Can’t Take My Eyes Off Your “TRUST”

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Not long ago, my friend told me that his uncle has died without a will and his former son-in-law now claims that he is the sole beneficiary of his former father-in-Law ’s estate. This led to a lot of protest from other family members especially the siblings of the deceased because they knew that the deceased was dead against giving anything to him. The deceased had quite a substantial amount of money. For a moment, I was quite puzzled on how did the former son-in-law get the idea that he is the beneficiary. As far as I know, if the deceased does not have a will, his estate distribution will follow the Distribution Act, 1958 (amended in 1997) which would give to his wife, parents and children at 1/4, 1/4 and 2/4 respectively to them.

My friend explained in greater detail that his uncle ’s wife died long ago. He only has one daughter and unfortunately, she also died before him. She was survived by a daughter who was only a few years old. This uncle took care of his granddaughter all this while. But upon his death, his former son-in-law says that he is now the guardian of his daughter. After hearing this, then only did I realise the reason behind the former son-in-law ‘s claim to his former father-in-law ’s estate. In actual fact, this uncle’s estate will be distributed solely to his granddaughter being the substituted heir to the daughter as stated in the Distribution Act 1958. As she is not yet 18, her father being the guardian will be receiving the entire estate and manage it on behalf of his daughter. In other words, the former son-in-law may apply for Letter of Administration (L.A. ) for the estate of his former father-in-law and this would give him access to his assets.

If the uncle was alive and knows that his former son-in-law may take charge of his assets, he could have written a will to appoint his chosen executor to avoid him acting as the administrator and left specific instructions that the assets for the granddaughter are to be managed by another party and not left to the former son-in-law to handle. The uncle can choose a person or a trust company to act as the executor to ensure his instructions will be carried out to benefit the granddaughter and disallow the assets to fall into the hands of his former son-in-law. The better choice would be to appoint a trust company as the executor to prevent the former son-in-law from taking advantage of or manipulating any other family members as the executor.

As the uncle is not the guardian or parent of the granddaughter, he will not have any say in appointing the guardian for the granddaughter but the will can contain terms in a testamentary trust that is explained below to ensure funds for the granddaughter are used in accordance with the terms of the will such as the education fee to be paid directly to the education provider or the medical bills paid to the medical provider and any reimbursement to be made to the former son-in-law must be with the necessary receipts.

As to the monthly maintenance for the granddaughter, it can be on a reimbursement basis or a fixed reasonable amount paid to the former son-in-law. Where the granddaughter requires additional money for maintenance, the uncle can state in his will that it needs to be confirmed by another trusted person that is named in the will as the protector for the granddaughter. This way it will minimise or avoid the former son-in-law from misusing the money meant for the granddaughter and she will be able to receive her inheritance when she reaches a certain age, say at 25, where she is independent and able to make decisions on her own.

Therefore, if a Trust Company is chosen as the executor and trustee of this estate, there will be continuity, experience, knowledge and professionalism. You can take it as the Trust Company is telling us that I can’t take my eyes off your trust.