DABS: The Danish rules for inheritance and guardianship for Danes living in Singapore and abroad

Photo credit: The New York Times

ScandAsia recently had the privilege of attending the Danish Business Association Singapore (DABS) webinar covering Danish rules for inheritance and guardianship for Danes living in Singapore. 

The event led by Danish lawyer, Karina Sejersbøl Christiansen from Advodan in Næstved, Denmark, focused on what happens to Danish children and heirs in case something happens to their parents while living in Singapore; who inherits what from you and why it is so important to have a will in place. As a network for Danish companies and professionals based in Singapore, with a focus on sharing experiences and knowledge of doing business in Asia, DABS gave its members a very unique opportunity to become more knowledgeable regarding this very important issue.

Karina Sejersbøl Christiansen has worked in Denmark as a deputy judge for 14 years and 10 years as an attorney at law. Karina Sejersbøl Christiansen is primarily involved in creating wills, marriage contracts, and future proxies, as well as divorce and child custody cases.

The event was conducted in Danish and started with a brief introduction before Karina Sejersbøl Christiansen took the lead and guided the participants through the somewhat complex scenarios. When the parents are Danish and the child has a Danish passport, the Danish rules apply, as the children will not have legal residence in Singapore in the long run.

To break down the most important aspects of who inherits what from you following the Danish rules, Karina Sejersbøl Christiansen explained the construction as seen below.

According to Danish rules, who inherits from you?

Unmarried people have the following succession: Children, parents, siblings, grandparents (or their children if grandparents are deceased) Aunts, and Uncles. Cousins are not automatically heirs and only inherit if a will is in place. If no heirs are found, the Danish state inherits to which Karina Sejersbøl Christiansen pointed out that this gives more the reason to make a will.

Karina Sejersbøl Christiansen also emphasized contrary to what some people assume, unmarried couples living together do not inherit from each other no matter how long they have lived together and in this case, it is important to make a will. 

Married couples have the following succession: Spouse and children. 

Who inherits what from you?

This case is very complex for Danes living abroad. In general, no overall rule applies globally which is why it is important to make a will in every country you have assets in, that specifies the same wishes. The estate must be settled according to the rules that apply in the country where you reside at the time of your death. If you have assets in Denmark, you can ask to have the estate referred for settlement in Denmark. This does not mean that the estate must be distributed according to Danish rules, but that, for example, a Danish probate court / appointed trustee can be responsible for realizing the assets, which is easier than if it has to be done from abroad.

It is therefore very important to familiarize yourself with the current rules in your country of residence and the country you have assets in. Different rules and regulations apply in different countries and Karina Sejersbøl Christiansen who is an expert in Danish rules emphasized that the following is regarding assets in Denmark as those are settled and distributed according to the Danish rules. 

How assets are distributed in Denmark 

Assets in Denmark for married couples are settled as community property where the spouse owns ½ and the deceased owns ½. Spouse inherits ½ of the deceased’s part of the estate and children inherit the remaining ½. Overall it means that children in total inherit ¼ of the estate and in total the spouse inherits ¾ of the estate.   

If there are no children, then the spouse inherits the full part of the deceased’s estate.

Karina Sejersbøl Christiansen noted that pension and insurance are not part of the overall estate. The overall estate consists of houses, bank accounts, companies, etc. With a will in place over Danish assets, people can make changes to the above-stated rules, it is important to remember, however, that Denmark enforces forced inheritance which means that children and spouses inherit 6.25 percent as a minimum of the overall estate regardless.

Benefits of having a will in place

Karina Sejersbøl Christiansen explained that everyone above the age of 18 with a reasonable state of mind can make a will. A will is a legally-binding document that lets you determine how you would like your estate to be handled upon your death. Having a will is arguably one of the most important things you can do for yourself and your family. Not only can a will legally protect your spouse, children, and assets, it can also spell out exactly how you would like things handled after you have passed on, following the rules of your country of residence and the country your assets are in. If you die without a will, there is no guarantee that your intended desires will be carried out. Having a will helps minimize any family fights about your estate that may arise, and also determines the “who, what, and when” of your estate.

Benefits of having a will in place in Denmark

By making a will for Danish assets and estates, married couples can make decisions together to ensure that their spouses future (and their financial assets) are better protected as long as they live and it can ensure that the remaining parent can sustain the same lifestyle by only letting go of 6.25 percent of the estate at first. After both parents are deceased, the children will inherit all of the estates. 

