You have step-children or your children are step-children to your new spouse
It is quite common to have step-children in Singapore, especially if you have been married more than once. These multiple marriages could be due to a divorce, your first spouse passing away, or your married partner having a prior marriage with children.
The main issue of step children is that they have no legal position in the Intestate Succession Act. Therefore, one might unintentionally exclude one’s estate from deserving step-children if no proper estate planning is done.
One should bear in mind that your own children from your previous marriage are considered step-children to your new spouse. If you pass away before your current spouse, and your current spouse passes away shortly after. Your own children could unintentionally be excluded from your assets. This is clearly illustrated in the court case regarding Low Guang Hong David and others vs. Suryono Wino Goei (2012).
In this case, Mr. Low Kim Huat married Mdm. Lina Halim in 1975. They had no children, but Mr. Low had children from his previous marriage. David Low was one of his children. Mdm. Lina treated her step-children like her own, and the relationship between the step-children and Mdm. Lina was very good. When Mr. Low passed away in 1994, he bequeathed his estate to Mdm. Lina. Subsequently, Mdm. Lina passed away in 2011 without a will. Mdm. Lina had an elderly brother in Indonesia.
The court case was to determine whether Mdm. Lina’s estate should be distributed to her step-children, since the assets were originally accumulated by their late father, Mr. Low, or if the beneficiary should be Mdm. Lina’s elderly brother according to the Intestate Succession Act. The court ruled in favour of Mdm. Lina’s elderly brother. If this were to happen to you or your children, how would you feel?
Estate planning implications and potential problems
- Step-children have no legal position in the Intestate Succession Act. If you don’t name them in your will, they will be excluded from your estate.
- If you are in a second marriage and you pass away before your current spouse, the children of your first marriage could potentially be excluded from your estate if you die without a proper estate plan (as illustrated in above case).
- The legal position of step children in S49L (Trust Nomination) life policy is unclear.
- When you re-marry, your earlier will is revoked.
- When you re-marry, you earlier CPF nomination is revoked.
- When you re-marry, your earlier insurance nominations (revocable or irrevocable) are still valid.
Estate planning solutions
- Give serious thought to your estate plan especially if you have 2 sets of children, one from your previous marriage, and the other from your current marriage.
- Write a will to appoint an appropriate executor, and distribute your estate fairly amongst all stakeholders.
- Update your CPF nomination.
- Update your life policy nomination of beneficiaries.
- If it is inconvenient to distribute your estate through your will, (e.g. if your current wife is not in good terms with your children), you can consider using the assignment of your life policy or a trust to transfer assets to your children in a low profile way.
- Assess what your current spouse’s financial needs will be like in the occasion that you die prematurely. Your children might not be obligated to provide for their step-parent when you die. Tailor your estate plan accordingly.
- Give serious thought to what would happen if your current spouse demands all your assets to be jointly held at the exclusion of your children from your previous marriage. Act wisely.
- Consider bequeathing your estate to your intended beneficiaries while you are still alive.