Paper 1 · Land Law
Trusts, Gifts, Succession & Future Interests in Property
Not every property transaction is a straightforward sale between two adults. A parent may want to buy for a young child, an owner may gift a flat to a relative, and every owner will eventually die — triggering questions about who inherits and how the property can be sold. This lesson covers the CEA competencies on trusts, gifts, succession and future interests, all of which regularly appear in RES scenarios and in real practice.
Legal vs beneficial ownership: the trust concept
A trust splits ownership of property into two parts. The trustee holds the legal ownership — their name is on the title — but they hold it for the benefit of someone else. The beneficiary holds the beneficial (equitable) ownership — they are the person truly entitled to enjoy the property. Property held this way is said to be held on trust.
A common reason to use a trust is that a minor (a person under 21) cannot hold land in their own name. If a parent wants a property to belong to a young child, an adult trustee holds the legal title on trust for the child until the child comes of age.
| Type | How it arises | Typical use |
|---|---|---|
| Express trust | Deliberately created by the owner, usually in a written trust deed or will | Parent settles a property on trust for a child |
| Bare trust | Trustee holds property with no active duties, purely for the beneficiary who is absolutely entitled | Nominee holding title for the true owner |
| Resulting trust | Implied by law, e.g. where one person pays but title is put in another's name | Contributor is treated as beneficial owner |
ABSD when property is put on trust
Buyers sometimes assume that buying "on trust" for a child avoids Additional Buyer's Stamp Duty (ABSD). It does not. Under the ABSD (Trust) rule, when residential property is transferred into a living trust, ABSD is payable up front at the point of transfer — because at that moment there may be no identifiable beneficial owner to assess in the normal way.
A remission (refund) of the ABSD (Trust) may be available where all the beneficiaries are identifiable individuals and certain conditions are met, but the ABSD must still be paid first and then claimed back. The exact rate and the precise remission conditions change over time, so always confirm the current position with IRAS rather than quoting a figure to a client.
The trap
A parent tells you they will buy a condo "in trust for my 5-year-old daughter" to sidestep ABSD, since the child owns nothing. This does NOT avoid ABSD. The ABSD (Trust) rule requires ABSD to be paid up front when residential property goes into a living trust. A remission may later apply if all beneficiaries are identifiable individuals, but the duty is due at transfer. Never advise a client that a trust is a free pass on ABSD — direct them to IRAS or a lawyer for the current rate and conditions.
Gifts of property
A gift is a voluntary transfer of property for no payment (or below-market payment). Even though no money changes hands, a gift is not free of duty: stamp duty is generally assessed on the market value of the property, and Buyer's Stamp Duty (and any applicable ABSD) can still apply to the person receiving it, based on their own profile. Advise clients that gifting property has real stamp-duty and eligibility consequences and needs proper legal and IRAS advice.
Succession: wills, intestacy and grants
When an owner dies, their property passes by succession. If the deceased left a valid will, the named executor applies for a grant of probate, which confirms their authority to deal with the estate. If there is no will, the person died intestate, and a relative applies for letters of administration to become the administrator. In both cases, the executor or administrator can then sell the property on behalf of the estate — the buyer deals with them, not the deceased.
For non-Muslims who die intestate, the Intestate Succession Act governs distribution among family members — broadly, a surviving spouse, children and parents take defined shares depending on who survives (for example, a spouse and children share the estate, with parents inheriting where there are no children). The exact fractions depend on the family structure, so describe the principle and confirm specifics with a lawyer. Muslims in Singapore are instead governed by Syariah law / faraid rules of inheritance, administered under the applicable Muslim law framework.
