IT IS often said that blood is thicker than water. However, when money is involved, relationships between siblings can turn ugly.
The potential flashpoints include real estate, bank accounts, wills and so on. Whatever comes to mind, brothers and sisters have fought over it.
Chief executive of Grandtag Financial Consultancy (Singapore) Ben Fok said: 'There are many scenarios in which money can break down the bonds between siblings.
'For example, when a joint account is shared by a parent and only one child, it can trigger inheritance battles. When a parent dies, it is not uncommon for difficulties to arise over the disposition of personal effects. Another minefield is lending money to a family member.'
THE Sunday Times has compiled an X-File of legal disputes that show the legal and financial minefield that could lie under any family tree.
Case 1: Dispute over sale proceeds of an HDB flat
MR HARRY Lim (not his real name) bought an HDB flat in his and his mother's name.
He paid for it and allowed his mother and his three siblings to live there.
Mr Lim was later allotted another HDB flat.
As the rules clearly stated that he cannot own two flats simultaneously, he moved to his new one and had HDB transfer his share in the first flat to his mother by way of a gift, putting it in her name.
Mr Lim understood that the arrangement was for the mother to occupy the flat in her lifetime. He continued to allow his three siblings to stay there while he paid all the expenses and the mortgage instalments.
But when his mother died without a will, the three siblings asked the court to declare that they were beneficially entitled to the flat.
They claimed it belonged to the mother and should be distributed according to intestacy laws, which meant they would have a share in any property or its sale.
'This is a curious case whereby the outcome would have been very different depending on whether it was a private property or an HDB flat.
'Had it been a private property, the court would have found that the mother held the flat in trust for Mr Lim solely,' said Ms Lie Chin Chin, managing director of law firm Characterist.
Unfortunately for Mr Lim, HDB flats are subject to different laws which do not allow a flat to be held in trust unless the Housing Board has approved the arrangement first.
Mr Lim did not have this approval.
Even though the court noted his generosity to his mother and siblings in contrast to the siblings' own lack of contribution to buying the flat, it found the property to belong to the deceased mother and ordered that the sale proceeds be shared equally among the four children.
Case 2: Dispute over the inheritance of a bungalow
EVERYONE in the family had expected the father to leave the 36,000 sq ft prime district bungalow to his favourite son even though his daughter lived there and looked after her dad.
After the father made a will, the son told his sister that he was concerned for her as he would likely inherit the bungalow while she would be left out in the cold and was not entitled to public housing.
He proposed an agreement: If one of them were to wholly inherit the bungalow, it would be shared equally between them.
After the father died, it was found that he had left the bungalow to the daughter solely and not the favourite son.
The daughter then sought to rescind the agreement with her brother.
It was found that her brother had in fact secretly read the will and had realised that the bungalow was bequeathed to his sister solely.
He then fraudulently induced his sister to sign the agreement on the pretext that it was to her benefit since it was likely that he would be the beneficiary of the bungalow.
The court set aside the agreement, ruling that the sister had signed it due to her brother's fraudulent misrepresentation.
Case 3: Dispute involving a deceased mother's $3m estate
IT WAS an eventful two years.
Madam Irene Lee (not her real name) made a will appointing her son Aloysius Lim (not his real name) as the sole executor.
Shortly after, she transferred her business to him and sold her property - she also passed the sale proceeds to her son.
Madam Lee then amended her will, giving everything to her son.
After she died, Mr Lim's siblings alleged that the transactions - the business transfer, the property sale and the amended will - were invalid as their mother did not have the mental capacity to carry out the decisions.
Doctors testified and the court found that the mother either did not have the mental capacity or if she did, was under undue influence from her son.
The court ordered Mr Lim to refund the sale proceeds of the property to the mother's estate. He was also told to account for the assets - worth about $3 million - that belonged to the estate.
The estate was to be distributed according to intestacy laws as if she had not made a will.
Other common disputes
Maintenance of parents
Mr Stephen Teo, Alpha Financial Advisers' business director, observed that conflicts do not usually arise from the different cash allowances parents get from their working children.
It is the unexpected costs that cause problems.
'Conflicts usually arise from additional out-of-pocket expenses that are unexpected, such as medical expenses, funeral expenses, probate costs or long-term care expenses for the parents.
'The conflict can be more intense when the parents do not have any savings to absorb these costs,' he said.
One way to avoid such unpleasantness is through the pooling of monies from all siblings or as part of the allowances to parents, to purchase a hospitalisation and surgical insurance plan, added Mr Teo.
Loans to siblings
It can be tricky to say the least if a sibling asks for a loan.
They are hardly strangers so saying no can be difficult. However, if they are likely to be unreliable, no one likes throwing good money after bad.
So what should you do?
Mr Goh Yang Chye, the managing director of GYC Financial Advisory suggests that you should do so only if:
- You can afford to;
- You are not feeding a bad habit;
- You are willing to give selflessly based on personal values;
- You are willing to forgo the amount;
- Your spouse pre-approves the loan; and
- Your personal relationship can survive any business problems.
Guarantor to a debt
However, when a sibling serves as guarantor to another sibling's debt to the bank or other institutions, the issue becomes more complex.
Mr Goh said that many people may not be aware that when they sign on the hospital's consent form giving permission to provide treatment for your sibling (or anyone), you also accept legal responsibility for the medical fees and other responsibilities that come with it.
You become liable for your sibling's financial obligations so a bank, hospital or appointed collection agency will have the right to demand payments from you and bring you to court for defaulting on payments.
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