Should I choose an Individual Executor or a Trust Company to EXECUTE my estates?

A story for you to ponder…

Peter is a businessman who knows very well the importance of having a Will. What he disagrees with is to appoint a trust company to become his executor because he does not believe in 3rd parties handling his estates. Besides, he deems that the charges are high. 

So he appointed his best friend, Adam, as his executor. Upon the death of Peter, Adam starts his job by obtaining the Grant of Probate. Day by day he found out that there’s lots of administration work that Adam needs to handle such as locating, identifying and collecting Peter’s assets, gather all Peter’s debt, deal with bank and creditors, deal with income tax dept, filling the estates tax returns and do all the clearing before Adam can distribute Peter’s assets to his beneficiaries.

Besides, due to Adam not well versed in managing the task, there’s delay in handling the administer job. Peter’s family members who do not understand the tedious process keep on chasing Adam to expedite the distribution process due to the need of money for daily expenses and to pay mortgages. 

Adam had to correspond with various parties, make numerous calls and follow up which is very time-consuming. Adam slowly gets frustrated because it affects his daily lives and distracts him from focusing on his current job. After further consideration, Adam decided to hire a professional to help him to run the errands and expedite the matters. Relationships with Peter’s family members are affected due to this. 

In the end, more money needed to be spent hiring professionals to expedite the distribution and meanwhile the friendship between Adam and Peter’s family turns sour. 

For appointing an executor, what are the points you need to take into consideration.

  1. The complexity of the task – Administration job is not as easy as you think because one needs to deal with various parties and need to have certain knowledge on the administration process such as legal, tax, accounting and banking.
  2. It may cost more – If the one you choose to appoint does not have the knowledge to administer the estate, he/she ends up needing to hire someone who is able to handle it. Thus, more cost needed to administer the estate
  3. Continuity – when we appoint an individual as an executor, we may face the risk of passing on of the executor, old age, sickness which may derail the execution process. 
  4. Priority – As we all know, an executor job is long and tedious. If we appoint someone who is unable to put 100% effort into managing the estates, the distribution process may get longer. 
  5. Unexpected scenario – while the individual executor managing the estates, he/she passed away suddenly. The executor estates will get frozen which means all the estates he is executing will also be put on hold. This situation may cause further delay in distribution and it is hard to determine which assets belong to the executor and which assets belong to the one he was executing if there’s no proper filing done earlier.

Appointing an individual executor may sometimes cause unnecessary conflict or complications especially when other family members are not cooperative or are not on good terms with the executor. That is why we have the option to choose a Trust Company to act on our behalf as per instructed inside the Will. This is to ensure estate is fairly distributed to intended beneficiaries. Besides, a Trust company has the expertise, impartial, professional and most importantly perpetual existence. 

If one already paid the price of a cow,

why not pay a little more to buy a strap to pull it? 

For a personalized discussion, book an appointment with me now.

Procedure required when death occur without a Will

Do you know that all the deceased’s estate will be frozen upon death? This includes all liquid and illiquid assets. What will be the next steps family members need to do to unlock the estates?

First, family members have to determine the size of the estates. If the gross value of the deceased’s estate is RM600,000 or less and consists only of movables only, family members can go to Amanah Raya Berhad. If the estates consist wholly or partly of immovables, where the gross value does not exceed RM2,000,000, family members can go for the District Land Administrator. If the deceased estates exceed the above requirement or intends to expedite the distribution process, family members have to appoint a lawyer to apply for a Letter of Administration in court. 

Where will be the hiccups? Do you need mutual agreement among beneficiaries? YES, you need it. First, among all the beneficiaries, you have to appoint an administrator or a ‘leader’ to run the errands (dig out the assets, list out the debts, pay debts and distribute). Administrator is someone who has huge power over the estate. If all the beneficiaries above age 18, they can appoint at least one administrator. If the deceased leave behind kids below age 18, they have to appoint a joint administrator. Once everyone agrees who shall lead, the other beneficiaries should renounce their right to administer the estate. 

Next step is to find 2 sureties who have the equivalent value of the deceased’s estate. The sureties must ensure the estate is properly administered and the account properly rendered. Are you willing to become your friends or relative’s surety?

Do not underestimate these 2 steps above as it may take up a longer time frame than expected. Estimated time frame is about 1-2 years. Once settled, then family members can proceed to start administering. Have a look at the procedure below. 

