Joint Ownership in Singapore

A “common approach” to transfer of assets upon one’s demise I often hear of in my practice as an estate planner, is to set up joint ownership for the asset. This can be property, savings account, investment accounts etc.

However, this is really not recommended. 

The belief and intent is for the joint owner to automatically inherit the asset, without having to go through the probate process. 

While it is true that joint ownership typically goes by the rule of survivorship, there are situations where this Rule will not work out well.  

Here are 4 situations where joint accounts would not work as intended:

Scenario 1: 

• when the younger joint account owner pre-deceases the older joint owner 

We often assume that an older person will pass on first. However, these days, it’s not hard to hear of stories whose friend or family member passing on at 30+, or 40+ years old. 

When the younger joint owner pre-deceases the older one, and if the older owner do not have a Will, then the distribution of his estate will be based on the Intestate Succession Act. This may not be the deceased’s intention. 

Scenario 2: 

• when the joint owners are non-family members (or non-legal ties)

Many people form partnerships when it comes to investment properties and/or businesses. Sometimes, the intention may be to transfer the remaining shares from the deceased partner to the surviving partner. 

If the partner is not a family member, and when the deceased partner did not set up a Will, the shares of the deceased partner will get distributed via the Intestate Succession Act. This means that the next-of-kin family member gets to inherit the asset instead of the surviving investment partner. This may not be the deceased partner’s intention. 

Scenario 3: 

• when there is conflicting intent in gifting of beneficiaries (discrepancies with intent stated in the Will)  

A sole owner may have added a joint owner to an asset (eg. a house, or a bank account) thinking that it can facilitate the transfer of the asset upon his/her demise. Later on, he/she may set up a Will with different intentions. 

This conflicting intent can be a source of dispute. 

Reference: https://www.straitstimes.com/business/invest/when-a-joint-owner-does-not-inherit-the-property

Scenario 4: 

• when couples with jointly-owned assets divorce (these become matrimonial assets)

Many families tend to set up joint accounts for ease and convenience to pay for household and kids’ expenses. For some couples, the contribution may not even be equal (ie 50-50). However, when the marriage does not work out, the jointly-owned asset will now have to be split equally for division of estate.

Reference: https://www.straitstimes.com/business/invest/spore-woman-had-to-share-5m-with-ex-husband

Concluding Remark

Many people assume setting up joint accounts ownership for administrative convenience without considering the implications in the event of one’s passing. 

At first, this seems like the easiest way out. However, with the above 4 scenarios, joint ownership would not work as intended. 

Estate planning should not be taken lightly if family harmony is to be preserved. That’s why legal instruments such as the Will and Trust exist.

As with the cases above, the families ended up not just with financial damages, but also broken family ties. 

Is the perceived “administrative convenience” really worth it? 

Why take such risks when doing it legally is now already more affordable these days?