SINGAPORE - If you do not want to give your share of a property away, you should think twice about including a joint owner to the title.
Some parents include their children's names on their property for administrative convenience and for mortgages, but they have no intention of letting these children own the real estate when they die.
They bequest the properties to other children without realising that a will alone cannot over-ride the eligibility of surviving joint owners to inherit the whole property.
Disputes will inevitably erupt and siblings often end up in painful and expensive legal tussles, all because of poor legacy planning.
One local family ended up in the High Court recently because the parents, who had two sons and a daughter, included the name of older son in their two properties but willed the assets to the youngest one.
The surviving joint owner refused to relinquish his right over the assets so the sister and her younger brother, who were named executors of their parents' wills, sued their older brother to compel him honour their parents' wishes.
The older brother lost because his siblings could prove that he also knew that his parents never intended to give both properties to him.
Sometime in 1983, the couple rented a shophouse in Ang Mo Kio from the Housing Board to run a department store.
In 1995, they got the chance to buy the shop at around $500,000 and they did so with a loan. A similar shophouse there is selling at over $2.5 million today.
At that time, the couple listed their eldest child as a joint owner as he was the only child who had reached 21 then.
In 1999, the couple bought a house in the Yio Chu Kang area for about $1 million. The eldest child's name was also included as an owner in this property.
In 2013, the mother died and her will stated that all her shares in the two properties would go to her youngest son.
Her husband died six years later and his will also left his shares of properties to the same son.
In determining who gets what in such a case, judges have to look at how much money each party put into the asset and what were their intentions when it came to the ownership arrangement.
High Court judge Philip Jeyaretnam noted that until their mother died, none of the siblings knew who would get the properties nor did they know the legal implications of the ownership.
But it was telling that the eldest son wrote this e-mail to his siblings after their mother's will was read: "I don't know what the properties would be. I suspect that we may have used joint tenancy for both. I wasn't involved in the shophouse - I just signed."
He also noted that he did not remember the lawyers explaining the implications of the ownership of the house to his parents or him.
Such statements led Justice Jeyaretnam to disbelieve the man's testimony that his parents had wanted him to inherit both properties. This was supported by the fact that he said nothing about his parents' alleged intentions that he should have complete ownership of both properties after the mother's will was read.
Had he done so, his siblings could have checked with their father, who was still alive then.
"(He) said nothing about it because at that time he did not believe that his parents had ever told him such a thing. He has in the intervening years either made this up or mistakenly convinced himself that it happened," the judge noted.
As the parents clearly did not want the eldest son to inherit their properties, the rule of survivorship would not apply.
While it was clear that this son would not inherit both properties totally, Justice Jeyaretnam made the following orders so that he could get back what he had paid into his parents' properties.
1. The shophouse belonged to the parents only but $120,000 had to be refunded to their eldest son for paying for part of its loan.
2. The house would be owned by the parents and the same son in equal shares because he had consistently paid for one-third of the mortgage. In addition, the son will also have an additional $271,000 refunded to him for redeeming the outstanding loan.
There is an important lesson to be learnt from this case: A joint owner cannot just will his part away to another party because the other joint owner will surely contest this.
While the couple's wills were eventually enforced in this case, it was done only after a painful court battle that all families should try to avoid.
The only way the parent can safely pass his or her property to the desired beneficiary would be to make a prior application under the law to sever the joint ownership and clarify just how much share each joint owner would have.
This is something that all joint owners should note because it is not uncommon for relatives or even friends to sometimes invest in property together. So if you do not want to be caught by the "survivor takes all" rule, you should consult your lawyer and get the necessary papers done so that it is clear who gets what.
Such measures can go a long way to preserve peace and harmony in families.
Credit: Straits Times
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