Multi-generational Legacy Planning
provides clarity to your philosophy and values towards family wealth. This planning process allows you to set out your guidelines and governance structure apart from bequest to ensure that your legacy is carried out for the benefit of your future generations.
“Wealth does not last to the third
generation”
富不过三代
~ Chinese proverb
It is anecdotes of the squandering of inherited wealth by the grandchildren of a patriarch who built great wealth. A result of failure of defining a clear philosophy with regards to family wealth by the patriarch. First, the patriarch may start business as a means of survival, and through perseverance and huge personal sacrifice, a thriving enterprise may develop; The second generation may be roped in to support the business as it expands but usually ultimate control over the ownership and direction of the business is held by the patriarch; The third generation may be far removed from involvement of the family business, and they may only experience the personal wealth effects of the family legacy. Thus, divergent philosophies may develop with regards to family legacy.
"Responsible individual owners of wealth are the building blocks of a family's legacy."
“Without a clear philosophy of wealth, financial advantage can trigger conflict and heighten feelings of regret or guilt amongst inheritors.”
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Multi-Generational Legacy Planning
Multi-Generational Legacy Planning
You may be prolific in creating wealth for your family, but that wealth may not guarantee the happiness and success for your future generations. A true legacy is far more than money, it may carry with it a famous name, unique values and standards, lineage, tradition or a respected position in a community.
A successful legacy may promote familial harmony, a shared identity and purpose in order to encourage your offspring to work together. Combining a successful legacy with good leadership may increase the likelihood of preserving family wealth beyond the proverbial third generation.
We understand your demand for Financial Serenity in this final piece of financial planning task, so we work closely with you to provide clarity to your philosophy and values towards family wealth. We recognize that poor planning may elicit conflict, resentment, regret and guilt amongst your beneficiaries. This planning process also allows you to set out your guidelines and governance structure to ensure that your legacy is carried out for the benefit of your future generations. Thus, we cover services of will-writing, and planning of trust and foundation set-up to materialise our clients’ wishes.
- There are two very different attitudes that family members develop toward inherited wealth- either Proprietor or Steward of the wealth.
Implications of Financial Services Act (FSA) 2013 on your Insurance Policy Nomination
Mr. Tong purchased a large sum assured insurance policy with objective was to provide liquidity to his estate by using insurance proceeds to cancel his business and personal liabilities in the event of his death. He nominated his wife as the beneficiary in the belief that she would be capable of managing his financial affairs on his death. Unfortunately, several years later, strains occurred in his marital relationship. As part of the consolidation of his financial affairs in case of divorce, he attempts to revoke his wife as nominee and make some changes in his policy. But the insurer insisted him to get his ex-wife’s consent and he faced the roadblock. Why does this happen to his policy nomination?
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FSA2013 & IFSA2013 at Glance
Points to be taken of this FSA 2013:
- FSA 2013 repeals previous Insurance Act 1996.
- Schedule 10 empowers a non-Muslim policy owner to create trust policy by nominating his spouse and/or children as beneficiaries. If at the time of nomination there is no living spouse or children, he may nominate his parents. Other than these nominees at that conditions shall act as executors only, not beneficiaries, a non-trust policy.
- Nominees of Muslim policy owners may act only as executors, a non-trust policy is applied.
- The policy owner may appoint any person other than himself as a trustee to the policy monies. Where there is no trustee appointed, all the nominees automatically become trustees. Where any nominee is legally incompetent to act, then the nominee’s parent may act on his behalf.
- Consent from trustee is required whenever the policy owner seeks to revoke or add nominees, vary or surrender the policy and assign or pledge the policy as security.
- Where there is more than one nominee and one of the nominees predeceases the policy owner, insurer shall pay the share to the remaining nominees in proportion to their respective shares.
- Where a policy owner dies without having made a nomination, the licensed insurer may pay the policy moneys of the deceased policy owner to the lawful executor or administrator of his estate. If not, the insurer may pay the policy moneys to the deceased policy owner’s spouse, child or parent in accordance with section 6 of the Distribution Act 1958.
- If it can be proven that the policy was effected and the premiums paid with intent to defraud a creditor of the policy owner, the creditor shall be entitled to receive from the policy moneys payable under the policy a sum equal to the premiums paid under that policy.