No one ever wants anything bad to happen to our loved ones, but unfortunately, not everything is within our control and anything can happen.
Regardless of how we feel over the passing of someone we hold near and dear, there will always be debts. Credit card debts, phone bills, even funeral costs. Remember that if you need grief support, do call up the Singapore counselling hotline. They are well equipped to listen to your grief and advise you on what to do next. We also have a bit of information that could be useful for you if you’re unsure of your next step here.
Remember that there are always people you can count on; you only have to reach out.
When it comes to dealing with debts of your deceased loved ones, you have to determine what the debt is. There are several different types of bills and debt; some have to be paid, and some can be offset by governments or companies will just cancel and wipe the debt.
When it comes to the ones that have to be paid, these are in the form of a written agreement between the deceased and the creditor. These can range from banks, institutions and real estate managers, all the way down the simple, written/type written letter that has the official signature or seal of the deceased.
In cases like these, even a written letter to a friend (i.e. a friendly, non-bank loan) has to be honoured by the deceased’s family or next-of-kin. Typically, the assets of the deceased would usually be liquidated and used to pay off whatever debt that is owed to the creditors (this also means these written agreements and contracts). Unfortunately, should that amount not be enough, the next of kin will have to honour these debts and repay to whomever it is owed to.
In the same vein, when a loved one passes, as mentioned above, the assets and money will be passed on to next of kin, typically the surviving spouse as well as their children (if any). In Singapore it is a pretty unique case; the CPF will also be passed to the surviving spouse (if nominated to receive in full) or it can also be passed to any surviving children, though different laws will apply for them.
Thankfully, should there be no debts; any assets from investing via the Central Depository (CDP) will then be converted into an estate account and passed on to the next of kin. The assets will not be liquidated unless otherwise instructed to do so, or if the surviving spouse decides to.
There are cases where the deceased could have taken on a large amount of debt, and is the sole breadwinner of that family. In such a case, do inform the relevant authorities for help! There are people in the government sector willing to help out (For example, the Ministry of Social and Family Development, MSF)
Of course, there are other kinds of debts as well, such as the unwritten, peer to peer loans. These do not have to be upheld of course, at least in the eyes of the court of law. However, this could possibly affect any relationships with the deceased’s friends or family. In this case, it is really up to the discretion of the surviving spouse.
There are certain laws and lawyers who will better be able to advise on such matters as it can get relatively complicated (especially so if the deceased has no formal will, and has a rather large immediate family).
That said, never worry. Just know that yes, you would inherit the debt of your deceased loved one, ONLY if there is a huge amount of debt that cannot be covered by their assets (which is rarely the case actually). Just make sure to inform the relevant companies to cancel the credit cards, car loans and whatever else that can be slashed to reduce any debt that is taken on by you.
If you need help, never hesitate to contact the government agencies for help too! The people working in MSF would know how best to help you in such a situation, and direct you to other agencies who would also be able to help settle any debts and asset liquidity distribution.Recommend0 recommendationsPublished in