SINGAPORE Law and Practice Contributed by: Sim Bock Eng, Josephine Choo, Aw Wen Ni and Vincent Ho, WongPartnership LLP
Firewall Provisions Singapore’s trust law also has firewall provisions in relation to trusts set up in Singapore. Section 90 (2) of the Trustees Act 1967 provides that no rule relating to inheritance or succession affects the validity of a trust or the transfer of any property to be held in trust if the person creating the trust or transferring the property had the capacity to do so under the law applicable in Singapore, the law of their domicile or nationality, or the proper law of the transfer. 2.4 Marital Property In Singapore, the courts have repeatedly accepted “deferred community of property” as the underlying philosophy of the law on the division of matrimonial assets (see Section 112 of the Women’s Charter 1961 and BPC v BPB [2019] 1 SLR 608) – ie, during the marriage, a person may deal freely with assets under their own name without the consent of the spouse. It is only upon the breakdown of a marriage that the courts would determine each party’s entitlement to the pool Under the Women’s Charter 1961, only “matrimonial assets” will be subject to division in the event of a breakdown of the marriage. Matrimonial assets are defined by Section 112 (10) of the Women’s Char - ter 1961 to be any asset of any nature acquired dur - ing marriage by one or both parties, and any asset acquired by a party before marriage that was ordinarily used or enjoyed by the family during the marriage or that has been substantially improved during the mar - riage by one or both parties. Gifts and inheritances are not subject to division, whether received before or during the marriage, unless they were substantially improved during the marriage by one or both par - ties thereto. Gifts and inheritances can also lose their character as such, due to the intention or treatment of the recipient. of matrimonial assets. The Women’s Charter In the case of CLC v CLB [2023] SGCA 10, the hus - band received various gifts and inheritances, including monies and investments in bank accounts and invest - ment portfolios in his sole name. During the course of the marriage, the husband co-mingled the mon - ies with those of his spouse and used them for the benefit of the family. He also indicated an intention to
or mental incapacity incapable of maintaining them - selves, an infant son or an unmarried daughter. Funds held through a deceased’s Central Provident Fund account (applicable to Singapore citizens and permanent residents) can only be disposed of through the appropriate instrument of nomination, and not via a will. Forced Heirship Forced heirship rules apply to Muslim persons who are domiciled in Singapore at the time of their death. In accordance with Section 111 of the Administra - tion of Muslim Law Act 1966, the estate for such per - sons must be distributed in accordance with Islamic inheritance laws, or Faraid laws, which generally set out fixed rules regarding the relations who survive the deceased Muslim, the relatives who should inherit and the proportion of their inheritance. Generally, a Muslim domiciled in Singapore can only give away up to one third of their estate by their will, and only to persons who are not related to them by blood (such as their parents, spouses, siblings and children). The Singapore High Court’s decision in Mohamed Ismail bin Ibrahim and anor v Mohammad Taha bin Ibrahim [2004] SGHC 210 held that a Muslim may only bequeath up to one third of their estate to their relatives who have renounced the Islamic faith. Succession Planning From a succession planning perspective, it is useful to know that the Singapore Court of Appeal in Shafeeg bin Salim Talib v Fatimah bte Abud bin Talib [2010] 2 SLR 1123 held that survivorship applies to assets that are held by a deceased Muslim in joint names with another party. Upon the death of the Muslim, the surviving joint owner would take legal and beneficial ownership of the whole of the jointly held property, which will not be distributed as part of the deceased Muslim’s estate. The Court of Appeal further opined that if the settlement of a Muslim’s assets into a trust were completed during the deceased’s lifetime, such assets will be treated as trust assets and will not be part of the estate and effects of the Muslim that would be subject to Islamic inheritance laws.
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