How to prevent relatives from fighting over your wealth

If you own real estate and have not done a will, you are putting your family at risk of a financial jeopardy that can end in a court battle should anything happen to you.

This is because when someone dies without a will, the assets will be shared by everyone in the immediate family, such as the spouse and children.

In the case of properties, it is a burden, not a windfall, for one to inherit a small share of a family property if it is not sold for the proceeds to be shared.

Take, for instance, a married man with four kids who dies without a will, leaving behind a house where his family lives.

When this happens, his widow will own 50 per cent of the house while his four children will own 12.5 per cent each.

It is not easy to offload part property shares among family members if none of them can afford to buy out the rest. Moreover, those who already have their own homes will need to pay the additional buyer’s stamp duty if they take over the part shares of their relatives.

Court order needed in a dispute

In an almost textbook example of how things can go wrong, four siblings went to the High Court recently to resolve a property dispute because their father had died without a will.

As the father owned two properties worth about $5 million, the siblings shared the inheritance equally, or $1.25 million each.

On paper, the number looks good, but in reality each of them owned a quarter of each of the property, which was a messy arrangement.

All was well for about 10 years, but splits began to emerge and the siblings broke into two factions. As each held a quarter stake in the properties, no one had the upper hand.

Any vote would result in a two-two deadlock. The two factions could not see eye to eye because both sides insisted on doing things their way. For instance, even when they all agreed to sell the shophouses, they fought over how this should be done.

A neutral bystander would think they could have at least agreed that it would be in their interest to sell at the highest possible price, with both sides trying to secure the best offers.

Yet the siblings fought over the right to sell all the way to the High Court. In the end, the court ordered them to appoint a lawyer to conduct an independent valuation and sale of the properties.

Seek legal help to write wills

At least two families went to the High Court in recent years because the patriarchs’ wills were signed in a haphazard way at the hospitals without the presence of lawyers.

In both cases, the wills were drafted by lawyers, but they were not present to witness the signing. Instead, the event was organised by relatives and friends who did everything themselves, including explaining the terms of the wills to the dying men.

Not surprisingly, the suspicious manner in how the wills were done gave reasons for relatives who did not get anything to mount a challenge.

Both the wills were eventually upheld because the judges did not find any foul play. But they commented that the disputes could have been avoided if lawyers had been present.

One of the judges even noted that drawing up one’s will without professional help, especially at one’s deathbed, was “not wise”.

This is because lawyers can also act as impartial witnesses to refute any allegation that the deceased did not have the mental ability to understand and sign the will.

There are also benefits in seeking legal help because top legacy lawyers can offer creative solutions to help their clients.

For instance, a rich widow’s will had a condition that would only allow her son and daughter to sell her properties more than two decades after her death. The idea was to deny her son’s spouse from gaining a share of her properties should their marriage be short-lived.

As it turned out, the couple divorced not long after the widow’s death, and the son’s ex-wife could not get a share of his mother’s properties in their divorce.

What this means is that if you do not want certain people to get their hands on your assets when you are no longer around, it is prudent to get your will done early.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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