provide a list of assets and liabilities with supporting documents and relevant information to the lawyer concerned. The original death certificate and Will, if any, are also to be provided as these documents have to be sent to and verified by the Court.

Once the application is granted by the Court, before the Grant of Letters of Administration can be extracted, the Administrator has to execute an Administration Bond with two sureties, if applicable. If sureties cannot be provided, a separate Court application to dispense with this requirement would be needed.

OBTAIN GUIDANCE AND ASSISTANCE

The Executor or Administrator should seek legal advice for the following reasons:-

·                    The Will may contain terms and clauses the implications of which an Executor may not fully understand. An Administrator will need to know who the beneficiaries are who are entitled under intestacy.

·                    The estate of the deceased may be complex.

·                    The application to Court to administer and distribute the estate entails legal procedures and issues such as the preparation and filing of numerous documents, and Court attendances.

·                    If the estate of the deceased comprises of immovable properties overseas, there would be a need to re-seal the grant of Probate or Letters of Administration overseas.

·                    The process of getting in the assets and making distribution to the correct beneficiaries in accordance with their respective entitlements under law and under the Will may require legal advice.