This process may take about 2-6 years depending on how long the administrator takes to search for the assets and liabilities, complexity of the estates, time willing to spend by the administrator and many more. It may not be smooth sailing. 

In conclusion, without a written Will it may pose difficulties to immediate family members in terms of time spent, depletion in estate value, more money spent to run the errands and longer duration needed to distribute the estates. 

Make your Will done today to protect your loved ones financially and emotionally.  Have a conversation with me now for an in depth discussion.

Do you have enough to retire?

Covid 19 have change everyone’s life. Our daily life have to pause to give way to this Covid 19 pandemic. Same goes to our saving. For those elderly who save their money mostly in fixed deposits, they are having a tough time because of the reduce interest rates. Employers suffer due to unable to operate during MCO. Employees too have to dig out their emergency funds to pay for their day to day expenses.

Although EPF (Employees Provident Fund) making a move to allow the contributors to withdraw their EPF savings to mitigate the impact of Covid 19, but this will contribute to further reduction in saving upon retirement.

The EPF has previously stated that the fund withdrawal led to 6.1 million members having less than RM10,000 in their EPF accounts, among whom 3.6 million have less than RM1,000 in their EPF account. Members would have to work extra 4-5 years to gain back their savings that’s being utilize during the pandemic.

EPF chairman Tan Sri Ahmad Badri Mohd Zahir also highlighted that 48% of EPF members below age 55 have critically low savings, an increase of 28% as compare to before pandemic.

We are aware that one cannot depends solely on EPF savings to fund for their retirement. We have to diversify our savings to different investment portfolio to ensure we do not place all eggs in only one basket. What kind of asset classes should we rely on? This is basically depends on your risk appetite.

There are 5 investment portfolios you can consider, such as cash, bonds, equities, property and commodities. Each asset classes have their own risk, liquidity and expected yield. These assets classes have one thing in common, that is volatility except the asset class : cash. Although cash is not volatile but it may not able to fight against inflation.

What is important when we retire is to have a guarantee and consistent amount of money flowing to us every month or every year without the risk of volatility. Do you agree? How to find it? Besides putting your money to work for you in investment, put aside some money for annuity or endowment plan to build a guarantee source of income.

Look for plan which able to provide you guarantee cash payment every year, a minimum of 105% of total premium paid upon maturity and additional death or TPD(total permanent disability). Some plan also provide you retrenchment benefit too. End of the day, you have nothing to loss and most important is this amount of money will credit into your account every year no matter is pandemic or without pandemic.

For more information, kindly contact me.

Life after retirement and why do we need to plan ahead.

When an individual falls into retirement age, it would means that no more consistent income coming into our bank account every month. Have you ever wonder how’s life will be after reach retirement age ? Is been human nature that we always look forward for a better tomorrow. We visualized great things and events that would happen when we retired. When retire, most of us hope to travel around the world, play with grandchildren and worry free financially. In fact, one need to plan ahead to make this prefect scene comes true.

What happen in reality is, when one reaches their retirement, living financially free sometimes made impossible. One of the reason is they fail to manage their risk. As an individual gets older, their health may be at risk. Health conditions such as high blood pressure, diabetes, cataract, dementia and so on might slowly take it’s place in our body. These conditions have stop us from living great during old age. What’s more concern is one do not have a medical insurance to cover these out of pocket expenses.

Secondly, a retiree is at risk financially if he do not plan ahead to cover the period of no income. Most of us think that during old age our expenses is lesser. Indeed is true because our child has grown up and our mortgages commitment already settled. But in reality we still need money to maintain our current lifestyle (eg: travelling local & abroad, buy some goodies to grandchildren, searching for great food delicacies), car and house maintenance (eg: car service, plumbing, water leaking, utility bills and so on) and health maintenance too (eg: supplements, medicine, minor illness). Without saving enough, a retiree need to live frugally. They rather choose to spend less, avoid going to doctor during sickness and would rather save the money for their kids or grandkids.

Thirdly, a retiree are at risk of not able to manage their money efficiently during old age due to less connection to current market condition or due to major illness like dementia. If you unable to manage your money, who else have you assigned to take over this job ? Will you be fully secure placing your trust on the person who manage the money for you? Try to use some financial tools to help manage the money. Setting up a Trust is one of the solution.

