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Cryptocurrencies, Fragmented Families Complicate Estate Distribution: RHTLaw Asia

The increase significance of cryptocurrencies as an asset for people, and families becoming more fragmented as divorces become more prevalent means that estate distribution will become more complicated without a will or estate planning, according to Nandakumar Renganathan, deputy head of RHTLaw Asia’s litigation and dispute resolution practice. We spoke to Renganathan to discuss about legacy planning, including issues faced by gay couples.

Name: Nandakumar Renganathan

Company: RHTLaw Asia LLP

Estate Planning Specialization: Structuring and dispute resolution

Base Country: Singapore

Service Style: Listener, Practical

Anything Interesting: Adventure crime book lover




Q: You are an equity partner at RHTLaw, how did it happen?

Renganathan: I was at another law firm at that time. There was a split in the firm and half of the lawyers decided to leave and set up RHTLaw. This is probably the first time in Singapore’s history where a major law firm splits in half. It was not easy.


The Startup Journey


We started the law firm with 40 lawyers, and we were going into new premises that we needed to take up. We had obligations to the staff that we brought along, and it was hard because we were starting from scratch. We didn’t have infrastructure. All we had was our laptops and handphones and we worked off hotspot because we didn’t have internet connection. We were working with nothing but client loyalty and self-confidence.


We were fortunate that business started coming in and we were able to sustain it and we grew from there. We just celebrated our 10th anniversary this year.


Q: What’s a typical client for you?

Renganathan: A lot of people that come to us tend to be in their 60s wanting to do some form of wealth planning for the next generation. But increasingly, we are also seeing people that are younger who are becoming more aware and putting more emphasis into balancing their wealth, especially if they are a high net worth individual. Their assets could be in the form of property, not just in Singapore but also in different jurisdictions. We’re also seeing cryptocurrencies forming part of the assets.


The biggest part of what I do is in relation to structuring of assets and advising in relation to assets where there is likely potential dispute. The solution could be wills, agreements in relation to those assets, for example, deed of family arrangement, or others.


Q: Are there any trends that are spurring people to do their estate planning?

Renganathan: One of the trends that we see are families becoming more fragmented.


In the early days, you have larger families of about seven or eight children. Some of the children are born to the family and others are adopted, sometimes informally. When you have passing of a parent, the question will arise as to whether the informally adopted children are entitled to part of the estate in the absence of a will.


Prevalence of Divorces


Over time, we found that families are becoming smaller and it became easier to identify the relationships. But in the last 15 years or so, divorces became more prevalent. You have people getting remarried again and the children with their new spouse or pre-existing children from their new spouse will become part of the family. If there is no will made, how the monies of deceased parents are going to be distributed will become more complex.


Q: How often is property an issue in terms of dispute cases that you do?

Renganathan: Property is a big part of disputes especially when the value of property and investments in property have gone up. But even in a declining market where disputes are fewer, you will still have issues and often in relation to contributions that have been made by people who bought the property.


Gay Couples


Think about it this way. When you are a married couple, you are probably not going to be talking about who owns what. Take a gay couple for example, gay couples function like any other couples. They buy property together but may not have an agreement between themselves on who owns what.


Reality is, when people are in love, they make a lot of decisions which are emotional and not in their best interests. When the relationship breaks down, that’s when things go wrong. This applies not just to couples, but also to parents and their children.


The question here is whether the shares of the property are properly defined and whose name is in the property? If there’s a dispute and you need lawyers to come in, then we have to try to establish the relationships, see if there’s a resulting trust that is formed in the relationship etc. What is recorded may not necessarily be what it is.


Q: You mentioned gay couples which is very interesting. Singapore doesn’t recognize gay marriages so what happens when a gay partner dies?

Renganathan: This is where there is a difference. Intestacy laws do not make provision for gay couples.


Unless there is a will protecting the surviving partner or there’s an agreement in relation to the asset or property investment, the surviving partner will not be protected. We usually recommend an agreement so that both partners will be in a better position in the event of a breakup.


I know a lot of them don’t think it through, just like married couples don’t think it through either. But at least for a married couple, you have intestacy law to protect the surviving spouse in the event that the partner passes away without a will, but it’s not there for those who are not in the traditional definition of marriage.


