Ask and We WILL Answer
The Borneo Post with the expert help of Rockwills Trustee Bhd, the leading specialist in estate planning having pioneered wills and trust 29 years ago, is publishing a regular Q&A column on estate planning. It will feature questions which readers have in mind but don’t know who to ask.
Question 1: I noticed there has been a lot of news about money scams, I was quite surprised that scammers nowadays can have so many ways to scam. From shady investments that promise unrealistic returns to online phishing. I am quite concern that when I am no longer around, would my wife be careful enough with the money I gave her? She has been a housewife all this while and she is quite trusting of people around her. Should I entrust my money to people I can trust as a safeguard to prevent her from being a target of those scammers?
Answer: We understand your concern about scams, especially with recent news about scams and frauds in Malaysia. Given the prevalence of such issues, it’s crucial to safeguard your wife’s inheritance.
One effective way to do this is by writing a Will. By writing a Will, you can list down all the assets you have and the distribution you want. You will have the freedom to appoint whoever you trust to be your personal representative in your will to manage your estate once you pass on.
The personal representative you appoint is named as executor, who should then unlock your assets through a court order, pay off your debts and distribute your assets according to your will instructions.
Based on your concerns, you should also include a testamentary trust in your will. Through the testamentary trust, you can set any instruction you want to your trustee and he/she will then follow them to distribute assets or income to your wife over a specified period of time rather than giving your wife your assets in one lump sum.
Hence, you can instruct your trustee to provide monthly allowance to your wife, pay off her medical expenses based on her needs, giveher an annual vacation claim, birthday claim or even festive claims.
In a nutshell, having a comprehensive estate planning with clear distribution instructions will surely protect your wife’s financial security and well-being, no mater what the future holds. We suggest you engage a professional estate planner so that he could provide holistic estate planning advice and comprehensive solutions according to your concerns.
Question 2: I came from a big family and Chinese New Year has always been filled with lots of joy and laughter. I have three children, two of them have migrated to overseas. They would come back every year to celebrate but I think if my wife and I have passed on, they may not come back anymore. Is it possible that I create a fund that can cover all their expenses for coming back? I just want to make sure that they don’t see coming back for Chinese New Year as a burden.
Answer: It’s wonderful that you want to ensure your children can continue to come back and celebrate Chinese New Year without feeling burdened by expenses. You can certainly include provisions related to setting up a fund for your children’s Chinese New Year trip and expenses in your will, specifically under a testamentary trust.
A testamentary trust is a type of trust that is established through a person’s will and comes into effect upon death. It forms part of a deceased individual’s last will and testament.
The trust outlines how the assets of the deceased will be managed and distributed for the benefit of specific beneficiaries. In your testamentary trust, you can outline your wishes, specify the purpose of the fund, and designate how it should be managed.
Here are some key points to consider when including such provisions in your will:
Firstly, you can explicitly state in your testamentary trust that a specific fund is established to cover the expenses associated with your children coming back for Chinese New Year celebration. To ensure the fund is sufficient, you will need to calculate the potential expenses associated with your children’s travel, accommodation, and other related costs for their annual homecoming for the Chinese New Year.
Consider factors like flights, lodging, meals and any cultural or festive activities. This could be based on past expenses or an estimate of future costs.
Also consider, including provisions for unforeseen circumstances, such as changes in the cost of living, fluctuation in travel expenses, or any other factors that might impact the fund’s ability to cover future expenses.
Secondly, you will need to provide instructions on how the funds are to be distributed to your children, whether through a lump sum manner or a percentagebased manner. You can also include regular reviews and adjustments based on the changing circumstances in the future. This ensures flexibility in managing the fund over time.
Thirdly, you will need to appoint someone trustworthy to ensure all your instructions stated in your testamentary trust are implemented properly. Hence, you will need to appoint a trustee who will be responsible for managing the fund and ensuring that it is used for the intended purpose.
If you are afraid of not being able to find someone that is trustworthy, you can also consider appointing a trust corporation to ensure all your instructions are being executed fairly and transparently.
Given the complexities involved, it is strongly recommended that you consult with a qualified estate planner, who has sufficient experience. They will be able to provide you with personalised advice based on your specific circumstances and local regulations.