Looking at the above circumstances, one should plan early to cater the future risk ahead. First, get covered with a medical plan. Medical expenses is not cheap and it is keep on increasing year on year. Debts and expenses shall not pause to wait for your illness to recovered. By the time you intend to buy a medical plan, it may be too late because insurance only cover healthy individuals.

If you fail to get a medical plan, you may need to draw a large chuck of your saving should unexpected illness occur. What if the illness force you from continue working and hence cut down your recurring income as well ? How well can your savings to withstand the income shock ? Which pocket shall you withdraw to pay for monthly expenses ?

Second, save as early as possible to let the power of compounding takes its place. The earlier you save, the better the compounding effect. But wait, I have no money to save ? This boils down to what do you want to achieve in life. Sometimes, we work so hard that by the end month where the salary payout, we want to buy some stuffs to compensate our hard work, right? Yes, indeed you need to do so because you did the hard work. But plan wisely and let saving as part of your monthly expenses too. Trust me, when you inculcate the discipline to save every month, you will tend to spend more freely.

Create few baskets of saving. One for emergency, one for investment and one for retirement purposes. Emergency basket is to cater for emergency solutions like finding a new job or being fired by company unexpectedly. This amount should be at least 6-12 months of your monthly income. Place some of your saving to investment. Why? You do not want to work forever so make sure the money you save works hard for you. There are many types of investment out there for examples Unit Trust, equities, bond, robo advisor, equity crowdfunding and many more. While investment comes with risk, do place some money into a safe haven financial instrument for retirement purpose. It’s best if money save for retirement is capital protected and able to give you recurring income payout consistently when retirement age come in place. Remember, retire means no more income coming in.

Third, do set up a Trust to protect yourself and your assets. When one gets old, they may be at risk of dementia or incapacitated. When this happen, no one would have the right to manage your assets if you do not set up a Trust. Who can withdraw the money from your bank account? Many tends to open a joint account with their kids in order for the kids to withdraw the money when they unable to do so. Yes, you may do so but what if the money withdrawn being squander by other parties? What is it left for you then ? Have you read news which highlighted how parents being kicked out from house and force to linger on the street?

The more safer method is to set up a Trust, place all your liquid assets into it, pre set a condition on how these liquid assets will be used should unexpected events happen. Take control over your money while you still alive in this planet and you can always write a Will to will away all your belongings upon demise. Sometimes, give too much too soon may not be a wise solution.

Create your own value as you age.

One of it is to continue to take charge of your money.

In conclusion, one have to plan their retirement planning as early as possible looking at the above risk and possibilities. Is never too late to start your planning now. Have a talk with us now!

7 reasons why you need Insurance in Estate Planning

Insurance is vital to blend in into your estate planning as it serve plenty of benefits. Insurance can make a small estate becomes big and protecting an estates which is larger in value. Besides, insurance can serve as an immediate funds used to payoff various expenses and debts.

Why do we need immediate fund when we already have a Will to distribute the estate ?

Time is the main concern in distribution because distribution is not immediate. An executor have to 1st pay off whatever debts the deceased owe before start to distribute. This process normally takes months, years and sometimes longer depending on the complication of the estates. What if the Will being challenge in court ?

Although assets being frozen but expenses keep moving. From funeral expenses to mortgages and child education fees which have no room for delay. If the expenses do not handle properly, it will lead to further emotional stress.

In order to leave your loved ones in a better financial position upon death, one should place in an insurance in your estate planning.

Here’s why.

  1. Pay for funeral expenses

Funeral expenses is costly. If you already have an insurance policy to payoff this expenses, beneficiary do not need to dig on their saving or ask money from relatives to payoff these expenses.

2. Settle debts

Debts have to be settle before an estate starts to distribute. Money can come from estates or insurance proceed or beneficiary pocket. Whether the estate consists of mostly illiquid or liquid assets, using estates fund to payoff debts will result in the depreciation of total estate value. In other words, beneficiary will get lesser than expected. Using insurance proceed would be a more wiser method to settle off the debts. After all, is just a small token of money use in exchange of a high payout. Doesn’t it worth a second thought ?

3. Income replacement

How much income does my dependent need without me ? How many years do you want to continue to support your dependent after demise ? This is all depends on your own goal and family situation. Example, if you are sole breadwinner leaving behind a spouse & small kids, you may need to think of supporting them financially for another 10 years to come. Spouse who need to bring up the kids alone deserved to be giving continuous income support so that they no need to worry about financial. Prepare some education funds for kids to continue their education is of concern too. Planning would be more critical for parents with special kids ? An ideal income replacement is 10x of your annual income. How far have you achieved?