Q: What if I get married in Taiwan or other jurisdictions that recognizes gay marriages?

Renganathan: It becomes a bit more complex because issues of domicile will kick in as far as intestacy is concerned. The question that arises is if it’s better to get the letters of administration where the marriage is recognized.


Plan As A Family


There are complexities that come from family relationships that people don't realize. Even when we do Lasting Power of Attorney for our clients, we usually tell them, “Why don't you get the whole family involved?”. This is usually so that a common understanding can be arrived at between the key members of the family which hopefully minimizes the possibility of disputes in the future.



Q: Why? Are there more benefits of doing it as a family versus individually?

Renganathan: Because you need to appoint donees and the children, if they are over the age of 21, will have to think about how they want their parents to be taken care of if they lose mental capacity.


Getting older or having the potential to become senile aren’t the only reasons that cause people to lose their mental capacity. I've had cases where people were riding their bike in East Coast Park and ended up in a coma. Scenarios such as getting involved in some accidents and developing illnesses such as cancer can cause you to lose mental capacity at an early stage in life.


Closer Family Ties


When you do the planning as a family, it becomes more transparent and creates a greater deal of openness between the family members. I’ve seen families coming together, sitting down to do it and it creates a certain closeness when they know that they are responsible for each other as they nominate each other to look after them if they lose mental capacity.


In many ways, doing the LPA together contributes to family bonding and makes family relationships stronger.


Q: When it comes to your client group, what are the common issues or dispute when it comes to property?

Renganathan: The more common issue would be whether someone has some indirect contributions made towards the purchase of the property. You have cases where sometimes not all contributions are captured and documented. When an estate distribution is going to be made, they would want these indirect contributions to be priced in. The beneficiary will say, “Hey, hang on a bit, not the entire property belongs to the deceased, some part of it actually belongs to me.”


Property Inheritance & Disputes


There are also issues on how and when to sell the property. If the market is down, people may not want to sell the property because they can get better value if the property market goes up. But because nobody can time the market, it's hard to say when it should be sold. On the other hand, you may have some beneficiaries that may want immediate realization for their own family circumstances.


Something that’s becoming more prevalent is properties being owned by more than two people, either because they inherit it or they went to buy the property together. When that happens, the issues of getting everyone to agree on something becomes more pronounced and you may have to compel the other parties to sell or agree to hold.


Selling 1/4 of a Property


Just think about it from this perspective, if you own a quarter of a condominium, while you can sell a quarter of a condominium, is it easy to sell? You will likely have to sell the whole unit in order for you to be able to realize the benefit from that.


Q: Any issues that you think people should be aware of going forward when it comes to estate planning?

Renganathan: With cryptocurrencies kicking in right now, the dynamics have changed quite significantly. When you have a crypto wallet and you do not have your password, no one can get into that wallet.


Inheritance of Cryptocurrencies


You have to rethink where this information is kept and how this information is going to be checked, whether it's going to be kept at a certain location by certain people or are there other ways to keep it. I think cryptocurrencies and how to navigate this new economy is going to kick in for a lot of estates.


Succession Planning


The other issue is when the deceased is a shareholder of multiple companies. I have had scenarios where families are either unaware that a deceased is a shareholder of companies or don’t know what these companies do. Are they active businesses? Do they have employees?


A lot of time, the family doesn’t know what the business entails, especially if the business is run with other partners and without succession planning, it creates a lot of turmoil for the family.


Q: What is your interest? What do you do on weekends?

Renganathan: I usually spend my weekends reading books on adventure crimes like international espionage. If not, I will be spending time with the kids. Particularly with all these teenage suicides going on, I try to spend more time talking to them, finding out if they are stressed about anything and what they want.


Earlier in my career, I spent a lot of time doing pro bono work. Helping people was why I decided to become a lawyer. When I retire, I want to spend more time doing pro bono work to keep myself engaged.


This interview has been edited for length.


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Disclaimer: Nothing in this article or site should be construed as providing legal advice or advice of any sort. The information provided are general in nature and may become inaccurate over time. Please consult a professional for advice.


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