THE LEGACY HUNTERS - THE SINGAPORE SHOPHOUSE PODCAST

Special Guest on my Podcast : Amita Dutt on Estate Planning

• Season 1 • Episode 5

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“The best gifts come from the heart, not the store.”  -Sarah Dessen


When an inter-vivos gift (ie. a gift made during your lifetime) is not made properly, the Asset remains a part of the deceased’s estate. A testator’s carefully drawn estate plan went awry.

This is the 2nd Singapore Court case.

In March 2022 (and, on appeal, in February 2023) another case concerning a gift came before the General Division of the Singapore High Court (Family Division) and the Appellate Division of the High Court. It was decided that a gift of US$1.5 million from a mother to a daughter failed; WDS v WDT [2022] SGHCF 12 and WDT v WDS [2023] SGHC (A) 7.

In wanting to make a gift of money, a mother turned to her lawyer to draft the document and guide her in the gift- making process. In the meantime, while waiting for the lawyer to revert, the mother signed a letter drafted by a friend (“the letter”) which contained instructions to both her lawyers and bankers to execute all necessary fund transfers “now” for the gift of the money to the donee. The letter was then handed to the same friend of the mother’s, who kept it right up to the time the mother passed away. After that, the friend handed the letter to the donee.

Incidentally, the day after the letter had been signed by the mother, the mother’s lawyer sent a draft deed of gift for the mother’s approval. Unfortunately, the mother passed away before this deed was executed.


Why was the deed not executed asap?

Because there was a high chance that the deed would be challenged by the other children, the lawyer advised, and the mother accepted that she had to undergo a mental capacity assessment before the deed was executed. This was a process the mother was familiar with because this was the second time she was making a gift of money to this particular donee.

Before the assessment was done, the mother passed away.

The executor of the mother’s estate sought the Court’s determination of the alleged gift.


The law

In a previous case, the Judge had listed 3 elements to be fulfilled for a valid gift to be made during a donor’s lifetime:-

  • The donor’s (subjective) intention to relinquish the object at the time of gifting;
  • Certainty as to the subject matter of the gift; and
  • The delivery or parting with possession of the object from the donor to recipient.

In the WDS v WDT, both the executor and donee agreed that the deceased had intended to make a gift. Also, it was not disputed by them that there was no delivery of the money to the donee. Accordingly, all the 3 elements required had not been fulfilled.

However, the donee relied on an English cas

This Podcast is all about Legacy and Heritage Real Estate

It is also a platform for us to share what we read, heard and researched.

It also tells about Singapore Architecture Heritage and the Legacy behind the People & Places from the 15th Century right to current .

We focus on The Straits Settlement Era in COLONIAL SINGAPORE

We will have guest speakers and presenters on Legacy & Topics related to Family Offices, Private Banking & Legacy Planning .

www.shophouse.com.sg www.shophouse.club

We can be contacted at simon.monteiro@listsir.sg

Simon MONTEIRO Real Estate Associate in Singapore South Region - Sotheby's International Realty

Our One Sop Consultancy - Straits Shophouse Pte Ltd with Dr Julian Davison & Our Architectural Consultant Alvan Ng - An Architect turned Realtor.

Speaker 1:

Welcome back everyone to the Deep Dive. This time we're going to be looking at something that might seem pretty straightforward at first glance. You know gift-giving.

Speaker 2:

Yeah.

Speaker 1:

But as always here on the Deep Dive, we're going to dig a little deeper.

Speaker 2:

Absolutely.

Speaker 1:

And find out that there's a lot more going on than meets the eye, especially from a legal perspective.

Speaker 2:

Yeah.

Speaker 1:

And the inspiration for this Deep Dive is actually a recent court case out of Singapore.

Speaker 2:

Believe it or not, that really highlights how things can get complicated when it comes to gifting, especially when large sums of money are involved, which it's a legal term for gifts that are made during the giver's lifetime Okay, and this case really kind of highlights the importance of making sure that these gifts are executed properly, legally speaking.

Speaker 1:

Yeah, so let's jump into it. What happened in this case? I understand a mother intended to gift her daughter a very significant amount of money. We're talking $1.5 million US dollars. That's right, yeah, big money, big money, and things didn't quite go as planned.

Speaker 2:

No, no, not at all. It ended up going to the Singapore High Court.

Speaker 1:

Oh, wow.