For those business owner, do set up a buy sell agreement so that beneficiary will get a fair value in the company shares. Continuous income is what matters when beneficiary is not in play/not interested in your current business.

4. Estate administration Fees

To administer an estate, there’s fees incur. Lawyer fees, opportunity cost, runner fees, tax clearing fees, property transfer fees and so on. Using the estates wealth to payoff the fees will diminished the estate’s total value, hence leaving lesser to beneficiary. If there’s an insurance in place, after paying off all the debts, whatever leftover insurance payout can further distribute to beneficiary. Hence, it enhance the wealth of the estate.

5. Tax free basis

Insurance payout is tax free. In other words, your beneficiary are receiving the payout 100% without need to deduct any tax. Meanwhile, this payout is immediate too.

6. Leverage on your wealth

Maximize your net worth by leverage on your assets. For example, a 40 year old healthy individual can get a life protection of RM500,000 for a little of RM6000 per year. If he passes on 10 years later, means he is paying RM60,000 for a payout of RM500,000. Net gain of RM440,000. Even a full payoff of the premium for 20yrs (RM120,000), he still get a payout of RM500,000, net gain of RM380,000. Isn’t it worth a bet for just RM6000 per year?

7. Avoid probate

A Will need to go through probate process which takes time for distribution. While insurance proceed do not need to undergo probate process and the proceed can be fully paid to beneficiary at the fastest pace. If you are concern of spendthrift beneficiary, always set up a Trust to control the distribution of the estates. Besides, a Trust can preserve wealth to last through generation.

Most of the individuals when being approached to buy insurance, their answer is mostly ‘NO’. Partly maybe they have been approached by lots of insurance agent and they get fad up with insurance. But think again, how many of us really have adequate coverage of insurance? How many of us already work towards providing a continuous income stream to family members upon demise? Wait no more, have a complete estate planning now!

Why do we need an estate plan

Wealth distribution

There’s a saying that ‘We born with nothing and we leave with nothing.’ But fortunate enough, during the lifetime, every individuals in this world do create and accumulate some form of wealth before they leave the world. True enough that when leaving the world, no one able to bring along the wealth they accumulated in this world, only memories will follow suit.

So what will happen to these left over assets? These assets / wealth which left with no written instruction (written Will) shall lead to the court to help them to make the final decision. In other words, the court shall determine on the wealth distribution which may not be the deceased’s intention or the wealth may fall into undesired beneficiary. This may lead to the intended beneficiaries to suffer emotionally and financially. Is this the final wish you want to left to the one you loved ?

We have our loved ones and children who rely on us

You are your family breadwinner. Day in day out, you work as a bee with the hope that we able to support our family financially. And how far have you plan ? What if something hits and you are leaving them without a notice ? Have you pen down which assets to distribute to each and every beneficiary ? Or you are fine with the court’s decision ? Do you know that grandparents are not child’s legal guardian and need to be appointed by the court if no Will in place ?

How about income replacement for your family, children education fees and family daily expenses ? This is important because all assets will be frozen upon death, even you have a Will ? While waiting for assets distribution, you may need to prepare some liquid assets to maintain family’s day to day expenses.

Income replacement plan is vital to cover a sudden disruption in family’s financial when facing sudden death of a family member. If you are concern on whether or not the beneficiary able to handle the proceed wisely, you can consider to set up a Trust. While setting up a Trust, one can pre set the condition inside the Trust Deed to ensure the insurance proceed is being used wisely. Besides, your love can be extended for next generation if one fully utilized the usefulness of Trust.

Ever ready with a back up plan

Have you ever thought of why every household have a water tank ? Water tank is a back up plan just in case there’s a water disruption. Do you have a back up plan for your family if there’s a disruption in family earning due to sudden death ? As we mentioned earlier, all assets of the deceased will be frozen upon death and it takes around 1-2 years to defrost them ? During this grace period, your family may need some liquid assets to maintain their financial needs. Death of a family member often lead to emotional stress and they need time to react and back to their normal lives. If they are taken care of financially, this will surely reduce their emotional stress as well.

