When Madam Lim Lye Kiang sought to claim the $102,000 from CPF which her late sister had left her, she would never have expected that the CPF Board transferred the money to the OA (Official Assignee) to pay off her debt, even if she has been discharged from bankruptcy. (reported in today’s Straits Times “Bankrupts: CPF inheritance goes first to…“)
Although an individual’s CPF investments and cash balance in his CPF Investment Account are protected from creditors, the judge “held that the protection extended to the money of CPF account holders did not extend to nominees like Madam Lim, and that the money could thus go to the OA to settle debts.”
This case again highlighted the importance of proper estate planning. As CPF Board commented, ‘When making a nomination, he should consider who is to receive his CPF savings and how much each nominee should receive, taking into account family and other circumstances‘.
It could never be Madam Lim’s sister’s wish to give her life savings of $102,000 to Madam Lim’s creditors, but this was the result, sadly. This disastrous effect could be avoided if a proper discretionary trust was set up. For proper planning, you should seek advice from professional estate planners.
Like this article? Subscribe for More
Simply leave your email for more money and investment tips.