Source: The Straits Times, NOV 1, 2023
Doctor’s widow and eldest daughter lose court tussle over $4m he had willed to all 4 children
Be aware of unintended outcomes that may result from the disposition of assets that a testator co-owns with other people upon his death, writes Lee Chiwi, Chairman of Estate Planning Practitioners Limited (EPPL), AEPP®.
“Say not you know another entirely, till you have divided an inheritance with him. The words of the late Johann Kaspar Lavater, uttered more than two centuries ago, were as sombre as they were prescient. This court has witnessed, on occasions aplenty, the unfortunate legal wars waged between the living over the property of the dead.” Opening words of Chan Seng Onn J in his judgement in Lim Choo Hin (as the sole executrix of the estate of Lim Guan Heong, deceased) v Lim Sai Ing Peggy [2021] SGHC 52
The joint tenancy, as a form of holding, appears to be a relatively straightforward process and many related parties, e.g. parent and child – choose this as a form of holding for assets like bank accounts, with the intention that when one of the joint tenants dies, the other takes the whole of that asset as the surviving joint tenant. However, as case law shows, sometimes this is challenged as highlighted in a recent case in Singapore where sums of money in bank accounts totalling some S$4 million were in contention – another instance where the living fight over the property of the dead!
Case background
In Khoo Phaik Eng Katherine and another v Khoo Phaik Ean Patricia and another [2023] SGHC 314, the plaintiffs (the youngest and second daughter of the deceased) claimed against the defendants (the eldest daughter and spouse of the deceased) for a declaration that, upon the demise of the late Dr Khoo Boo Kwee on 21 January 2021, the defendants hold the entire balance of the moneys in two joint accounts totalling approximately S$4 million on resulting trust for Dr Khoo’s estate.
In his Will dated 10 August 2012, Dr Khoo provided that, upon his death, the moneys in the accounts would be distributed equally among his four children. However, upon Dr Khoo’s death, an intractable dispute arose as to whether ownership of the moneys in the two joint accounts passed to the defendants by operation of the right of survivorship.
In October 2019, Dr Khoo was diagnosed with liver cancer. Soon after, he added the defendants (his spouse and eldest daughter) as co-account holders under which each joint account holder could operate the account independently of each other. Some 11 days later, Dr Khoo amended his Will through a Codicil but it did not materially change the nature of the disposition of the moneys in the joint accounts.
The defendants’ case relied heavily on Dr Khoo’s conversion of the joint accounts in November 2019 – therefore he did not intend for the moneys in the joint accounts to be distributed to his four children in equal shares as instructed in his Will. Upon Dr Khoo’s demise, by operation of the right of survivorship, it was presumed that Patricia and her mother, Evelyn, jointly held the entire balance of the moneys in the joint accounts as legal and beneficial owners.
After considering the totality of the evidence, the Court held the view that the conversion of the joint accounts was, by itself, a neutral factor. In ascertaining the state of the mind of the deceased, they took into cognizance that he had signed a Codicil to the Will just 11 days after the conversion of the joint accounts, which made it plain that he continued to treat the moneys in the joint accounts as his moneys to be bequeathed under the Will and Codicil.
Hence, the Court found that Dr Khoo intended to retain all beneficial interest in the joint accounts at the material time. The adding of the defendants to the joint accounts was also consistent with Dr Khoo’s intention for the defendants to assist Dr Khoo in the administration of his medical expenses from the joint accounts.
Court’s findings
The Court held that on the balance of probabilities, Dr Khoo intended to retain all beneficial interest in the joint accounts for himself at the material time and, upon his death, for the moneys in the joint accounts to be distributed in accordance with the terms of his Will and Codicil. The defendants therefore held the moneys in the joint accounts on resulting trust in favour of the Dr Khoo’s estate.
It was also observed by the Court that where the bank’s terms and conditions provide for the right of survivorship, the survivorship clause must be interpreted by giving it its plain meaning. Case authority has, however, established that a survivorship clause without more is a contractual arrangement between the bank and the joint account holders as to how to deal with the moneys in a joint account and, therefore, not conclusive evidence of the parties’ intention as to ownership of the moneys in the joint account.
Our comments
Readers should be aware of the unintended consequences that may result with the disposition of assets that a testator co-owns with other people upon his death. The rule of survivorship ordinarily operates and a testator should not take chances in presuming that the asset will be shared and divided with those that survived him but were not co-owners. In making such plans, it will be highly relevant for his intentions to be documented and all relevant parties informed and with their acknowledgement of these matters to avoid future disputes when the time comes.
This article was first published in our newsletter, The Custodian Issue 28. Click here to access our latest newsletter
