Worldwide: International Estate Planning – Starting With A Will

Globalisation has changed the way we live. A less discussed topic is that globalisation has also changed the way we die. Cross-border investments and worldwide acquisition of assets have increased dramatically with technological advances and the ease of travel. It is also an increasingly common phenomenon for family members to reside in different jurisdictions. Such lifestyles may give rise to complex issues when the asset holder dies. International estate planning becomes very important in this context. Bad planning, or worse, no planning at all, may lead to unintended consequences. This is relevant not just for expatriates who settle here in Singapore, but also for Singaporeans with assets overseas.

Estate planning can involve a range of tools, one of which is a will. Apart from specifying who should inherit one’s assets, a will serves to appoint executors: in Singapore (and a number of common law jurisdictions), there is the concept of administration of estate, whereby a personal representative calls in the assets and pays up the debts of the deceased prior to distributing the remaining assets to the beneficiaries. Where there is a will, this duty falls on the executor(s) appointed in the will, who proves his title by way of probate in Court. In the absence of a will or the appointment of executor, or where the executor is unable to act and no substitute was appointed in the will, this role falls on the person who applies successfully for letters of administration in Court.

Where a person dies without leaving a will or with no executors appointed, the starting point is to determine who is entitled to administer the estate (i.e. to apply for letters of administration). Under Singapore law, certain classes of people are recognised, in order of priority, to have that right. However, this can become complicated when the deceased is a foreign-domicile, raising questions of which governing law should apply.

It is possible to commence an application to reseal in Singapore a grant of letters of administration that is obtained from a Commonwealth jurisdiction or the territory of Hong Kong; thus, in that sense, foreign letters of administration may be recognised by the Singapore Court. But recognition by resealing does not apply to grants (or the equivalent) obtained in other jurisdictions, such as the United States.

In the case where a person passes away without leaving a will, until the letters of administration are extracted, a family member may not be recognised to have the authority to access the deceased person’s assets and administer the estate, much less make distributions to the beneficiaries.

In summary, while not an insurmountable task, the process of obtaining letters of administration can be complicated. A couple of case studies will illustrate some of the complexities.

(1) 'Mr. Lim'

Mr. Lim, a Singaporean, was the sole proprietor of a thriving business and head of a loving family. Mr. Lim and Mrs. Lim have two children, Ryan and Rachel. After Ryan graduated from Stanford University, he became a doctor, got married and obtained United States citizenship. Due to a hectic work schedule and a new baby on the way, Ryan seldom comes back to Singapore. Rachel is 19 years old and has just been admitted to the National University of Singapore. Mr. Lim has many overseas investments including a summer home in Derbyshire, England and an office unit in Hong Kong. Mr. Lim never made a will because everything in his life was going well and dying was never on his mind.

Mr. Lim passed away suddenly due to a heart attack and his family was devastated. What may not be so predictable is the volume of issues Mrs. Lim had to deal with in addition to funeral arrangements. Since Mr. Lim died intestate (without a will), Mrs. Lim, as Mr. Lim's spouse, has prior right under Singapore law to apply for Letters of Administration with the Court so she can administer Mr. Lim's estate. The first obstacle is that despite being an intelligent young woman, Rachel is considered a minor in the eyes of the law because she has yet to attain the age of 21 and hence, two administrators must be appointed. Who should this second administrator be? Ryan lives far away and does not have a flexible schedule. More remote family members may not be willing to act because being an administrator is a big responsibility. Banks and financial institutions may refuse to disclose details of Mr. Lim's accounts if they do not recognise Mrs. Lim's authority to administer the estate.

Given the complexity and concerns of a sole proprietorship business and tax issues of overseas assets, it is simply overwhelming for Mrs. Lim and other family members to administer such a diverse estate. Moreover, the courts in Singapore and Hong Kong may request a ‘surety guarantee’ before Mrs. Lim can administer Mr. Lim's Singapore and Hong Kong assets respectively. Ryan's United States citizenship adds a further layer of complication.

(2) 'Mr. Smith'

Mr. Smith was originally from Manchester, England but settled in Singapore when he was appointed the head of the Asia-Pacific region by his employer. Since then, he has acquired various Singapore investments and assets. Mr. Smith went through a painful divorce from Debra, his wife. Because Mr. Smith was an avid supporter of animal rights, he fell out with his only living family member, his sister Fiona, who is very into extravagant fur coats. Mr. Smith was always too busy to think about his estate planning but he knew he did not want to leave anything to Debra and Fiona. In addition to assets in Singapore and England, Mr. Smith also had a vacation home in France.

One big issue with Mr. Smith dying intestate is that the intestacy rules do not give effect to his wishes. Mr. Smith's estate will go to Fiona and even Debra may not be fully excluded. The most fundamental issues are which law should govern succession (who stands to inherit) and the administration of his estate (how to get it). Should it be the law of Singapore (possible domicile of choice/habitual residence), England (domicile of origin), or even France, a jurisdiction which has the concept of forced heirship? Additional issues could arise from the new EU Succession Regulation that came into effect on 17 August 2015 but that is a topic that requires an article of its own.

The common lesson gleaned from the two examples is that a will is a vital starting point for international estate planning, or indeed any estate planning. A well drafted will can ensure one's assets go to the right people as simply as possible and as cheaply as possible in terms of tax, administrative expenses and expenditure of emotional energy of one's family. Had Mr. Lim executed a will, he could appoint his lawyers or professional trustees, who possess relevant expertise, to administer his estate and a surety guarantee would not be necessary for his Singapore and Hong Kong assets. Trust arrangements may be explored in light of Ryan's United States tax status. Had Mr. Smith executed a will, he could at least leave his estate to a recognised animal charity.

Is it better to have one will to cover worldwide assets or is it better to have multiple wills covering each jurisdiction? A single will covering worldwide assets is clearer and more straightforward but it may not be formally valid in every jurisdiction. Resealing or proving the will in every jurisdiction may also cause long delays in dealing foreign notaries. Having multiple wills may be helpful to address these issues but requires coordination and centralised review. Balancing these pros and cons as well as drafting a will that best fits the asset holder's family circumstances and complex wealth arrangements requires professional advice. If these issues are not addressed, then a bereaved family may face distress, uncertainty and financial insecurity in addition to the loss of a loved one.

This article was originally published in Business Times Wealth supplement on 2 February 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions