How do I specifically allocate a property into a testamentary trust for the living benefit of my spouse?
This article is for private properties (e.g. condominium, landed property). You will need to seek approval from HDB if you intend to put the HDB flat in a trust.
There may also be implications on ABSD and property count. For example, there are no Additional Buyer Stamp Duty (ABSD) for transferring property into a Trust upon death (e.g. Testamentary Trust) nor any inheritance tax in Singapore. However, it may increase the property count of the beneficiary which can then affect their ABSD in buying future property.
Do note that HDB regulations do change over time and cases are reviewed on a case by case basis. Such an arrangement does not guarantee that it will not affect the beneficiaries' HDB eligibility. The trustee will have to work with the beneficiaries accordingly should such circumstance arise.
If you are considering placing your property into a testamentary trust, we strongly recommend that you check out this other article on Property Related Estate Planning Issues.
In the Appoint People page, add a testamentary trust and configure the name of the testamentary trust, the Trustee(s), and the Trustee Powers accordingly.
You will need to allocate the property to the testamentary trust.
Under the Trust Beneficiary section, add the spouse and you can select the payout as "Others" and key in:
-- see Additional Trust Instructions below --
Under the Remainder Beneficiary Section, add in the remainder beneficiary(s), who will ultimately receive the property or the proceeds of which (if instructions were given to have the property liquidated upon termination of the trust).
Toggle on “Additional Trust Instructions” and key in the following (please edit accordingly):
This paragraph will take precedence over any inconsistent or conflicting instructions in this Testamentary Trust.
My intention is for the property located at {address} to be held under this Testamentary Trust for the living benefit of my {Relationship}, {Name}, {Identification Number/details}.
{Property Management Clause}
{Termination Clause}
Property Management Clause Examples
This clause is meant to outline what to do with the property.
The property is meant to provide rent-free accommodation for my {Relationship}, {Name}. I request that the property not be partially or fully rented out while my {Relationship}, {Name}, is residing in it.
OR
The property is meant to generate income for my {Relationship}, {Name}. I request that the property to be rented out to provide income which is to be given to my {Relationship}, {Name}.
Termination Clause Examples
This clause is meant to determine the conditions for the termination of the trust, typically chosen when the spouse has passed on. It will also outline what to do with the property then.
Once my {Relationship}, {Name}, has passed away, the ownership of the property located at {address of property} shall be transferred to the Remainder Beneficiary(s) according to the proportions specified in the section on “Balance of the Trust Fund” above. This Trust shall be terminated and the Remainder Beneficiary(s) shall collectively decide the future of the property. Any remaining balance of the Trust Fund shall be distributed to the Remainder Beneficiary(s) as per the section on “Balance of the Trust Fund”.
OR
Once my {Relationship}, {Name}, has passed away, the property located at {address of property} shall be liquidated, and this Trust shall be terminated. The remaining balance of the Trust Fund, including the net proceeds of the property, shall be distributed to the Remainder Beneficiary(s) as per the section on “Balance of the Trust Fund” above.