In conclusion, everyone needs an estate plan. Don’t have the misconception that an estate plan is only for the rich. In fact, estate planning is for everyone because we all have the person we would like to take care.

Start by writing a Will now!

When a business partner exit the business unexpectedly

When a business is formed with friends, there’s when we need to take an extra steps to protect our shares for the benefit of our family members. Why do I need to do so? Write a Will and transfer the share to my next of kin. That’s all I need to do, isn’t it ? Yes, there’s nothing wrong with transferring your company shares to your loved ones but one should answer these questions together to see how ready is the heirs.

  1. Can your family members take over the business and continue to grow ?
  2. Do they want to take over the business ?
  3. Do they know how to operate the business ?
  4. Can they work well with your existing business partner ?
  5. Will they have the same direction as before ?
  6. If they do not want the share, can they sell to the existing business partner with a fair value at the point of time ?

Common problems arise upon existence or death of a business partner.

Is always better be prepared than sorry. Business income might be the main source of income to our family members. Protect the company share currently own by you so that family members continue to receive continuous income flow even without our presence.

An proper estate plan is the best gift we can provide to our heirs.

Let’s cherish their lives forever.

Estate planning tips for parents with young children

As a parents we have a huge responsibilities towards our family. Our children depends on us to guide them along different stages of life, give them support mentally and financially. Parents would like to seem their children grow, further study in university, get married and have children. Sometimes in reality, what we often hope and plan for do not always go according to our wishes due to unforeseen circumstances. Just like what we often saw in a newspaper that people get killed in an accident or had a cardiac attack and pass away in a sudden. How many of them do you think have an estate plan in place ? According to a survey, only around 10-15% of Malaysian have a Will, and a complete estate planning is more than just a Will.

My question now is how far have we plan for our family if we passed on unexpectedly ? Where should we start ? There are few questions we need to answer.

For parents who is the family breadwinner, below are the questions you need to settle.

  1. How much assets we have ? Who do you want to benefit ?
  2. How much debts we owe ? Funds used to settle the debts ?
  3. How much money my kids need for their study currently and in university ?
  4. How much is my family monthly expenses which is currently under my care?
  5. How much should I support my spouse financially ?

Besides knowing how much net worth you have, one should be aware of how’s the asset distribution upon death. How long will it takes for an assets to transfer to it’s beneficiary ?

And do you know that all assets being frozen upon death ? When assets were being frozen, where should our family get the funding for their living expenses, housing loan and monthly education fees ?

If a person only writes a Will, his next of kin need to wait at least a year for the assets to transfer to it’s beneficiary. Why ? Upon demise, family members were emotionally driven by the lost of a family member which make them delay in digging out the assets and liabilities the deceased own. A messy self keeping record on the list of assets and liabilities will make the process even harder. After finished compiling, one need to apply for a Grant of Probate to unfroze the assets. This process takes around 3 to 6 months. Then, the appointed executor need to arrange for debts settlements. Take note that communications with bank or government entity needs time. How long ? It really depends on how complicated are the debts and whether the debts can be settled easily with enough funding. Let’s assume it takes another 3-6 months. Finally, distribution starts!

Do you spot anything missing or is there anything not yet covered ? If everything is being frozen, what fund should be used to fund living expenses, monthly loans and education fees. These funds need immediate attention and it cannot wait till distribution starts. For those who have house loan, most probably bank will lelong the property due to non payment. Children in college or university would need to stop their study due to non payment in school fees. Wait! I have bought some insurance. Aren’t insurance pay out immediately without going through probate ? Yes, you are right. Question is, how can you assure that the payout is used according to plan ? Have you ever heard of inheritance fund being misused or cheated by relatives ?

What are the solution ? Set up a Trust. Spell out correctly how are the funds from insurance going to be used to pay for mortgages, children school fees and family monthly expenses. Pro long the insurance payout by giving to beneficiaries every month to keep them going.

A Will itself may not be the best solution for parents with young kids. There are more concern a parent need to mitigate in the event of sudden death. Have a conversation with us now or send us your concern.

How to manage money wisely

Money is use to meet our emotional and psychological desires. Money provide certainty and security to our day to day life. We live our life more significance with money. Without money life can be miserable and out of control. As such, we shall manage our money wisely in order for the money to continue to work for us while we retire or faced unexpectedly events.