Speaker 2:

Not once, but twice, oh my goodness. So you can already see it's kind of a sticky situation.

Speaker 1:

Yeah, and what's interesting too is this isn't an isolated incident. I understand that there have been similar cases that have come up recently in Singapore.

Speaker 2:

Yeah, in fact, there was one just back in March 2022 and another one even more recent in February of 2023.

Speaker 1:

So this seems to be something of a recurring issue, which, I guess, kind of speaks to people, maybe not being fully aware of the legal intricacies of something that we often think of as very simple right Giving a gift.

Speaker 2:

Exactly we think. You know, just sign a card, hand it over, you're good to go, yeah, but when you get into larger sums it becomes a lot more complex.

Speaker 1:

Yeah, so walk me through it. What exactly happened between this mother and daughter?

Speaker 2:

Well, the mother was working with her lawyer to draft a formal deed of gift. You know, all very official, Okay. But while that document was still being finalized, the mother, for whatever reason, decided to try and move things along herself.

Speaker 1:

Okay.

Speaker 2:

So she had a friend draft a letter to her lawyers and her bank instructing them to transfer the money to her daughter immediately. I guess she felt a sense of urgency.

Speaker 1:

Okay, so she had a friend draft a legal letter.

Speaker 2:

Yeah, a little bit of a red flag why?

Speaker 1:

not just wait for her own lawyer to handle it?

Speaker 2:

Yeah, you'd think right. That's what makes this case so interesting. There seems to be a misunderstanding about how these legal processes actually work.

Speaker 1:

Okay.

Speaker 2:

And it gets even more complicated because this letter she didn't send it directly to the lawyer or the bank, she gave it to another friend to hold on to.

Speaker 1:

Okay, so we've got friends involved now too. Did she give the friend any specific instructions on what to do with it?

Speaker 2:

Apparently not. It was never actually delivered to the lawyer or the bank.

Speaker 1:

Okay, so right off the bat, that's a problem.

Speaker 2:

Yeah, and then, to make matters worse, the mother passed away the very next day. The lawyer had sent the draft deed of gift for her to sign, but she never got the chance.

Speaker 1:

Wow, so the money never actually got transferred to the daughter.

Speaker 2:

No, no, it didn't. And that's where the whole legal battle began. The executor of her estate. They had to go to court to determine if that gift was actually valid or not.

Speaker 1:

So OK. So now we're talking about the legal framework for gifts, specifically in Singapore. What does the law say? How does it work?

Speaker 2:

So in Singapore there are three key elements that must be met for a gift to be considered legally valid. The first one is the donor's intention to give up ownership of the gift. It's got to be a complete transfer of ownership, not a loan or anything temporary. They have to genuinely intend to give that gift away.

Speaker 1:

Makes sense. What's the second element?

Speaker 2:

The second element is that the gift itself must be clearly identified. Seems straightforward, right, but you'd be surprised how often this becomes an issue. Right, but you'd be surprised how often this becomes an issue. And then, finally, there has to be actual delivery, or transfer of the gift from the giver to the receiver. Now, this doesn't always mean physically handing something over. It could be like a legal transfer of ownership, like, in this case, transferring funds from one account to another.

Speaker 1:

OK. So basically, it's not enough to just say, hey, I want to give you this gift. You have to take concrete actions, legal actions, to make it happen Exactly. So let's go back to this case. Where did things fall apart? Why didn't the daughter end up getting the money?

Speaker 2:

Well, let's think about those three elements we just talked about. The first one was the donor's intention. Now, it seemed pretty clear that the mother did intend to give the money right, but the problem was that formal deed of gift was never actually signed.

Speaker 1:

Ah, so even though she had the intention, it wasn't legally formalized Exactly.

Speaker 2:

And then you got the second element, the clear identification of the gift. In the mother's letter she didn't specify which bank account that $1.5 million was supposed to come from. Oh wow, so that created a huge legal problem right there. And then, of course, you've got the third element the delivery. We talked about how that letter was never actually delivered, just with a friend.

Speaker 1:

Right. So it seems like everything just kind of unraveled, because even though the mother had these good intentions, those intentions never really got translated into the necessary legal actions.

Speaker 2:

Exactly, and there's one more factor here that really complicates things the mother had actually agreed to undergo a mental capacity assessment before signing the deed of gift.

