Have you thought about your estate plan?

Date: March 12, 2015

Have you thought about your estate
plan? It is a plan that you make in advance
and name whom you want to receive the
things you own after you pass away.

If you haven’t, no problem. Use this
article to help you pen some thoughts
down. Do leave your technical queries
aside for now and focus on what you really
wish to do.

Let’s get started

Divide a blank piece of A4-sized paper into
four quadrants as shown in Figure 1. It’s
already fi lled in with an example of Adam
and his family.

Quadrant A – Specify your main beneficiaries
Here are the people Adam (aged 45)
wishes to benefi t – Betty his wife (40), their
two children (10 and 12), and his parents.

Quadrant B – List down your assets
Your assets can be divided into (a)
immovables that “do not move” such as
land and condos, and (b) movables that
can move such as bank accounts and
insurance policies.

Most of what Adam owns is situated
in Singapore although he has a UK
bank account and apartment.

Adam estimates his net worth at death
(NWAD) is $3.2 million.

Quadrant C – Specify immediate gifts

Adam plans to give $200,000 to his parents
and the remainder to be shared equally
among his wife and two children. Should
his children receive their gifts immediately
upon his passing? I think that would be
a bad idea. His children could become
millionaires at a very young age and lose
the desire to study and work thereafter.

Quadrant D – Specify delayed gifts
After speaking with an estate planner,
Adam decides to delay the gifts to his
children by entrusting $2 million to a
trustee. A trustee is a person or institution
that would hold the money for his children
for over a period of time.

Adam instructs the trustee release
money to his children only for
maintenance, education and medical
expenses up to say $10,000 a month. Then
when his children each reach 30, the
remaining money can be given to them.

The simplifi ed example above shows
you the importance of considering both
immediate and delayed gifts in your estate
plan. Do tell your children that you have
such a plan. Tell them that the plan will
not be used until you are old and your child
has grown up. But the plan is there just in
case there is an emergency.

Keon Chee LLB MBA
Rockwills Trustee Ltd

This article is contributed by Rockwills Trustee Ltd