Question About Bequest In A Will

[electrum]

What i am saying is there is nothing to stop Mrs X to draw out the cash and put into her own account and thereby "adding to her own bequest". She can draw the entire 2m one shot and put it under her own account. The bank is not able to stop her from doing so

Yes she can. There's really no advantage for her to do so since she already has full access to the money anyway while she lives unless it is purely to benefit her own beneficiaries so on this point, it would be a matter of trust between Mr and Mrs X that she would not take money from the Jt Ac solely to benefit her beneficiaries while depriving Mr X's intended beneficiaries

 

[electrum]

Better leave something for the executor for his or her trouble

No executor would be needed for the Jt Ac portion. In fact, the Jt Ac would not form part of the Will

 

[electrum]

The reality is abt identifying an executor who is willing to deal with these issues throughout the lifetime of the spouse. Old woman can really be problematic.

If u are referring to the Jt Ac, no executor would be needed for this. In fact, the Jt Ac would not form part of the Will as Mr X would have transferred out his money into the Jt Ac which would ge in the name of Mrs X and the nominee of Mr X

 

[BBCWatcher]

A joint account is not generally a viable estate plan. It might or might not be a small portion of an estate plan.

What’s to prevent the joint account holder (“Mr. Sibling” let’s suppose) from spending all the money (to settle gambling debts let’s suppose) while “Mrs. Wife” is still alive? Nothing prevents that or any other misbehaviors or errors with either/or joint accounts. “And” joint accounts are even worse for these purposes.

What’s wrong with my suggestion: a life annuity (preferably escalating) for the spouse, a lump sum for the spouse, and one or more lump sums for other family members?

 

[electrum]

A joint account is not generally a viable estate plan. It might or might not be a small portion of an estate plan.

What’s to prevent the joint account holder (“Mr. Sibling” let’s suppose) from spending all the money (to settle gambling debts let’s suppose) while “Mrs. Wife” is still alive? Nothing prevents that or any other misbehaviors or errors with either/or joint accounts. “And” joint accounts are even worse for these purposes.

What’s wrong with my suggestion: a life annuity (preferably escalating) for the spouse, a lump sum for the spouse, and one or more lump sums for other family members?

Again, it will be Mr X's trust and faith in his sibling that he will not withdraw anything from the Jt Ac during the lifetime of Mrs Wife. In fact, Mr Sibling will be tasked with distributing the residue in the Jt Ac to all other siblings.

I do like and appreciate yr life annuity suggestion but as I mentioned earlier, it will only provide regular payments and not any lump sums that might become necessary for any reason. Nonetheless, it could be a component of the overall estate plan comprising:

1. Lump sums for all beneficiaries
2. Life annuity for Mrs Wife with Mr Sibling as nominee
3. Jt Ac under names of Mrs Wife & Mr Sibling

You could ask, since Mr X is relying on trust anyway, why not just bequest the full Jt Ac monies to Mrs Wife and ask her to distribute any balance to Mr X's nominees in her Will? This could theoretically work but in practice, it would be more cumbersome because Mrs Wife would need to keep these monies separate, plus Mrs Wife may not have the details of Mr X's nominees

 

[BBCWatcher]

You could ask, since Mr X is relying on trust anyway, why not just bequest the full Jt Ac monies to Mrs Wife and ask her to distribute any balance to Mr X's nominees in her Will? This could theoretically work but in practice, it would be more cumbersome because Mrs Wife would need to keep these monies separate, plus Mrs Wife may not have the details of Mr X's nominees

Why would she need to keep any monies separate in this event? Her estate simply goes to her chosen heirs. She could phrase her will this way if she wishes (approximate phrasing, just one example):

"First, if I should predecease Mr. X, I leave my entire estate to Mr. X.

"Second, if Mr. X should predecease me, I bequeath a sum equal to what I inherited from Mr. X to his surviving siblings, divided among them in equal parts.

"Third, I bequeath any remainder of my estate to my nephew Mr. Y."