Speaker 1:

Okay.

Speaker 2:

But unfortunately she passed away before that could happen.

Speaker 1:

Oh, wow.

Speaker 2:

So now there were questions about whether she was fully capable of making that gift when she wrote that letter.

Speaker 1:

So so we've got. We've got a missing signature.

Speaker 2:

Right.

Speaker 1:

We've got an unspecified source of funds. Yeah, we've got a letter that never made it to its intended recipient. And then we've got questions about mental capacity.

Speaker 2:

It's like a legal obstacle course, right? It really highlights why, even for something like giving a gift, getting legal advice is so important. Lawyers are there to help you navigate all of these complexities and make sure that everything's done correctly from the beginning.

Speaker 1:

Yeah, that's a great point and you know I understand that the daughter actually tried to use a legal case from England to try to support her claim.

Speaker 2:

Yeah.

Speaker 1:

Arguing that you know her mother had essentially done everything that was necessary.

Speaker 2:

Yeah, she was trying to rely on a case called Rose v Inland Revenue Commissioners. That's a famous case that established this principle that a gift can be complete, even if some you know technicalities haven't been fully addressed, as long as the donor, the person giving the gift, has done everything in their power to actually make that gift happen.

Speaker 1:

Right, okay.

Speaker 2:

You know they've shown they really intended to give the gift.

Speaker 1:

So did that argument work.

Speaker 2:

Unfortunately for the daughter, the Singapore court said no, this doesn't apply here. They argued that the mother hadn't actually done everything necessary. We just talked about all those missing pieces.

Speaker 1:

Right. You know the unsigned deed the unspecified bank account, the undelivered letter, it seems like you know, even though, even though this mother had expressed this clear desire to give this gift to her daughter, yeah, it just wasn't enough to make it legally binding.

Speaker 2:

Exactly, and that's a that's a really powerful reminder that you know, good intentions alone aren't always enough when it comes to these legal matters.

Speaker 1:

Right, so having a lawyer involved seeking legal counsel is really really critical.

Speaker 2:

Especially when you're dealing with significant assets like this. And as we go further into this case, I think the question that might be on everyone's mind is what would a lawyer have done differently? What steps could have been taken to avoid this whole mess?

Speaker 1:

Yeah, that's a great question and that's exactly what we're going to explore next. Yeah, it's really interesting how even though she was, you know, working with a lawyer at the beginning- Right. It seems like things kind of went off the rails.

Speaker 2:

Yeah.

Speaker 1:

Because those legal processes weren't fully followed through.

Speaker 2:

Yeah.

Speaker 1:

So let's talk about the role of a lawyer in a situation like this.

Speaker 2:

Okay.

Speaker 1:

When it comes to gift giving, you know what difference can having a lawyer involved actually make.

Speaker 2:

Well, you know, a lawyer brings a lot of clarity to the process. You know they can help ensure that all those documents are drafted correctly, that they're executed properly. You know making sure signatures are obtained, things like that.

Speaker 1:

So it's more than just you know dotting the I's and crossing the T's.

Speaker 2:

Yeah, yeah, it's much more than that.

Speaker 1:

What else can a lawyer you know really bring to the table?

Speaker 2:

Well, one of the big things is that they can advise you on potential legal and financial implications.

Speaker 1:

OK.

Speaker 2:

They can help you think through all those things that you might not even be aware of. You know, and make sure that this gift really aligns with your, your overall financial goals and that it's not going to create any unintended consequences down the road.

Speaker 1:

Right, like the mental capacity issue in this case.

Speaker 2:

Exactly yeah.

Speaker 1:

Right, that could have been, you know, a big problem.

Speaker 2:

A big problem yeah.

Speaker 1:

I would imagine a lawyer would have recognized that and said hey, maybe we should address this sooner rather than later.

Speaker 2:

Right, they're trained to anticipate those kinds of issues, yeah, and guide you through the process proactively.

Speaker 1:

It sounds like you know, having a lawyer involved isn't about making things more complicated, but actually about simplifying things by just ensuring everything is done right from the start.

Speaker 2:

Exactly yeah.

Speaker 1:

What's a good analogy for that?

Speaker 2:

It's like, I guess, building a house.

Speaker 1:

Okay.

Speaker 2:

You wouldn't build a house without a blueprint, right, right, the lawyers kind of like your legal architect, you know.

