The principle of testamentary freedom states that a person is free to will away his assets in his will. However, there are limits to this testamentary freedom.

Section 3 of the Wills Act 1838 (WA) provides that all real and personal estate which the deceased is entitled to either at law or in equity at the time of his death can be disposed through his will. The general rule is that the testator cannot give away something which does not belong to him at the time of his death through his will. Any part of the will which attempt to do so shall have no effect.

 

Joint Tenancy

Properties that are hold on joint tenancies are principled on the rule of survivorship. This means that a joint owner who survives is entitled to the whole ownership of the joint asset once the other joint owner passes away (as held in the Court of Appeal case of Shafeeg bin Salim Talib and another v Fatimah bte Abud bin Talib and others [2010] 2 SLR 1123 at [49]). This survivorship principle is not only limited to immovable property and can apply to other items such as bank accounts (Estate of Yang Chun (Mrs) née Sun Hui Min, deceased v Yang Chia-Yin [2019] 5 SLR 593 (“Yang Chun”) at [53]). While alive, a joint tenant has an inchoate interest in the property that he holds as a joint owner. While he has ownership of the property when he is alive, the material time that section 3 of the WA is concerned with is at the time of his death. The moment he dies, the rule of survivorship takes precedence over testamentary dispositions (Yang Chun at [52]). While a joint tenant has the freedom to dispose of his interest of the joint asset during his lifetime, he cannot do that the moment he dies.

However, if a contrary intention can be shown (i.e. the intention for the rule of survivorship to apply), then the rule of survivorship may be displaced by a resulting or presumed resulting trust (Chye Seng Kait v Chye Seng Fong (executor and trustee of the estate of Chye You, deceased) [2021] 5 SLR 608 at [18]). This means that if it can be shown that the joint owners did not intend for the rule of survivorship to apply despite being joint tenants, then a resulting or presumed resulting trust would arise when the remaining joint owner is entitled to the whole ownership of the property or asset. This means that the estate of the deceased would have a beneficial interest (i.e. the deceased is entitled to the property or asset in equity at the time of his death). Hence his disposal of the property or asset through his will is valid. This is in line with section 3 of the WA.

In my view, the issue of joint tenancy is not truly a limit on a person’s testamentary freedom. This is because section 3 of the WA allows a testator to include his beneficial interest in real and personal property in his will. The issue instead should be whether the joint tenancy can be displaced by a resulting trust as the joint owners did not intend for the rule of survivorship to apply.

 

 

Insurance Policies

It is not that the testator does not have testamentary freedom to deal with his insurance policys through a will. Instead, if he includes the policies in his will to benefit his spouse and/or children, he should be advised that he can make an irrevocable express nomination in favour of them (s 3C and s 132 of the Insurance Act 1886, or s 73 of the Conveyancing and Law of Property Act 1886). This will create a statutory trust in favour of the beneficiaries and not form part of his estate. This protects these monies from potential creditors of his estate.

 

 

CPF Monies

Pursuant to section 24 of the Central Provident Fund Act 1953 (CPF Act) which protects CPF monies from creditors’ claims, a deceased’s CPF savings do not form part of his estate and hence cannot form part of his will. The SGHC case of Chai Choon Yong v Central Provident Fund Board and others [2004] 2 SLR(R) 416 at [15] and [17], which was affirmed by the SGCA in Chai Choon Yong v Central Provident Fund Board and others [2005] 2 SLR(R) 594 held that the CPF Act restricted a testator’s freedom to dispose of his CPF monies through a will as he did not have beneficial ownership of his CPF monies. This clearly meant that CPF monies fell outside the ambit of property disposable by will in s 3 of the Wills Act. The sole valid way for a person to reflect his wishes as to how his CPF monies should be treated upon his demise is to make a valid nomination (s 25 CPF Act). If no nomination is made or if the nomination is invalid, the CPF monies will be distributed in accordance with the ISA for non-Muslims or AMLA for Muslims (s 25A CPF Act).

 

 

The testator has to consider whether his spouse or children are sufficiently provided for

While the testator has the freedom to dictate how he would like to distribute his assets, he has to consider whether his surviving spouse and/ or child are reasonably provided for in his will.

This is because if they are not provided sufficiently for whether through a will or in intestacy, the spouse or surviving child can apply to court for reasonable provision for the maintenance of them as dependants (s 3 of the Inheritance (Family Provision) Act 1966 (IFPA)). As such, in these circumstances, the will of the testator is not supreme and the provision in the IFPA takes precedence.

It should be noted the IFPA serves a limited purpose. In the act, the standard of reasonable maintenance of provision was merely concerned with alleviating the harshness which could be caused to the surviving spouse due to the testator exercising total testamentary freedom to exclude his dependants from his will (AOS v Estate of AOT, deceased [2012] 3 SLR 721 (“AOS”) at [62]).

Therefore, the courts in determining what is reasonable maintenance will look at factors like:

  • How much there is in the estate.
  • What the dependants’ expenses are like.
  • Any other provisions made for the dependants outside of the estate (i.e., were there any inter vivos gifts from the testator to the dependants).

(AOS at [49])

What this means is that while the testator may intentionally omit his spouse and/ or child as beneficiaries of his estate, they can subsequently apply to court for reasonable provision from his estate.