The big one: what death does to co-owned property
How co-owners hold property determines what happens when one of them dies — and it is the single most testable point in this topic.
| Manner of holding | On death of one co-owner | Passes through estate? |
|---|---|---|
| Joint tenancy | Right of survivorship — the deceased's interest passes automatically to the surviving joint tenant(s) | No — it falls outside the estate; no will/intestacy applies to it |
| Tenancy in common | The deceased's share passes under their will or, if none, under intestacy | Yes — it forms part of the estate |
So a joint tenant who dies leaves nothing to distribute in that property — the survivor simply owns the whole. A tenant in common who dies leaves their defined share to be dealt with by the executor or administrator. Future interests (e.g. an interest that only takes effect at a future date or on a future event, such as a beneficiary becoming entitled once they reach a certain age) may also affect who can deal with the property and when.
Exam takeaway
Trusts split legal ownership (trustee) from beneficial ownership (beneficiary) and are needed when a minor is the intended owner — but the ABSD (Trust) rule means ABSD is paid up front (remission possible if all beneficiaries are identifiable individuals; confirm with IRAS). On death: joint tenancy passes by survivorship outside the estate, while a tenancy in common share passes by will or intestacy, and buyers of estate property must check for a grant of probate or letters of administration.
- Joint tenant dies: survivorship applies — the surviving joint tenant automatically owns the whole; the deceased's family cannot claim that interest.
- Tenant in common dies: the deceased's share becomes part of the estate and passes by will or intestacy; co-owners do not automatically absorb it.
- Buying from an estate: the seller (executor/administrator) needs a grant of probate (if there was a will) or letters of administration (if intestate) before they can validly sell.
- Minor as buyer: a child cannot hold land in their own name, so a trust with an adult trustee is required.
- Buying "on trust" for a child: the ABSD (Trust) rule applies — ABSD is payable up front on transfer into a living trust; do not treat a trust as an ABSD avoidance route.
- Muslim estates: distribution follows Syariah / faraid, not the Intestate Succession Act — different shares apply.
Worked case study · Section B style
Mr and Mrs Lim bought a private condominium together and hold it as joint tenants. Mr Lim passes away, leaving a will that gives "all my property" to his son from a previous marriage. The son now insists he is entitled to Mr Lim's half of the condo. Mrs Lim asks you what happens to the unit.
- A.Mr Lim's half passes to the son under the will, so the son and Mrs Lim become co-owners.
- B.By the right of survivorship, Mr Lim's interest passes automatically to Mrs Lim, who now owns the whole unit; the will does not apply to it.
- C.The condo must be sold and the proceeds split between Mrs Lim and the son.
- D.The unit passes under the Intestate Succession Act because a will cannot override a joint tenancy dispute.
Show answer & explanation
Answer: B. Because the Lims held the condo as joint tenants, the right of survivorship applies on Mr Lim's death: his interest passes automatically to the surviving joint tenant, Mrs Lim, and never forms part of his estate. His will can only dispose of assets in his estate, so it has no effect on this jointly held unit. The son therefore takes nothing from the condo (option 1 is wrong — survivorship overrides the will; options 3 and 4 misstate the law). This is why the joint tenancy vs tenancy in common distinction is critical for salespersons to flag.
Ready to test yourself?
Practise exam-style questions on Land Law — with instant answers and explanations.
Practise Land Law questions →Common questions
- Does buying a property in trust for my child avoid ABSD?
- No. Under the ABSD (Trust) rule, ABSD is payable up front when residential property is transferred into a living trust. A remission may be available where all beneficiaries are identifiable individuals, but the duty must be paid first and then claimed back. Always confirm the current rate and conditions with IRAS.
- What is the difference between a grant of probate and letters of administration?
- A grant of probate is issued where the deceased left a valid will — it confirms the executor's authority to deal with the estate. Letters of administration are granted where the person died intestate (no will), appointing an administrator to distribute the estate. A buyer purchasing from an estate should confirm the correct grant is in place before completing.
- If one co-owner dies, does their share always pass under their will?
- Only if they held the property as tenants in common — then their share forms part of their estate and passes by will or intestacy. If they held as joint tenants, the right of survivorship applies and the interest passes automatically to the surviving joint tenant, outside the estate, regardless of any will.
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