But I don't understand why Mr. X wouldn't just make sure his wife is very well taken care of financially (life annuity plus lump sum) and then just leave the remainder to his siblings directly — and/or give it to them now. Why impose this burden on her, that she must bequeath anything to his siblings? And that they must wait for her to die before they get to enjoy anything money can buy? They could easily predecease her anyway!

 

[V_for_Vanilla]

The reality is abt identifying an executor who is willing to deal with these issues throughout the lifetime of the spouse. Old woman can really be problematic.

The last sentence is funny.

 

[electrum]

Why would she need to keep any monies separate in this event? Her estate simply goes to her chosen heirs. She could phrase her will this way if she wishes (approximate phrasing, just one example):

"First, if I should predecease Mr. X, I leave my entire estate to Mr. X.

"Second, if Mr. X should predecease me, I bequeath a sum equal to what I inherited from Mr. X to his surviving siblings, divided among them in equal parts.

"Third, I bequeath any remainder of my estate to my nephew Mr. Y."

But I don't understand why Mr. X wouldn't just make sure his wife is very well taken care of financially (life annuity plus lump sum) and then just leave the remainder to his siblings directly — and/or give it to them now. Why impose this burden on her, that she must bequeath anything to his siblings? And that they must wait for her to die before they get to enjoy anything money can buy? They could easily predecease her anyway!

The key to remember is that Mr X and Mrs X are childless and both have their own siblings - plse refer Scenario that I posted in post #1. Perhaps yr outlook might be different but just as Mr X does not expect any bequests from any of Mrs X's siblings, neither does he feel obliged to leave bequests to any of Mrs X's siblings. Bearing in mind too, that Mrs X has assets of her own and Mr X fully expects that some if not the majority of these assets will be bequeathed to Mrs X's siblings in her Will

Mr X loves his wife and does not mind if Mrs X uses all that he possesses while she lives but he would want any unused assets to revert to his own siblings. Without a crystal ball, Mr X does not know how long Mrs X will live after he is gone. To ensure she has sufficient funds to cover any contingency, let's say Mr X bequeaths his wife a lump sum of $2mm. But due to unforseen circumstances, let’s imagine Mrs X passes on just 1 month after Mr X. In such circumstances, if there had been no prior discussions, the $2mm would be distributed according to Mrs X's Will and presumably to her siblings. This is the situation that Mr X wishes to avoid

On yr questions:

1. Why the need for Mrs X to keep monies separate if there is no Jt Ac? Answer is that Mrs X has her own assets (incl monies)

2. Why must Mr X's siblings wait b4 they get to enjoy...". This can be taken care of by Mr X also leaving some lump sums to his siblings directly as per my earlier post. But Mr X's first priority is still to his spouse and that is reflected by the Jt Ac arrangement and the life annuity with Mr X's sibling as nominee


BTW this phrasing - "Second, if Mr. X should predecease me, I bequeath a sum equal to what I inherited from Mr. X to his surviving siblings, divided among them in equal parts." is not entirely correct. Mrs X needs to only bequeath the Balance of the sum that she inherited from Mr X. Without a Jt Ac or proper accounting, it would be impossible for an executor to determine the Balance

 

[qhong61]

Hi,

Here is the scenario.

Mr X is married with no children. The matrimonial home was bought by him b4 marriage and is held under his sole name.

If X predeceases his wife, aside from the usual monetary bequests, he would want her to have the full usage of the property (ie full ownership rights) for as long as she lives. But if he were to bequest her the property in his Will, it means that, on her passing the property would go to her family (presumably) instead of X's family

Would it be possible for Mr X to make a "time-limited" bequest I.e. that during Mrs X's lifetime she will have full ownership rights but on her passing, the property passes to Mr X's nominees?

Above is kind of a rare question but I think this type of issue appears in many families without children.

Hope to get some answers from the many experienced and learned people in this forum. I kind of suspect it's not possible but let's see. Thks

Why not?

