What will happen to mortgage debts and hospital bills after death in Singapore? Who will pay for them?
A mortgage is a legal document which the borrower offers to the lender as a collateral (i.e. a legal claim to the borrower’s property). If the mortgage is executed solely by the borrower, the family of the borrower will not inherit the mortgage. The property may be sold by the executor or administrator of the estate and the proceeds will be used to pay off the mortgage.
1. Private Property
If the mortgage is co-signed by another person, the person will inherit the mortgage. The surviving mortgagor will assume the sole mortgagor’s responsibilities.
If the property was paid using a bank loan, a grant of probate/ letters of administration will have to be obtained and the surviving mortgagor will bring the grant of probate/ letters of administration (i.e. the Court order allowing the executor/ executor to administer the estate) as evidence that he/ she has the rights to assume sole responsibility of the mortgage.
Your executor/ administrator should hire a probate lawyer to assist him/ her in obtaining a grant of probate/ letters of administration.
After the grant of probate/ letters of administration, the surviving mortgagor can discuss with the bank on how to pay for the mortgage.
In the event that the surviving mortgagor is unable to repay the loan, the mortgagee (lender) has the power to take over possession of the property.
You may also check if there is a mortgage insurance taken out as this may result in the insurance paying out a sum of money to help with the mortgage.
2. HDB Flat
On the other hand, if the inherited property is a HDB flat and CPF savings was used for paying the monthly loan, insurance would be provided under the Home Protection Scheme (HPS).
Under the Home Protection Scheme, the CPF board will pay the outstanding loan up to the insured amount. The Home Protection Scheme is compulsory for all HDB flat owners who use their savings from their CPF account for the payment of the loan.
The Home Protection Scheme does not cover homes which are private properties.
The Home Protection Scheme can be applied at the HDB hub or any HDB branch.
Family members can contribute to the mortgage debts of the deceased by having their name on the deed and be made a co-mortgagor.
Hospital Bills After Death in Singapore
The deceased’s hospital bills after death in Singapore can be settled using his/ her Medisave and/ or Medishield life (a compulsory health insurance plan for all Singapore citizens and PRs).
Insurance claims can also be made under the Dependants’ Protection Scheme (DPS).
In the event the amounts are still insufficient to pay off the deceased’s hospital bills after death in Singapore, the CPF funds of the deceased can be used by the nominee to pay off the bills. The beneficiaries of the deceased’s estate can also apply monies in the deceased’s bank account to pay off the bills.
After the deceased’s passing, the executor/ administrator of the estate should engage an experienced probate lawyer to assist with applying for the grant of probate/ letters of administration for the administration of the deceased’s assets.
Contact us at +6598330314 (whatsapp) for immediate assistance with applying for the grant of probate/ letters of administration.
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