We all know that we can’t work for money forever. Money need to be multiply by saving it either through saving in bank, investment or insurance. It doesn’t really matter what median we used to multiply our money, but the key point is WE ALL HAVE TO SAVE.

One of the main reason we all need to save is no one knows when emergency will hit us. Just like Covid 19 pandemic which hit every human on this earth badly. And what if one day our company just ask us to leave without compensation ? What if dread diseases hit us which force us to stop working ? How prepared are we facing the consequences ?

Besides, saving is vital due to rising cost of living and rising cost of education for kids. If we don’t save now, how can we support our future living expenses upon retire and kids education fees which keep on increasing year by year.

A survey conducted by  AKPK’s 2018 Financial Behavior Survey (AFBes’18) showed that individual between age 50-59 were more serious in their planning while those with higher income have less planning. An online survey done by Department of Statistics Malaysia found that 71.4% of self-employed have saving which can last for one month and 82.7% of those in private sector have saving which can last for 2 months only. (source :

When manage money, make sure the money is kept in a safe financial tools such as bank account or fixed deposit even though they are not paying high interest. Emergency funds need to have high liquidity because the term ’emergency’ means we do not know when it will hit us. Experts suggest to save at least 6 months of monthly expenses.

If money is really tight at this point of time, do try to save a small fraction of your income. Set aside a saving amount as the monthly expenses that cannot be missed. Automated your saving every month is one of the way to force us to save too. Do not underestimate the power of compounding.

Place a fraction of income to investment. Money in investment enable the money to accumulate faster then expected. Practice to invest a small amount every month with a safe and licence financial instruments. Keep track with the performance every month, quarter or year depends on how volatile is your investment.

Besides that, having an insurance to pay for your medical expenses and income replacement is advisable because the above may drain up your entire saving faster than your thought. The reality in insurance is that when you begin to realize the importance of having it, there’s when you might not be accepted by the insurer due to health complication.


Saving for retirement is equally important as saving for emergency. No one would like to work until the day they leave the world. Besides working, there’s a lots of things in this world waiting for us to enjoy and explore. Increase in life expectancy and inflation are what makes retirement fund more important.

Life expectancy for Malaysian in year 1950 was 52.8 years while in year 2021 it increase to 76.36 years. This means a person who tends to retire at age 60 do have another 16 years in this world without recurring income if he do not plan wisely. (source :,a%200.19%25%20increase%20from%202019.)

Try to have a basket of retirement fund and do not just solely rely on one source of fund as retirement. What if the only source of fund you invested failed you and by the time you notice is way too late ? Don’t you agree ? Try to set a purpose for retirement fund. For example funds to enjoy life after retire-Happy Fund; funds for house, car and personal maintenance –Maintenance Fund; funds to visit doctor – Medical Fund and funds to protect our dignity –Sense of Presence Fund.


Trust is a very powerful financial tools normally used by the wealthy individuals to protect their wealth. Due to the effectiveness, Trust started to be used widely and available to all. What can Trust benefit us ? Trust can make sure our plan moves based on our intention. For example, Mr J bought an insurance to replace his income and one day he met with an accident and fall into coma. Where do you think the payout shall fall to ? Not to the beneficiary but to Mr J personal account because Mr J still alive. Then how Mr J going to benefit from the payout if no one can withdraw the money ? But with a Trust, Mr J can assigned his power to the trustee to act on his behalf and withdraw the insurance payout to pay for his medical bills, hired a nurse and pay for his monthly expenses.

Trust also widely used by retires to enable them to life a significant life. Many retires or old aged parents prefer to transfer their house and money too soon to their child, hoping that the child will in return take care of them. But sometimes it resulting to parents being kicked out of the house, money being misused or scammed away and end up living a miserable life. As an individual aged, handling of money may be difficult at times. They can set up a Trust and place all the assets into it, set a condition as how he would like to benefit from it and the balance of wealth to be transfer to the next of kin upon his demise.

Lastly, saving habit need to inculcate during childhood. Make it a practice and when kids aged, they shall automatically treat saving as top priority. Further do not underestimate the power of compounding. The more you save, the more you compound and the more you will get at the end. To ensure the money we save can act as per wish, do set up a Trust.

Let’s start it right now !

Let’s talk further from here.

