Map Out Your Legacy

Is Estate Planning only consists of writing a Will only ? There’s absolutely a ‘NO-NO’. Writing a Will is just a basis step needed to secure who will inherit the assets upon death. Having just a Will alone comes with consequences. First, a Will only activate in the event of death. What if just disability, coma or missing ?

For those who have buy an insurance, you know that if disability happens, insurance company will payout one lump sum of money to us. Let’s assume Mr Silly was coma and insurance payout RM 1,000,000, credited to his bank account. My question now is, can anyone access to Mr Silly account other than he himself ? If no one else can withdraw the money, how will Mr Silly’s family going to use the money for his expenses ?

Another scenario. Mr Hiker is a breadwinner, married with a lovely wife (housewife) and two young children. He owns a business. He went hiking one day and went missing. With only a Will, can his wife transfer his estate ? NO! Can his wife takeover his business ? NO! What happen to his family liquidity and their flow of funds coming from ? DON’T KNOW! The truth is the family cash flow will be stuck. Estate unable to transfer due to Mr Hiker is not death, just missing in action and not sure when he will come back. To declare death, one have to wait for 7 years. Wife can manage the business but major decision which need signature of MR Hiker, his wife unable to do so. furthermore, the trust on the company’s performance and earnings will diminished.

Actually Mr Silly and Mr Hiker can always turn this sad story into a happy ending. They just need to take one more steps ahead, by setting up a Trust. Trust enables you to pen down what your Trustee need to do with your assets if one day we unable to do so due to incapacitated. For example, Mr Silly can instruct the Trustee to manage the insurance payout for the use of his outpatient medical bills (eg: hire a nurse to take care of him 24 hours a day), pay his outstanding loans and maintain his family lifestyle. This method can ensure the money is use in a correct manner.

For Mr Hiker, he can place some liquid assets (eg : bank deposit, fixed deposits, unit trust) into a Trust. Inside the Trust, Mr Hiker can instruct the Trustee to take over his assets in the event of missing for a period of 30 days. This action can reduce the stress of Mrs Hiker. not knowing what to do in a short period of time. For Mr Hiker’s business, if he foresee that his wife unable to take charge of the company, it is best that he seal a buy & sell agreement with his company director who will be more than happy to take over Mr Hiker’s share. Mrs Hiker on the other hand can concentrate more on his children well being with all the assurance provided.