The decisions that we make about our assets can have a profound effect on our family and children later. Potentially for generations – both financially and emotionally.Â
Holding such wealth within wealthy Asian families, there is a need for greater stewardship, responsibility, and wholehearted management of entrusted assets so that this wealth can be handed over in better condition to the next generation.
Here are some important considerations:
1.How equipped and confident are wealthy Asian families in ensuring that a minor or young adult will be able to handle such wealth wisely?
2.What role do you want your children to succeed?
3.Will our future generation have the resilience and ability to endure sufferings and make a difference to the work they are passionate about?
4.What are the pitfalls to watch out for and what are alternative solutions in Estate planning?
- WHY WEALTHY FAMILIES SHOULD LOOK AT ESTATE PLANNING
- WAYS TO SUCCESSFUL ESTATE PLANNING
- IMPACT OF SUCCESSFUL ESTATE PLANNING
WHY WEALTHY FAMILIES SHOULD LOOK AT ESTATE PLANNING
Having accumulated much wealth in liquid net worth, the main motivation for wealthy families is no longer to grow their wealth, but to preserve and protect assets for generations.
While it may seem that accumulating massive wealth makes one feels infallible to financial problems in the future, no one is truly spared from the risk of sudden income loss due to disability or illness, lawsuits, or market uncertainty. Wealthy families have more to lose than the average family, making the estate planning process even more crucial.
As such, there is a lot for these wealthy families to think about. How would you want the story of your life to end? How would you want the new chapter in your next generation to begin? Many families could be enjoying a lot of achievements and recognitions while they are around, but fail to inculcate important values for their future generations.
For affluent families, there is certainly an added pressure to ensure that while their children enjoy financial privilege, they also have to act responsibly. The last thing they want to do is put money in their children’s hands when they’re not prepared to handle it.
- WHY WEALTHY FAMILIES SHOULD LOOK AT ESTATE PLANNING
- WAYS TO SUCCESSFUL ESTATE PLANNING
- IMPACT OF SUCCESSFUL ESTATE PLANNING
WAYS TO SUCCESSFUL ESTATE PLANNING
A well thought out Will and Trust planning are ways to achieve successful estate planning objectives. In recent years, there has been a strong growing demand in the setup of trusts, for reasons such as asset protection and multi-generational wealth planning. A well thought out Estate Plan is one not done merely from order taking, but one that identifies and solves potential asset leakages.
Estate duty taxes on overseas properties and stocks, unplanned divorce from adult children, creditors from business loans, and potential bankruptcy claims are some of the common asset leakages.
Certain important values like filial piety, family harmony, determination, philanthropy, and hard work can and should also be instilled in the trust to build clarity in family values for generations to come.
- WHY WEALTHY FAMILIES SHOULD LOOK AT ESTATE PLANNING
- WAYS TO SUCCESSFUL ESTATE PLANNING
- IMPACT OF SUCCESSFUL ESTATE PLANNING
IMPACT OF SUCCESSFUL ESTATE PLANNING
One positive example of a trust that is well run is the Rockefeller Foundation, founded by John D. Rockefeller in 1913. It is fascinating to learn how a family with their 250 descendants remain closely united till today, without public scandals, feuds, lawsuits, and tragedies that typically plague most wealthy families.
The trust owns and is also the beneficiary of a life insurance policy on each family member. This has led the trust to be worth from US$6 billion in the 1950s to a phenomenal US$360 billion today in 2022, with the trust continuing to benefit the family and the charities they support.
This is a good example of stewardship in perpetuity that every wealthy Asian family should aspire to achieve.
Jovin Yeo is the Director of Sales for Manulife Financial Advisers with an Estate Planning license. With over 20 years of experience, she is often referred to as the go-to specialist for well-heeled working professionals and families. Her specialization lies in retirement & estate planning, as well as restructuring risk & investments.
Known for her practical insights and sincerity, her clients range from families, business owners, to Chairmen from different industries.
With a strong desire to raise the standards of responsible salesmanship among financial practitioners, Jovin served as Treasurer & Vice Chair with the Singapore MDRT Committee for five years. Mentorship continues to be one of the passions she enjoys today.
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