Nov 5, 2007
Heirs of late co-tenant lose out under CPF
rules
I AM the administrator of my late brother's estate. He had a 97 per
cent share in a Tampines maisonette, while the co-tenant, his
acquaintance, held the remaining 3 per cent. The resale flat was
bought for $432,000 in 1999. My brother used some $69,000 of his
CPF money while the co-tenant contributed about $17,000.
After my brother's death, when I inquired about selling the flat,
HDB officers told me the proceeds from the sale would be
distributed according to share ownership. We subsequently decided
to sell the flat and found a buyer in June at a sale price of
$380,000.
Only at the final appointment to complete the sale in late
September, did I learn that the HDB and CPF Board do not take into
account the big amount of CPF funds my brother used to buy the flat
when computing his estate's share of the sale proceeds. Because he
is dead and has no CPF account, that money is treated as if it did
not exist.
To explain, after deducting some $323,000, mainly to pay back the
HDB loan, the co-tenant got back all his CPF money plus interest -
$21,500 - while the estate got back nothing of my brother's CPF
money.
This is contrary to what I was told by HDB officers who said the
sale proceeds after HDB loan repayment would be divided according
to ownership, that is, 97 per cent and 3 per cent. I was told there
would be no need for any refund of CPF money to my brother's
account, as he is dead, and proceeds would be returned in cash. At
no time was I told by these agencies that, under current
procedures, they would act as if only the surviving tenant would
get back what he or she had paid out in CPF money.
I have written to the CPF Board, which replied with a reiteration
of the present procedure - that on a member's death, the CPF
withdrawn towards an HDB flat ceases to be refundable. It did not
say why this money cannot be returned to the estate in cash.
I did not know this CPF money is not refunded to the deceased's
estate in cash. Thus, his beneficiaries, who may need this money to
carry on, lose out.
Take another example of two people who buy an HDB flat 50-50 as
co-tenants with each using $100,000 of his CPF money. One dies and
the flat is sold. After repayment of the outstanding mortgage,
there is a balance of $100,000. This entire amount will go to the
surviving tenant as a refund of CPF withdrawn. The beneficiaries of
the deceased flat owner will get nothing.
Ann Williams
http://www.straitstimes.com/ST%2BForum/Story/STIStory_173602.html
CPF "confiscating" people's CPF money??? If you're dead and your
CPF was used to buy a flat earlier, your CPF is gone and nobody can
get your CPF? Is that what the article was saying?