Speaker 1:

I like that.

Speaker 2:

They provide that solid foundation, make sure everything's structurally sound.

Speaker 1:

Okay. So let's say, someone's listening to this and they're thinking, okay, you know, someday I might want to give a significant gift, right? What are the key takeaways from this case? What should they be thinking about?

Speaker 2:

Well, I think the biggest takeaway is don't try to do it yourself. You know, especially when you're dealing with large sums of money, you really need to consult with a lawyer, someone who specializes in things like estate planning or gift giving.

Speaker 1:

And what kind of questions, you know, should they be asking. What should they be looking for?

Speaker 2:

Well, you know you want to be clear about your intentions. Okay, what are your goals for this gift? You know what are you trying to achieve. And then you want to really understand those legal and tax implications. Are there any gift taxes you need to worry about? How is this going to affect your overall estate plan? You know a good lawyer is going to help you think through all of that.

Speaker 1:

So it's not just about the legal nuts and bolts, it's also about, you know, kind of that bigger picture strategic thinking.

Speaker 2:

Right, exactly.

Speaker 1:

Finding a lawyer who can kind of be both a legal guide and a strategic advisor.

Speaker 2:

Yeah, and an advocate.

Speaker 1:

Yeah.

Speaker 2:

You know somebody who's going to, who's going to really be there for you throughout the whole process.

Speaker 1:

OK, so this case really drives home the point that good intentions aren't always enough.

Speaker 2:

No, they're really not.

Speaker 1:

When it comes to legal matters, you got to make sure you're following the right steps.

Speaker 2:

Yeah, and you know the law can be tricky.

Speaker 1:

Yeah.

Speaker 2:

It can vary a lot depending on where you live, right? So finding a lawyer who's?

Speaker 1:

familiar with your jurisdiction is super important. And speaking of understanding the law, you know I remember the court in this case made a very strong statement about you know the dangers of trying to draft your own legal documents without professional guidance.

Speaker 2:

Yeah, they called it. You know unwise.

Speaker 1:

Right yeah.

Speaker 2:

They even referenced another case, Thambi Kanu Parvathi v Gita, where a homemade gift document was completely invalid. Wow, and the judge in that case said something really interesting. He said you know, if they had consulted a lawyer, they wouldn't even be in court because the lawyer would have made sure the gift was valid.

Speaker 1:

Right. And that's such a powerful point, isn't it? Because it really highlights the fact that you know relying on these DIY legal solutions can lead to these really lengthy and expensive and emotionally draining legal battles.

Speaker 2:

And it also brings up another point, which is that we've been focusing on the donor, the person giving the gift, but the recipient might also want to think about getting their own legal advice.

Speaker 1:

Oh, that's an interesting perspective. Yeah, why would the recipient might also want to think about getting their own legal advice. Oh, that's an interesting perspective. Yeah, why would the recipient need a lawyer?

Speaker 2:

Well, you know, it's just about making sure that they understand the implications of the gift.

Speaker 1:

Okay.

Speaker 2:

That they're protecting their own interests. You know a lawyer can help them navigate any potential tax liabilities. Clarify ownership rights.

Speaker 1:

Okay.

Speaker 2:

You know, just address any concerns that might come up.

Speaker 1:

So it's all about being proactive, you know, having that peace of mind knowing that everything's taken care of.

Speaker 2:

Yeah.

Speaker 1:

This whole conversation has been so enlightening. I never realized you know how much legal nuance there is.

Speaker 2:

It can be a minefield.

Speaker 1:

And something like gift giving.

Speaker 2:

Oh, absolutely yeah.

Speaker 1:

Which we often think of as as being so straightforward.

Speaker 2:

Yeah, we think it's simple, but the law can be very, very complex.

Speaker 1:

Yeah, and it seems like you know lawyers are. Are there not just for you know, these, these major legal battles, but even for these seemingly everyday matters?

Speaker 2:

Oh yeah absolutely, yeah, every day matters. Oh yeah, absolutely.

Speaker 1:

Yeah, and especially when it comes to, you know, something like a large gift, having that legal counsel can make the difference between a smooth transfer and, just you know, a complete and utter mess.

Speaker 2:

Yeah, exactly.

Speaker 1:

So this deep dive has been really interesting because it's really flipped the script on my perception of gift giving. Yeah, it's not just about finding the perfect present. Gift giving it's not just about finding the perfect present. It's also about you know, really understanding the legal framework that can help you make sure that your good intentions are actually carried out correctly.

