6, 2004 SUN
Q: MY BROTHER, who was a bachelor, died recently at 55 without leaving a will. He left behind some money in his bank account and there were also some funds in his CPF account.
had appointed my deceased father as his next-of-kin. My mother is still living
and there are four married siblings around. What happens, therefore, to the
money that he has left behind?
were told that he has some personal debt. Are his siblings required to settle
I PRESUME that your brother
nominated his father to be the beneficiary of the CPF money.
the nominee has died, it is deemed that there is no nomination and the CPF
savings will be forwarded to the Public Trustee for distribution to the
deceased's family members in accordance with the law.
the Intestate Succession Act, where a person dies without a will, and leaves no
spouse or child(ren), the parent(s) will be entitled to the whole estate.
where there is no surviving parent will the sibling(s) be entitled to the estate. Your
mother is therefore entitled to the whole estate.
should see a lawyer to help her apply to the court for Grant of Letters of
Administration to deal with the estate and, in particular, the money in the
if the assets left behind by your brother are relatively small, your
contact the Public Trustee to administer the
Public Trustee can be contacted at #05-11/06-11, The URA Centre, East Wing, in
Maxwell Road. A fee is payable.
note that the creditors have to be paid off first before the money is
distributed to the beneficiary.
creditors may take court action against the estate to recover their debts.
Kit Soon .
Chan Jer Hiang & Co
MY SISTER, who is in her late 20s,
has credit card debt of $35,000 and a cooperative loan of $20,000.
has been servicing the latter dutifully as the instalments are deducted directly
from her salary.
also has a renovation loan of $8,000 which is serviced regularly every month.
for her credit card bills, she pays the minimum every month as she has every
intention of repaying the debt.
the bank declare her a bankrupt with these amounts outstanding, even when she
pays the minimum dutifully?
she were declared a bankrupt, what would happen to her job in the private sector
or with the Government? She is worried about her job.
it affect her chances of finding a new job, if necessary?
So long as your sister continues
to service the loans, it would be most surprising if a bank would wish to make
her a bankrupt. After all, banks and financial institutions derive quite
substantial income from loans.
long as the chicken continues to lay the eggs, there is really no reason to
slaughter it as that is what happens when bankruptcy is proceeded with.
if she were a bankrupt?
of all, while the Official Assignee (OA) is not automatically entitled to
receipt of the bankrupt's salary, there is a duty requiring the bankrupt to
account for money and property received during the bankruptcy and to hand over
to the OA what is not required for maintaining himself and his family.
that is an indirect way to obtain part of the salary.
is, however, a specific provision in the law to the effect that if the bankrupt
is a public officer, the OA must apply to the court for a payment order as only
so much of the salary as may be decided by the court is available to the OA for
distribution among the creditors.
bankrupt is disqualified from practising certain professions such as law,
accountancy, and architecture.
cannot be employed by a lawyer in his practice without prior approval of the
court, and an accountant cannot employ a bankrupt without the consent of the
Public Accountants Board.
from the specific restrictions mentioned above, there is no reason the bankrupt
cannot get another job as she will be able to contribute to an organisation with
her skills and labour.
Amolat & Partners
provided in this column is meant for information only and not as a substitute
for comprehensive professional advice.
Just how good investments are structured deposits
offered by the banks? High early payout but so-so returns.
The returns seem alluring when compared to measly interest on savings accounts,
but wait - there's more than meets the eye.
The Sunday Times - JUNE 6, 2004 SUN.
By Leong Chan Teik.
STEP into a bank, and chances are there is a big placard by the doorway
screaming for your attention.
You reach the teller, and after eyeing the cash pile in your passbook,
she may point you ever so casually to some brochures at the counter,
or refer you to financial planners in the corner.
The placards and brochures tout high payouts on investment products
known as structured deposits.
It is '10.5 % interest guaranteed' in the case of United Overseas Bank's product,
and '10 % payout after just three months' in the case of DBS Bank's offering.
That sounds great when the annual interest on savings accounts, in contrast,
is less than 0.5 %.
But financially savvy investors say there is more to these products than meets the eye.
On the face of it, they do serve a purpose. They target people who are bedeviled
by a fear of losing money but who also salivate for a high return.
The problem is, when it comes to investments, 100 % safety and sizzling
double-digit gains do not quite go hand in hand.
Mr Ben Tai, OCBC Bank's vice-president of wealth management
(treasury and structured products), says that generally, the interest gain to expect
is a few percentage points higher than that of conventional fixed-deposit accounts.
As an example, in 11 out of 13 of OCBC's bond-linked structured deposits
which have matured, the return was 1.8 % per year, compared to 0.5 %
for a six-month fixed-deposit account.
Structured deposits have attracted overwhelming response from consumers,
though critics say it is sometimes for the wrong reasons.
For one thing, there is clever marketing in the form of the enticingly high early payouts,
says Mr William Cai, a chartered financial consultant.
For another, consumers themselves do not understand how the products work
but they are drawn to the allure of potentially higher returns.
About two months ago, the Monetary Authority of Singapore said that the practices
of institutions marketing those products have been in some cases 'less than satisfactory'.
It pointed out three areas of concern:
1. Inadequate disclosure of risks of these products;
2. Excessive focus on potential returns including the use of unrealistic headline rates; and
3. Marketing of such products as conventional fixed deposits.
Many structured deposits have key features:
High early payout: An example is the 10 % payout after three months
in the DBS Dynamic Account.
Some people wrongly equate such a payout as interest earned in the conventional sense.
The initial payout is one-off and not repeated every year, which is unlike what
some people imagine. In many cases, you get nothing in subsequent years.
Protected capital: This is music to the ears of people who are afraid of losing money.
The capital is protected by a simple process. The bank will invest most of your money
in bonds. The returns from bonds are what enable the bank to return you 100 %
of your capital.
The rest of your money which is not invested in bonds, typically 20 or 30 %,
is put into riskier assets such as shares and stock market indexes.
The DBS Dynamic Account currently offered in the market, for example,
will be invested in shares of five companies: Cisco Systems, CNOOC,
Intel, LVMH Moet Hennessy Louis Vuitton and Newmont Mining Corp.
This is the engine that is supposed to give you an enhanced return if the shares perform.
Long lock-in period: You are required to stay invested for, typically, five years
or more. It can be as long as 10 years in the case of the DBS Dynamic Account.
You get back at least your capital plus the initial payout if you stay the course.
You could get back less than your capital if you withdraw your money prematurely.
Worse, you may have to pay a penalty, in some cases.
Possible early termination: The bank can terminate the products early
if their underlying investments perform well.
Here, you are likely to enjoy better returns than if the products run their full course.
Together with the initial 10 per cent payout, your gain is effectively 9.43 % per year
if the bank terminates the product in the 14th month.
The longer it takes to terminate, the more the return shrinks.
If the Dynamic Account matures only in the 10th year, your return works out to a modest
1.5 % per year.