When you hear the words presumption of advancement what comes to mind? Do you think of intestacy laws or inheritance laws perhaps? Are you even familiar with the phrase presumption of advancement?

Why should you be concerned about learning these three words? Because first, they can impact how your assets are distributed in the event of your death. And two because you may accidentally give away your properties without knowing it via this 3-word phrase.

What is a Presumption of Advancement?

A presumption of advancement is basically a gift made in advance. The Court calls its gifts given or presumed as given in advance usually by husbands to their wives or by parents to their kids. The presumption or the assumption, expectation, belief comes from the fact that husbands have a responsibility to provide for their wives, and parents have the responsibility to provide for their kids. Husbands are initially the ones who work for a living, in the traditional setting, and wives stay at home. So, naturally, the wife doesn’t have any means of earning assets on her own or provide for herself. She is dependent on her husband, and when a husband leaves behind assets for his wife, it is understood that these are gifts given to her. The same goes for children when parents buy a property and names their children as one of the owners with them; the Court would assume that the property is intended to be a gift.

The Court would assume that these assets given are advanced gifts. This means that regardless of whether or not she contributed to the purchase or acquisition of the asset or not.

When can a presumption of advancement be refuted?

A presumption of advancement can easily be rebutted if proof has been given to contest the assumption. Provided that these given proofs to rebut the presumption of advancement are substantial, logical and rational in nature.

The case below is a good example of a presumption of advancement that is rebutted.

In Low Gim Siah v Low Geok Khim [2007] 1 SLR 795, the deceased and his youngest son jointly owned various bank accounts totalling about $4.5 million. All the moneys came from the deceased. The Court had to decide whether the presumption of advancement should be applied so that the moneys in the bank accounts were prima facie a gift to the son; and if the presumption applied, whether it was rebutted on the facts. The appeal was made by the grandchildren of the deceased, Low Kim Tah, who died intestate. The Court of Appeal, however, found that the presumption was rebutted. The Court of Appeal, however, found that the presumption was rebutted. The Court found that the deceased had full and complete dominion over the moneys in the six joint accounts throughout his life and in fact was sufficient to rebut the presumption that the deceased intended for his son to have the moneys in the joint accounts upon his death. His son was not given the opportunity to operate the account, and the deceased had kept all the accrued interest and retained the power to close or deal with the bank accounts if he wanted to. Even then, he could have closed all the accounts and retaken possession of the moneys in these accounts without the knowledge and consent of his son. The Court distinguished the present case in stark contrast to cases where property, such as stocks or shares or real estate, are purchased in the name of the son or jointly with the son, thereby vesting the title in the son immediately  and requiring the consent of the son if the father wishes to regain title over the property. The Court decided that moneys in the six joint accounts were held by the son on a resulting trust for the Estate of the deceased.

What is a Resulting Trust?

In the example above the presumption of advancement was rebutted by the ruling of a resulting trust. A resulting trust is basically an asset given to you for administering for the benefit of others. A good example is your dad gives you a house in trust so that you can monitor it for the benefit of your mother. And resulting trusts usually bypass the intestacy laws of Singapore and even some inheritance law of other countries besides Singapore. This bypass is possible if there is enough evidence to prove that the assets or accounts were funded or bought entirely by the other party. An example would be a father buying a house, with his resources, and names his son as co-owner. All equity to the house belongs to the dad because he paid for the property, and the son contributed nothing.

When can a presumption of advancement NOT be rebutted?

The case Lau Siew Kim vs Yeo Guan Chye Terence. The children of the late Yeo Hock Seng filed a case against their stepmother for two properties, the Minton Rise property, and the Jalan Tari Payong property. The two properties are owned jointly by the deceased and his wife, with a right of survivorship. By virtue of the right of survivorship, the property passed to Mrs. Yeo and became the sole owner. The deceased’s children questioned this transfer of ownership and contested it saying that the properties do not belong to Mrs. Yeo but are only entrusted to her by their father. Their justification for this is that their father had contributed more to the property than their step-mother. After two rulings the court decided in favour of Mrs. Yeo by the presumption of advancement, based on the good relationship between the couple. The fact that the deceased bought the property as joint tenants with his wife with the right of survivorship shows that he intended for his wife to have the property even without a will to state it.

Avoiding Presumptions

As much as presumptions are okay and all, it is best to be clear about your intentions when it comes to your assets. Making a will ensures that no one can rob your loved ones of what you intend is for them. Your children from another marriage cannot harass your current wife after your death about properties you leave behind to her. Make a will or create a trust. Wills and trusts are your best mediums of communicating what you want to happen to your assets with your family. Estate planning is your safest route to protect your assets for your loved ones, and shield them from the hands of wrong persons.

Conclusion

A presumption of advancement has its good sides, but it is also risky since it can be contested with the slightest bit of evidence. So, if you want to protect your assets and make sure it goes into your intended hands then its a better choice to make a will. A legal counsel like Rockwills can help safeguard your assets.  It’s better to be safe than to gamble your loved ones’ future.