Legacy planning: Seeing far ahead

Working towards a 20/20 vision of distributing your assets is not as intimidating as it sounds. In fact, it’s something we should all do, regardless of how many assets we currently own, or how young we are. It’s never too early to start.

When planning your legacy, your ultimate goal is to leave wealth for your beneficiaries and dependents, so you can consider doing these things:

• Writing your Will for the smooth distribution of your assets and investments.
• Optimising the value of your assets.
• Minimising any loss in income.
• Ensuring your family’s well-being with term or whole life insurance.
• Growing your wealth and distributing it fairly with Universal Life insurance.

In the first of five series to legacy planning, we will uncover what’s involved in writing a Will to communicate your intentions to your beneficiaries — the first step to creating an impact with your wealth.

Why is a Will important

A Will is a legally binding document that lets you state clearly how and to whom you wish to distribute your assets. This removes guesswork, misinterpretation, or disputes. A lawyer can help you write your Will.

Here are 3 things to consider:

Everyone has different assets. Yours might include cash, property, an investment portfolio, valuable collections, even a business. It’s useful to make a list of all your assets, and update it at regular intervals, or when you enter another life stage. For instance, when you get married or have another child.

A note about CPF

For many of us, our CPF funds are also a major asset. Note that you will have to make a separate nomination with the CPF Board, as these funds are not covered by a Will.

Perhaps you may wish to:

• Maintain your residential property for your family’s use, instead of selling it.
• Grow your wealth for your younger children’s future.
• Provide for your older children’s overseas education.
• Put aside a larger share of your assets for a vulnerable dependant.
• Keep any business ventures you have intact.

Your intentions will have a bearing on how you decide to distribute your assets.

Choosing the ‘right’ fit is important, because you are choosing the right beneficiary to fulfil your intentions.

Chances are, you have many beneficiaries, like your spouse, children, parents, other relatives or close friends, even business partners or charities. Some of them may be more suited to inherit some assets over others. For instance, the child that’s been most involved in helping you run your business is probably the most suitable person to run it.

Whatever you decide to do, you will want to be fair. But some assets like a valuable art or jewellery collection, property or business may be hard to divide. Leaving these to a single beneficiary will keep them intact and optimise their value, but may not be fair. You can still be fair to your other beneficiaries by allocating them different assets of a similar value.

Now that you’re clear about your intentions, you’re ready to look ahead. Draw up a Will that can optimise your wealth while minimising both loss of value and disputes. The sooner you do this, the better. You can then rest easy knowing that even if the unexpected happens, your beneficiaries will be taken care of, especially those who are very young or old, or have special needs.

If you need some help evaluating your assets, you can always speak to a wealth advisor to give you a holistic overview of legacy planning.