 

[electrum]

Why not?

Do u mean " why would it not be possible to make a "time-limited" gift in the Will"?

Such a bequest will have to be worded something like:

"I hereby bequeath my property to Mrs X to use at her pleasure as long as she lives and thereafter to Mr Y"

I suspect that will not be legally acceptable because I believe gifts or bequests in a Will need to be unconditional. The title to the property will have to pass unconditionally to Mrs X. Once she has the title, she has full control over the property

Maybe I am wrong - that's why I was seeking answers or opinions

 

[yoongf]

If Mrs X does not play by the rules, like regularly passing funds to her siblings... who is going to be the gatekeeper? Even if Mr.X sibling is a party to this, does Mr.X sibling have the documentary evidence to get a court injection?

These type of arrangement is quite common, but needs a big time trustee like HSBC Trustees to hold the estate in trust until the assets under the will is fully distributed.

 

[electrum]

If Mrs X does not play by the rules, like regularly passing funds to her siblings... who is going to be the gatekeeper? Even if Mr.X sibling is a party to this, does Mr.X sibling have the documentary evidence to get a court injection?

These type of arrangement is quite common, but needs a big time trustee like HSBC Trustees to hold the estate in trust until the assets under the will is fully distributed.

No, I guess u haven't read the earlier posts. There is no intention to make Mrs X pass funds to Mr X's siblings. It is only on Mrs X's passing, that the residual funds go to Mr X's siblings (via a nominee). If a Jt Ac is used for this purpose, then nothing needs to be done

Edit:

Rereading yr post, I believe u were actually talking about Mrs X passing funds to HER siblings. On this, I can only rely back on the trust in character argument again which I have mentioned a few times

 

[henrylbh]

Thanks for the response. It's an interesting idea - I will do some read-up on it. The immediate thought I have is - who will hold title to the property? The Estate, the wife or the eventual owner?

And do u think the same concept might apply to other assets, say monies as well?

Let's say Mr X has a property and $2MM liquid assets. Mrs X also has $1MM liquid assets. Both Mr and Mrs X have siblings but no children

In the normal scenario, Mr X would divide up the 2MM amongst his wife and his siblings in his Will. But Mr X's first priority is to look after his wife and ensure she has enough funds the rest of her life. This is difficult to determine as Mr X does not know how long Mrs X will live after he's gone. If he leaves too little for Mrs X, it may be insufficient if complications like medical bills arise. Otoh, if he leaves the major portion of his $2MM to her and Mrs X passes on very shortly after Mr X, the monies will go to Mrs X's siblings via her Will

Instead of dividing up the $2MM, can we apply the same "life tenant" and "remainderman" concept?

I.e. the Will will say "I bequest all my liquid assets to Mrs X to use freely and unemcumbered as long as she lives and on her passing, such liquid assets as remains shall be given to the following persons in the following ratios..... etc etc"

Thanks again for your thoughts on this

I have thought long about such matters. But in my case, it's between my spouse and only kid as the beneficiaries. Priority is the well being of my spouse to her last days in good health or in sickness. But if my spouse re-marry ...... What if my kid ...... What if the trustee ...... In the end, I did nothing Not even a will.

 

[qhong61]

Do u mean " why would it not be possible to make a "time-limited" gift in the Will"?

Such a bequest will have to be worded something like:

"I hereby bequeath my property to Mrs X to use at her pleasure as long as she lives and thereafter to Mr Y"

I suspect that will not be legally acceptable because I believe gifts or bequests in a Will need to be unconditional. The title to the property will have to pass unconditionally to Mrs X. Once she has the title, she has full control over the property

Maybe I am wrong - that's why I was seeking answers or opinions

Thot lky in his will said lwl can stay in Oxley even after his death?
And only after her then....

 

[henrylbh]

Thot lky in his will said lwl can stay in Oxley even after his death?
And only after her then....

One thing to note that even a wise man with foresight and one of best law firms could not straighten the will even after amendments to the will for 6 times ending in resentments. Only we could not learn any missteps or misgivings as it has not gone to court.

