Introduction

As you plan your legacy and in drawing up your will, one will always assume that monies in the CPF may be included in a will and be distributed accordingly. This assumption is a common, but erroneous one that may go against your wishes.

1. S25(2) CPF Act

“If, at the time of death, of a member of the Fund, there is no person nominated under subsection (1), the total amount payable on his death out of the Fund shall be paid to the Public Trustee for disposal in accordance with any written law for the time being in force”. 

 Under the CPF Act and the provisions above, it is imperative to note that one must nominate their designated beneficiaries with CPF Board failing which monies in the member’s account will be distributed in accordance with the Intestate Succession Act in Singapore.

2. Intestate Succession Act

Under the Intestate Succession Act, the distribution of monies will be dependent on the deceased’s marital status. In particular, Section 7 of the Intestate Succession Act prescribes 9 rules of distribution as follow:

Rule 1

If an intestate dies leaving a surviving spouse, no issue and no parent, the spouse shall be entitled to the whole of the estate.

Rule 2

If an intestate dies leaving a surviving spouse and issue, the spouse shall be entitled to one-half of the estate.

Rule 3

Subject to the rights of the surviving spouse, if any, the estate (both as to the undistributed portion and the reversionary interest) of an intestate who leaves issue shall be distributed by equal portions per stirpes to and amongst the children of the person dying intestate and such persons as legally represent those children, in case any of those children be then dead.

Proviso No. (1) — The persons who legally represent the children of an intestate are their descendants and not their next‑of‑kin.

Proviso No. (2) — Descendants of the intestate to the remotest degree stand in the place of their parent or other ancestor, and take according to their stocks the share which he or she would have taken.

Rule 4

If an intestate dies leaving a surviving spouse and no issue but a parent or parents, the spouse shall be entitled to one-half of the estate and the parent or parents to the other half of the estate.

Rule 5

If there are no descendants, the parent or parents of the intestate shall take the estate, in equal portions if there be 2 parents, subject to the rights of the surviving spouse (if any) as provided in rule 4.

Rule 6

If there are no surviving spouse, descendants or parents, the brothers and sisters and children of deceased brothers or sisters of the intestate shall share the estate in equal portions between the brothers and sisters and the children of any deceased brother or sister shall take according to their stocks the share which the deceased brother or sister would have taken.

Rule 7

If there are no surviving spouse, descendants, parents, brothers and sisters or children of such brothers and sisters but grandparents of the intestate, the grandparents shall take the whole of the estate in equal portions.

Rule 8

If there are no surviving spouse, descendants, parents, brothers and sisters or their children or grandparents but uncles and aunts of the intestate, the uncles and aunts shall take the whole of the estate in equal portions.

Rule 9

In default of distribution under rules 1 to 8, the Government shall be entitled to the whole of the estate.

Therefore, more attention and consideration should be attributed particularly when deciding on the respective distribution of monies to your choice of beneficiaries, failing which in the absence of nominations the distribution of a member’s CPF monies under the intestacy rules may go against the wishes and intention of a person.

3. Minor Beneficiaries

What if at the time of a member’s demise, the beneficiary is below the age of 18?

Section 25(3) of the CPF Act provides that:

“If any person nominated (other than a widow) is below the age of 18 years at the time of payment of the amount payable out of the Fund, his portion of the amount payable shall be similarly paid to the Public Trustee for the benefit of the nominated person.”

 In this regard, we advise members to consider their choice of beneficiaries wisely and understand that their nominations should not be a “one-off” decision, but a “living” decision that should be amended as circumstances change, such as with the turning of adulthood of their children.

However based on our experience, we understand that some clients have a smaller and more tightly knitted family comprising of their spouse and young children, in which event we will suggest to speak to one of our lawyers to set up a trust for such minors in order to protect their legacy.

Conclusion

 With CPF monies holding a large pool of a member’s assets accumulated over their working life, it may be prudent to speak to one of our lawyers where we shall arrange for a one-on-one wealth legacy screening session to be better able to advise you on your concerns, or make the necessary recommendations to you, where applicable.