Speaker 2:

That's a great way to put it.

Speaker 1:

So so far, we've talked about the donor's perspective, We've talked about the legal framework, We've talked about the role of lawyers. But what happens when you know, despite everyone's best efforts, things still go wrong? You know what are the consequences and what can we learn from those situations.

Speaker 2:

Yeah, that's a great point.

Speaker 1:

Because we've been focusing on prevention, but I think understanding what can happen when things go south is also really important.

Speaker 2:

It is.

Speaker 1:

So let's shift gears a little bit and take a look at what can happen when gifts go wrong, even with the best laid plans.

Speaker 2:

OK.

Speaker 1:

Yeah, it's. It's kind of a sobering thought that even when you, you know, try to plan things carefully, you get legal advice, things can still go wrong.

Speaker 2:

Yeah, unfortunately.

Speaker 1:

So when, when gifts do lead to these legal disputes, like in the case we've been talking about, what are some of the potential consequences?

Speaker 2:

Well, you know the fallout can be pretty significant. Okay, you know you're talking about potential financial losses. Obviously strained relationships.

Speaker 1:

Yeah.

Speaker 2:

And then, of course, you know lengthy legal battles Right, which can be costly and time consuming.

Speaker 1:

And I imagine the emotional toll is just as significant, if not more so.

Speaker 2:

Yeah, absolutely.

Speaker 1:

Especially when it involves, you know, close family members, like this.

Speaker 2:

Yeah, it can really, you know, fracture those relationships lead to you know, long lasting resentment and animosity.

Speaker 1:

And in this specific case, you know the daughter not only lost the gift that was intended for her, but you know she probably incurred all these legal fees as well. So it's a really kind of a stark reminder that these things can drag on and consume a lot of time and money and energy.

Speaker 2:

And you know it makes you think if there had been more open communication between the mother and the daughter, you know, if they had really talked through those intentions and the legal steps involved, maybe, maybe this whole thing could have been avoided.

Speaker 1:

It's a good reminder that communication is just as important as the legal documentation.

Speaker 2:

Absolutely. You know, open dialogue can really go a long way, and it's important to remember, too, that gifts are not just about the money. They often have a lot of emotional significance attached to them, and when these disputes arise, those emotions can really get amplified. It can get pretty messy.

Speaker 1:

And so I guess seeking legal advice isn't just about protecting assets, it's also about protecting relationships. It is, yeah, a lawyer can act as that, that neutral third party, you know, helping families navigate these conversations and make sure that everyone's interests are being considered.

Speaker 2:

Exactly they can. They can help you create agreements that outline everybody's expectations, obligations. Try to minimize the risk of conflict in the future.

Speaker 1:

This whole deep dive has really been eye-opening. I never really thought about gift-giving as having all of this potential for legal and emotional complexity.

Speaker 2:

Yeah, it's not something we often think about emotional complexity.

Speaker 1:

Yeah, it's not something we often think about. So, as we wrap up here, what?

Speaker 2:

are some of the key takeaways you want our listeners to remember. Well, I think the most important thing is to you know don't underestimate the value of legal advice when it comes to these significant gifts. A lawyer can really help guide you through the process, make sure everything's done correctly and help you avoid these potential pitfalls.

Speaker 1:

And, as we've been talking about, communication is key.

Speaker 2:

Absolutely.

Speaker 1:

Open and honest conversations with everyone involved.

Speaker 2:

Yeah, especially with family members.

Speaker 1:

And finally, I think it's important to remember that these legal precautions, they're not about mistrust or being negative.

Speaker 2:

Right.

Speaker 1:

They're about.

Speaker 2:

Protecting everyone.

Speaker 1:

Protecting everyone and making sure that you know your generosity is given in a way that is both meaningful and legally sound.

Speaker 2:

That's a great way to put it.

Speaker 1:

Well, this has been a fascinating deep dive yeah, it has Into the world of gifts and the legal issues that can sometimes come up. We hope you found it informative and maybe even a little thought-provoking.

Speaker 2:

I hope so.

Speaker 1:

So thank you for joining us yeah thanks for having me. And until next time, stay curious, stay informed and remember that a little legal knowledge can go a long way.

Speaker 2:

Absolutely.