Other important reasons for making a will includes the ability to secure unmarried couples where the partner would otherwise be hereditary. A will allows for the ability to distribute the inheritance differently and it prevents the Danish state from inheriting in case you would want an organization or certain charity to inherit instead. A will can also secure the inheritance in case of family dissolution/divorce but the rules on the separate property for children do not change the fact that it is always only your children who inherit from you (never children-in-law). This means, however, that if the child later gets divorced and still has some of the inheritance intact, then it will not be divided by divorce.

With a will in place, you can also ensure that specific people receive specific things and memorial items and you can choose the executor you see most fit to oversee the estate after your passing.

Who gets custody of minor children?

Another important reason to make a will, especially for Danes living abroad, is that it allows you to make an informed decision about who should take care of your minor children in case both parents pass before the children turn 18. Absent a will, if your children are Danish, they will have no legal residence in Singapore in the long run and the Danish court will take it upon itself to choose among family members or a state-appointed guardian. But having a will allows you to appoint the person you want to raise your children. 

If you have assets in more than one country it is important to make a will in each country that can be combined and it is especially important to specify what will happen to the children if both parents pass whilst living abroad. 

Will for unmarried couples over assets in Denmark (Udvidet Samlevertestamente)

For unmarried couples, it is possible to make a so-called ‘Udvidet samlevertestamente’ (extended cohabitation will) which secures your partner the same rights as if you were married. The legal effects of an extended cohabitation will allow your partner to inherit half of your assets (like spouses) and it allows your partner the right to remove items for personal use and property in advance. This will can only be made if both parties in the couple are not currently married to other people and if you and your partner have had a joint residence for more than two years or are expecting a child, or already have a child together. 

How do you make a will?

In Denmark, the most common process involves a notary to sign and verify the will. The notary verifies that you are who you say you are and that you are in your right state of mind when you sign your will. In Denmark, a will is stored together with your identification number (CPR) and is automatically found upon passing. This option is efficient especially for people living abroad as it eliminates any risk of someone not finding your will after passing. It is also possible to have two witnesses oversee you signing your will however, the most secure way is to do it through a notary. Again Karina Sejersbøl Christiansen emphasized that different rules apply to different countries and it is very important to investigate the rules in your country of residence and again have a will in place in every country you have assets in. 

Price for making a will in Denmark 

At AVODAN Lawyers in Denmark, the price for making a will is DKK 5625 and covers all aspects excluding the charge to the notary of DKK 300. 

Inheritance tax

Different countries also have different rules and regulations regarding inheritance/property tax and in Denmark, the rules are as followed: The deceased’s spouse or registered partner does not have to pay inheritance/property tax. All others must pay inheritance/property tax or surcharge to the state in excess of the general basic deduction, which is usually adjusted on January 1 of each year. For 2021, the deduction is DKK 308,800.

Siblings, cousins, and the likes are taxed an additional tax which in total accumulates to 36.25 percent. Karina Sejersbøl Christiansen notes that if you have assets in other countries, you may have to pay property tax on the asset there. This applies for example if you have real estate in Denmark but live abroad at the time of your death. The estate must otherwise be settled according to the rules of your country of residence. 

Rules and regulations in Singapore

Because the rules and regulations regarding your assets are dependent on your country of residence and where you have your assets, DABS is working on setting up a similar meeting with a Singaporean lawyer so DABS’s members can become more knowledgeable regarding Singapore’s rules and regulations. 

Members questions

One of the most interesting aspects of the complex rules for DABS members living in Singapore was the fact that it all depends on your country of residence at the time of passing and the country you have your assets in. In the case that your country of residence has an inheritance tax of 0 percent, your heirs do not pay any inheritance tax. All assets are settled and distributed according to your country of residence at the time of your death and the country you have assets in. It was therefore also very relevant for DABS members to know the importance of having a will in place in all the countries you have assets in. 

DABS meeting was very informative and relevant not only for Danes living in Singapore but for all Danes living in Asia and abroad. ScandAsia is thankful for the opportunity to provide this information to all our readers in Asia and would like to express our gratitude towards DABS and Karina Sejersbøl Christiansen for sharing this important information with us.

If you are living in Singapore, DABS is facilitating a dynamic platform across industries and they encourage all Danish companies and professionals in Singapore to become members and be part of their active Danish business community. Find more information about DABS here

If you have any further questions regarding the rules for inheritance and guardianship in Denmark you are welcome to contact: ADVODAN Næstved, Nygade 9, 4700 Næstved, Denmark or Lawyer Karina Sejersbøl via e-mail kasc@advodan.dk

 

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