HOUSING MATTERS
Finding Out Who Owns The HDB Flat When You Passed On
People often take for granted that they have a roof over their head. And most commonly we do live with our parents (for free) in the earlier part of our lives.
But have you ever wondered, whether you are still able to live in your parent’s HDB flat even after they have passed on? Scroll down for the answer.
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The hard truth
When a HDB flat is owned by two joint-owners and one of the owners passes on, the surviving owner would fully own the flat.
Say, for example, a family consisting of a father, mother, daughter, and son. They live in a 4-room HDB flat. The father and the mother jointly own the flat.
A month later, the father suffered a heart attack and passed away. With that, the mother now fully owns the HDB flat.
A year later, the mother was unfortunately killed in an accident. Since the mother is the owner of the flat, there will be no one else directly receiving full ownership of the flat.
The question now is; can the son and daughter still live in that flat?
The answer is no. Here is a graphic to explain the timeline of the example above.
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What if it is a sole owner?
When a sole HDB owner passes on, the HDB flat has to be sold and eventually the proceeds are distributed amongst the beneficiaries.
As stated above, when a sole owner of a HDB flat passes on, the flat will be liquidated. The sales proceeds of the flat will then be distributed to the rightful beneficiaries.
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Making sure of your Home Protection Scheme (HPS) coverage
First of all, you have to understand what HPS is.
It is mortgage-reducing term insurance that protects you and your family from losing your HDB flat due to an unfortunate event.
When a HDB flat is jointly owned, it is useful to know the coverage of your other joint-owner. That will determine the responsibility of the surviving joint owner on the remaining mortgage upon the demise of one joint owner.
Example
Husband and wife are joint owners of a HDB flat. Husband is working and the only one paying for the mortgage. Wife is a homemaker.
Their HPS coverage is both 50%.
The husband passes away and that leaves the obligation and responsibility of financing 50% of the remaining mortgage on her own. Since she is not earning an income, she may not be able to pay for the mortgage and eventually may lose the HDB flat due to non-payment.
Learning from that example, it is wise to make sure that both joint owners’ HPS coverage are both at 100%. With that, upon the demise of one of the joint owner, the mortgage will be paid up.
It will certainly help in leaving your loved ones a place to stay even when you are no longer there.
If you are financing your home with a bank loan, it will be beneficial if you purchase a term life insurance as an alternative to HPS.
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Holding on to your asset
After purchasing your first home, you will have a sense of accomplishment. But at the same time, the journey of your 25-year plan just started.
Reaching a goal might be achievable, but holding onto it is the real challenge.
Thus, be prudent and know your limits. You do not want to put most of your money on your home. You still have other responsibilities and commitments to attend to as well.
Upon achieving a lot of financial goals (bungalow, 7 digit figure in the bank account), you should plan on how you can maintain them and eventually on how to pass them on as well.
You do not want to lose all the money that your earned all these years to disappear in an instant.
The aim is not to reach number one but it is to stay at number one.
That is the end of the article and hope the information is useful. Do share it with your friends and families. Till next time.
Disclaimer
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
