Righting a wrong

There's this interesting case which I discovered in yesterday's online version of The Star newspaper. My friends would know that I have a deep interest in estate planning, and this story is about the Singapore High Court allowing a Trustee to recoup money wrongly paid out to the beneficiaries of a Trust. 

What happened was that for nearly two decades, numerous descendants of a wealthy Arab trader in Singapore had been receiving more money from the family trust than they were entitled to, while others received less. The trust was set up by a Yemen-born trader, Shaik Sallim Talib, who made his fortune in Indonesia before settling in Singapore. Following his death in 1937, income from his extensive property portfolio continued to be distributed among his descendants.

The trust had been managed by British and Malayan Trustees since 1989, and one of the properties in question was the Treetops Executive Residences on Orange Grove Road. From November 2001 to November 2019, income was distributed incorrectly due to a misinterpretation of the trust’s terms. This resulted in some beneficiaries being overpaid and others underpaid, with disputes arising over S$1.46 million in erroneous distributions prior to May 2014.

On 16 July 2024, High Court Judge Hri Kumar Nair ruled that the trustee could recover the overpayments by adjusting future payments to the overpaid beneficiaries. Those who were overpaid would not need to return the money directly, but future payments to them would be reduced to compensate the underpaid beneficiaries. Justice Nair approved a plan to redistribute approximately $1.18 million, but there was still $286,000 in unrecoverable funds from overpaid beneficiaries who were now deceased.

This case marked the first time a Singapore Court had addressed a trustee's right to recoupment. In written grounds issued on the eighth of August, the Judge explained that the overpayments were caused by a misinterpretation of the trust's terms, and that the trustee was obliged to recover the funds as far as possible. He found the proposed recoupment plan to be reasonable and appropriate for implementation.

The dispute stemmed from conflicting interpretations regarding how the share of a beneficiary who died without offspring should be distributed. The trust's terms dictated that the net income from the assets would be divided among Sallim Talib’s children, with each son receiving two portions and each daughter receiving one. Upon their deaths, their shares would be passed down to their children also in a 2:1 ratio, continuing for subsequent generations.

In the last 20 years, four lineages of beneficiaries were broken. In each case, the trustee had distributed the deceased's share among all surviving beneficiaries, thus leading to the legal challenge. In November 2019, then Judicial Commissioner Vincent Hoong ruled that this approach was incorrect, deciding instead that the deceased's share should be distributed only among those descended from the same child of Sallim Talib. The trustee has since applied this interpretation.

Following this ruling, the trustee faced a lawsuit from more than 30 underpaid beneficiaries over the period from May 2014 onwards. The case was settled out of court in 2024, with the trustee agreeing to pay $1.19 million into the trust for redistribution, though no consensus was reached on recouping overpayments made before May 2014. In 2022, the trustee sought court directions on the matter and proposed a three-year recoupment period. Although a group of 20 overpaid beneficiaries opposed this, Justice Nair concluded that the reduction in their entitlements would be minimal.

Full story here.

Americans rushing to write wills

From the Daily Mail's online portal in the United Kingdom comes this story about Americans rushing to write their wills.

The story quotes online will company Gentreo saying that they had a 143% increase in business, week on week; Trust & Will saying that they have seen a 50% rise in uptake; and that 40 percent of Americans have their. wills. "People are getting a little scared," one expert in estate planning said Wednesday. One of those who has made a will in recent days said she "wanted to be prepared."

How about you: are you prepared too? Here's the Daily Mail story:

Americans are rushing to make online wills with some companies reporting a 143 per cent uptake in business amid the rising death toll as a result of coronavirus. 

A total of 823 people have died in the United States from the disease as of Wednesday. There are more than 60,000 confirmed cases. 

Online will company Gentreo told CNBC they have seen a 143 per cent week on week increase in business; Trust & Will has seen a 50 per cent rise. Around 40 per cent of Americans are thought to currently have wills place. 

New figures released on Wednesday show that New York, which is the epicenter of the US outbreak, now has 50 percent of the country's total confirmed coronavirus cases.

There are now more than 30,800 confirmed cases in New York and more than 17,800 in New York City alone. There are 285 deaths in New York, including 192 in the city.

Washington state, which was initially the epicenter following an outbreak at a Seattle nursing home, now has 2,472 confirmed cases and 125 deaths.

California is reporting 2,675 cases and 59 deaths, including the first child after a 17-year-old boy with no known pre-existing conditions died.

Texas has 1,150 cases and 14 deaths, while Florida is reporting 1,682 cases and 23 fatalities.

Attorney Alain Roman, who helps with estate planning, told Barrons: 'Seeing in the news that so many people are passing away worldwide and here in the U.S., people are getting a little scared.

'It’s getting them thinking about having a plan in place in case something happens to them.'

American Morgan Hopkins told CNBC she is 'willing to think about the worst case scenario' and 'wanted to be prepared' after getting an online will. 

She added: 'I started seeing stories of young people who are in otherwise perfectly good health in the hospital or in critical condition with the coronavirus.' 

But experts have warned those signing wills online to be wary of their legality. 

Leslie Tayne, founder of Tayne Law Group said the will will be valid if it 'meets all of the legal requirements of your state'.

Tayne added: 'However, since the vast majority of DIY wills are created and executed without any oversight from an attorney, a larger number of wills (may not be) executed in compliance with the proper will formalities, and that could end up making the will invalid.'

The US remains third behind China and Italy with the number of confirmed coronavirus cases.

The infection has killed nearly 20,000 people worldwide since the outbreak began in China in December.

The World Health Organization this week revealed a grim outlook for the United States, saying that the country could quickly become the global epicenter of the coronavirus pandemic given the 'very large acceleration' of confirmed infections.

Armed military personnel and NYC Medical Examiner's Office set up white tents and refrigeration trucks outside the hospital as health officials warned the city's morgues were nearing capacity.