When a family goes to court over a trust fund for kids

Executors of will unsure how the payouts should be drawn from late father's assets since there's no separate fund for this purpose

- Tan Ooi Boon

A father dying from leukaemia thought he was doing the right thing by writing a will that would provide his four young children with $15,000 each a year until they became adults, but the scheme hit a minefield of complexities that led to a bitter court showdown.

The devil was certainly in the details in this case, as the man had failed to allocate a separate fund for such payouts, so there was uncertainty over how the money should be drawn from his assets.

This, in turn, sparked bickering among his beneficiaries because the payments to the kids could reduce the size of their inheritance.

Beneficiaries from the same family might be able to resolve such issues amicably, but in this case, it became contentious as it involved the man's sister and his new wife on one side versus his children, who were represented by their mother.

The first part of his will was straightforward, as it involved the division of two properties.

He gave his 80 per cent share in the first property to his wife, who already owned the other 20 per cent. One-third of the second property was also left to his wife, another third went to his sister and the remaining third to his four children.

The rest of his assets such as cash, stocks and other valuables were split up in the ratio of 41 per cent to his wife and 59 per cent to his children. The children's mother, who is the man's ex-wife, is not a beneficiary of the will.

But it was his next wish — annual payments of $15,000 to each of the kids until they reached the age of 24 — that sparked the dispute. The one-sentence instruction was 145 words long but did not spell out clearly where the money should be drawn from.

The kids' mother argued that the $60,000 annual payment was a separate gift from those listed in the will, so these payouts would reduce the total inheritance to be distributed.