 

[CrashWire]

"I hereby bequeath my property to Mrs X to use at her pleasure as long as she lives and thereafter to Mr Y"

I suspect that will not be legally acceptable because I believe gifts or bequests in a Will need to be unconditional. The title to the property will have to pass unconditionally to Mrs X. Once she has the title, she has full control over the property

Maybe I am wrong - that's why I was seeking answers or opinions

One of the first few comments in this thread has already given you the right answer: Mrs X is a life tenant, and Mr Y is the remainderman.

You'll want to talk to a lawyer that specialises in family law to make it "legally acceptable".

 

[yoongf]

No, I guess u haven't read the earlier posts. There is no intention to make Mrs X pass funds to Mr X's siblings. It is only on Mrs X's passing, that the residual funds go to Mr X's siblings (via a nominee). If a Jt Ac is used for this purpose, then nothing needs to be done

If any of my unused CDC vouchers will be donated to charity after 31Dec22, u think I will leave some unused? I will use up the CDC vouchers to buy consumables to feed the whole village.

Mrs X, or her financial advisors, or her caregivers, will bound to have similar thoughts.

If really want to have an arrangement as originally described, need to have an independent trustee to oversee this arrangement until the end, and such trustees are not cheap.

 

[yoongf]

Life tenant / Remainderman is basically willing the property to Mrs.X and Mr.Y as joint tenancy owners. When Mrs.X goes, it automatically goes to Mr.Y.

I hv seen many examples and this is not a healthy thing to do. The property usually turns into very poor condition becos the tenant has no incentive to upkeep it.
Annual property tax will be interesting. Will the tenant be willing to pay the full share of property tax? Will the remainderman be willing to pay half share of the property tax?

The Remainderman cant wait for the Life Tenant to pass on. ABSD property count also adds to the complication.

I believe the latest trend is to will everything into a Pte Ltd and let the Companies Act set the framework for regular distributions.

 

[electrum]

Life tenant / Remainderman is basically willing the property to Mrs.X and Mr.Y as joint tenancy owners. When Mrs.X goes, it automatically goes to Mr.Y.

Thank you. I understand better the mechanism now. Was initially wondering who would hold the title during the duration of the life tenant/remainderman

I hv seen many examples and this is not a healthy thing to do. The property usually turns into very poor condition becos the tenant has no incentive to upkeep it.
Annual property tax will be interesting. Will the tenant be willing to pay the full share of property tax? Will the remainderman be willing to pay half share of the property tax?

Other than the property, the other major category would be cash. For this, the current thinking is to also set up a either/or Jt Account between Mrs X and Mr Sibling (sibling of Mr X). Similar to the life tenant/remainderman concept, Mrs X will be able to draw down from the Jt Ac for all her expenses incl expenses for the upkeep and maintenance of the property

Trust will have to come in that neither Mrs X nor Mr Sibling will make unwarranted withdrawals

The Remainderman cant wait for the Life Tenant to pass on. ABSD property count also adds to the complication.

The Remainderman will not be the sole beneficiary of the Property but will be tasked to dispose of the Property and to distribute the proceeds amongst Mr X's siblings

I believe the latest trend is to will everything into a Pte Ltd and let the Companies Act set the framework for regular distributions.

Interesting but probably too much work unless the person has multiple properties and assets

From the various responses, the main theme seems to be how to ensure that both Mrs X and Mr Sibling play their parts honestly and on this Mr X can only rely on his judgement as to the character of his wife and sibling through his interaction with them over his lifetime

 

[electrum]

If any of my unused CDC vouchers will be donated to charity after 31Dec22, u think I will leave some unused? I will use up the CDC vouchers to buy consumables to feed the whole village.

Yes, because CDC vouchers are from the government

But what if your father was the one to give u the vouchers and his dying wish was for u to use them only for your own benefit and to give the remainder to charity? Would you really defy his dying wish?