In Singapore, 80% of us live in an HDB flat – and of those who do, 90% of us own our HDB flats. Typically purchased together with our spouse, an HDB flat usually represents the first step we take towards starting our families.
But have you ever wondered what happens to your HDB flat after you or your spouse passes on?
Most people assume that an HDB flat will be distributed according to a person’s will, if they have one, or, if they don’t have one, then it will be passed on in accordance to Singapore’s Intestate Succession Act.
For example, in the absence of any valid will, if a person passes on in Singapore, their assets would be split equally between their surviving spouse (50%) and their children (50%).
Read Also: Guide To Intestate Succession Act: What Happens To Your Estate When You Die Without A Will
A HDB Flat Does Not Always Follow The Intestate Succession Act
The Intestate Succession Act, however, does not always apply to an HDB flat.
This is because couples usually buy their HDB flats as co-applicants under a Joint Tenancy arrangement. And, under Joint Tenancy, the right of survivorship applies.
What this simply means is that when one of the owners pass on, the remaining owner, or even co-owners, is automatically handed ownership of the property. This applies regardless of whether or not a valid will has been left behind.
In other words, unlike most other financial assets that a person owns under his/her name, which is passed down through a valid will or, in its absence, the Intestate Succession Act, an HDB flat may fall outside both a will and the Intestate Succession Act.
Read Also: CPF Nomination: Do I Actually Need To Make One?
Tenancy-In-Common – An Alternative For You To Pass Down Your HDB Flat
Unlike a Joint Tenancy where co-owners have equal share, a flat owned under a Tenancy-In-Common agreement has a separate and definite share – which indicates the ownership share for each owner.
For example, a husband and wife can own an HDB flat under Tenancy-In-Common held 60% by the husband and 40% by the wife respectively. Under this ownership structure, either individual, if desired, can have a will that explicitly states how his or her respective ownership should be distributed when they pass on. In the absence of a valid will, the flat ownership will passes on according to the Intestate Succession Act.
The implication of that is that instead of the surviving spouse owning the HDB flat outright in the event of death to one spouse, the children of the couple would have some legal ownership of the flat. In the absence of children, the parents of the deceased flat owner will be entitled to a part of the home. All this is in accordance with the Intestate Succession Act.
Joint Tenancy Protect Co-Owners
A question that may be asked would be why HDB flats do not automatically fall under the Intestate Succession Act. The reason here is simple, the manner of how a HDB flat is owned is important.
Though they may appear similar, Joint Tenancy and Tenancy-In-Common are two distinct ways of jointly owning a flat
Below is a simple way of understanding the differences:
| What It Represents | What It Means When One Owner Passes On | |
| Joint Tenancy | The flat belongs to us. There are no separate shares for each individual owner. | Ownership will automatically be transferred to surviving owner |
| Tenancy-In-Agreement | The flat belongs to us. But we hold our shares in the flat individually | Ownership will automatically be transferred as per the will of the individual. In the absence of a valid will, it will be distributed in accordance to the Intestate Succession Act |
A Joint Tenancy protects the surviving owner, as it ensures that he or she would continue to have full rights to the HDB flat upon the death of his or her spouse. He or she can continue living in the flat, or choose to sell it off as he or she deems fit, without seeking the approval of anyone else.
A Tenancy-In-Agreement is better in protecting the rights of individual owners. It allows individual owners the option to distribute their share of ownership in a flat to a beneficiary of their choice.
For example, if an HDB flat is jointly owned by an elderly parent and his adult child who also has his own family, the adult child may prefer a situation where his ownership is passed down to his spouse or children in the event of his death, rather than for his ownership to be passed to the parent. When the event the parent subsequently passes on, the ownership of the HDB flat will not be automatically transferred to his immediate family members.
In some situations, an HDB flat may even be jointly owned by two individuals who are not related. In such situations, a Tenancy-In-Agreement arrangement would be more sensible.
Don’t Ignore Estate Planning
It’s impossible to say which ownership type is the best as that largely depends on individual circumstances. For example, a Tenancy-In-Agreement may not make sense for young married couples because it automatically means their parents become involved in the flat as partial owners if they pass on, rather than for the flat to be wholly owned by the surviving spouse.
The most important thing you can do is understand what happens to your assets when you pass on. If you are not comfortable with the default outcome, then you may want to consider other solutions so that your asset will be distributed based on what you want, rather than be decided by the law.
Read Also: What Happens To Your Money After You Sell Your HDB Flat
