Presumption of Death

A missing family member is one of the worst situations a family can face. Though death is painful, family members are at least able to experience some closure. If your loved one is missing and is given the status “presumed dead”, the family members will not have closure as they do not know whether their loved one is dead or alive. This lack of emotional closure can cause great mental suffering to the family members. In Singapore, a presumption of death certificate can be filed with the court after the person has disappeared for more than seven years, but the approval is not always granted. Below are some real-life situations:

1. An elderly man left home on 28th June 1987 and disappeared. In November 2012, his wife finally decided to apply to the court, declare that her husband dead, and transfer the family property to her two sons.
2. A 44-year-old manager left home for business in his new car on 14th May 2002. He did not return home. No one has ever seen him since. His wife, who was originally a home-maker, had to work to raise the family of two young children, and pay the mortgage. On 20th July 2011, she decided to close the chapter and apply to court for a presumption of death certificate for her husband. This will allow her to sell the house (which is owned jointly with her husband) and downgrade to a smaller flat to ease her finances.
3. In Jan 2003, a Singapore Navy ship collided with a commercial container vessel. That tragedy resulted in the deaths of four Navy crew members. Of the four, 24-year-old Sgt Mary’s (not her real name) body was never found. She was the main breadwinner for her elderly parents. Her parents waited for more than a year for the presumption of death certificate to be issued. During the wait, the parents were in a dire financial situation, as they could not gain access to their daughter’s bank account and life policy.

Estate Planning Implications and Problems

1. A missing person is not considered dead, and therefore no one can access his/her bank account, life policy, CPF etc. This can create serious problems, because if the missing person is the main breadwinner, the family can easily fall into a cash flow problem.
2. If the missing person owns a property jointly with his/her spouse, the spouse cannot make any transactions (e.g. sell the property, re-finance etc) involving the property. At the same time, the spouse has to continue servicing the mortgage.
3. Similar to item (a), the family members cannot claim the proceeds from the missing person’s life policy from the insurance company because he/she is technically “not dead”.
4. Without the presumption of death certificate, no estate settlement process can be initiated. The assets will be frozen, but the liabilities will continue. For example, un-paid credit bills will continue to incur interests and late fees.
5. The surviving spouse is still considered married, she is in actual fact a “living widow”. She cannot re-marry.

Estate Planning Solutions

1. If the person is missing due to an accident or a natural disaster (e.g. a tsunami), the family can apply to the court seeking presumption of death certificate immediately if it can be established that the person was at the location of the accident or disaster.
2. While waiting for the presumption of death certificate, no estate settlement process can be done, but the next of kin should engage the financial institutions actively.
3. The next of kin should establish the current liabilities the missing person has (e.g. credit card and overdraft outstanding etc.). Make arrangements to settle the liabilities if necessary, as they may sometimes contaminate the surviving family members’ savings via joint accounts.
4. Close all joint accounts with the missing person if possible.
5. Consider whether the missing person’s life policy should be lapsed. Sometimes it makes financial sense to continue the premium and claim its death benefit in seven (or more) years when the presumption of a death certificate is being issued.
6. Try to locate the will of the missing person. It can be useful when the presumption of death application is granted.