Guides to create an Estate plan

In every steps we made, we need a plan. The same applies to estate planning. Do you have a well defined objective for your estate plan ? What is your final wishes ? What kind of wealth do you intend your next of kin to inherit ? Do you want to leave behind vital family values or your success path to successor ? A plan is definitely needed to make the estate plan able to work properly.

Normally the main objective of an estate plan is to ensure a smooth wealth transfer while keeping the transfer cost lowest possible. How can this be done ? To ensure a smooth wealth transfer, first you have to list down how much assets you own. Don’t forget to list down how much liabilities you owe too because these liabilities won’t just erased away after demise. The step require before distribution is to first clear whatever debts the deceased have.

Then, plan precisely who shall gets what by taking into consideration of further disputes and arguments among beneficiaries. If the assets you intend to pass to the beneficiary is still on negative net worth, take further steps to mitigate the arrears. For example, you intend to leave to your kids 3 properties worth RM3.5 million, but all 3 properties under loan with no MRTA/insurance attached. Total loan amount RM2.8 million. Upon demise, your kids have to settle the amount owe to bank of RM2.8 million before the properties able to transfer to their name. How to settle ? Executor will need to check on the deceased estates (preferably liquid assets) whether the deceased have left behind enough cash to settle it. If estates had enough money to settle it, that’s good but if not, the executor need to liquidate other assets to pay for settlement. This resulting to the beneficiary end up getting less than expected.

Then back to basic question, is this your initial wishes ? It is advisable to make use of some financial tools to help you achieve your goals cost efficiently. One way is to purchase a life protection plan to cover the shortfall. With insurance your beneficiary do not need to worry on the loan outstanding. Besides, the total wealth transferred is getting more in value.

Second objective may be likely to reduce family burden. Are you the one bringing home money every month to sustain your family monthly expenses ? Have you set up a recurring payment to continue paying for it even after your demise ? How long do you want to support for your family and how much they need ? All this condition can be set when crafting out your estate plan.

For example, for parents and spouse I would like to support them financially until their demise and for children until their age 21. My parents is age 60 now and they need RM1,500 per month. Assuming they can lived until age 85, they need a total of RM450,000. My wife age 35 and I would like to continue provide her financially of RM3000 per month until her demise. Assuming she lived until age 85 and total she need is RM1,800,000. I have 3 kids age 3, 6 and 11. I’m not sure how far they will pursue their education but I would like to leave an education fund of RM1,000,000 each for them. This add up to RM3,000,000. I have 3 properties under loan of RM1,000,000 without MRTA. Every month I need to bring home RM10,000 for my family basic necessity and utility bills. Let’s say I covered this expenses until my youngest kids reach age 21. Total up I need RM2,160,000. So, if I pass on yesterday, how much should my family need in total ? RM8,410,000.

Require fund per monthYears to supportTotal need
Parents age 60RM1,5002525 x 12 x RM1,500 = RM450,000
Spouse age 35RM3,0005050 x 12 x RM3,000 = RM1,800,000
Kids x 3RM1,000,000 eachRM3,000,000
Monthly expensesRM10,0001818 x 12x RM10,000 = RM2,160,000
Housing loan RM1,000,000RM1,000,000
How much does my family need after my demise

The amount above might be differ as each family needs and financial requirements are different. But the concept are similar. You can follow the table above as a guide for your family financial needs.

Next question is how to fund the above amount ? You can use your own hard earn money to fund it but there’s a more effective way to cover the shortfall, which is buying an insurance. With a small token of premium per month, it enables you to cover the financial needs you require for the lifetime benefits of your family. Don’t you think is worth considering ? Just like running a business, we always take loan to fund for purchases or business expanding instead of using 100% company fund.

Above explanation already covered the objective, analyze your net worth and how to fund the shortfall. Next steps is to implement it. A well design estate plan does not end with just a Will. A Will only able to defines who gets what with a desire executor. To ensure the funding you plan for them for their lifetime able to act and use accordingly, you need to set up a Trust. Trust helps to distribute your wealth periodically and can reduce the chances of fund misused. The appointed Trustee inside the Trust will make sure all the intention will be well managed. The key here is to appoint a Trustee that is sustainable, never die and experienced.

Last step is to review your estate plan regularly or when there’s major changes in your family trees. For more info on this, please stay tuned to our next post to come.

To discuss more personally on your own estate plan, kindly leave down your contact below and we will get in touch with you soonest possible. Do follow my blog for more discussion on estate planning.