What happens to the assets given to my beneficiary(s) if he/she is an undischarged bankrupt?
TLDR version: Generally these assets (i.e. the inheritance given) have to be declared to the Official Assignee who will thereafter manage it accordingly.
As cases involving bankruptcies might be tricky, you might want to consider consulting a lawyer. You can do so by using the " Consult Lawyer" function in the platform and a lawyer will get in touch with you (charged separately).
"Bankruptcy is a legal status of an individual who cannot repay debts of greater than $15,000 and is declared a bankrupt by the High Court. The High Court usually appoints the Official Assignee to administer the bankrupt’s affairs in bankruptcy. These include the selling off of the bankrupt’s assets to repay his creditors, the registration of the creditors’ claims and the distribution of dividends to the bankrupt’s creditors."
Source: Ministry of Law, Insolvency Office Website -- Who is the Official Assignee
As an undischarged bankrupt, the property (assets) of the bankrupt are divisible among his creditors except for
- roperty held by you on trust for any other person
- HDB flats where at least one of the owners is a Singapore Citizen
- Monies in your Central Provident Fund (CPF) account
- Life insurance policies which are held in express trust for the benefit of your spouse or children
- Compensation awarded for legal actions in respect of personal injuries or wrongful acts against you
- The tools, if any, of his trade
- Such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family; and
- Any other property excluded under any other written law
For bankrupts who are nominated beneficiaries of the Dependants’ Protection Scheme (DPS), the compensation amount will be paid to the Official Assignee for the benefit of the bankrupt’s creditors. Where a DPS payout is made due to the permanent incapacity of an insured bankrupt, the CPF Board or the private insurer will write in for the Official Assignee’s consent for the release of the monies to the bankrupt.
Source: Singapore Statutes Online Website, Bankruptcy Act.
For assets beyond those stated above (e.g. specific insurance policies), do check with the respective institutions (e.g. the insurer) and/or your Official Assignee.
As inheritance does not fall in the exclusions, generally these assets (i.e. the inheritance given) have to be declared to the Official Assignee who will thereafter manage it accordingly.
As a comparison, similarly if your (CPF) nominee is an undischarged bankrupt, the CPF Board will work with your nominee's Official Assignee on the management of the monies that he receives.