How close is my current estate plan from being truly comprehensive? 

In this write-up, I’ll share 5 main factors to consider to assess if your estate plan is truly comprehensive. They can be reviewed every two years once. Also, if you are beginning to plan for your estate plan, you could start building one with the 5 factors that I’ll list down below: 


Factor #1: Triggered Events 

A triggered event is an incident that would cause an individual to lose his ability to earn regular income and provide for his loved ones. For example, they would include death, total permanent disability, critical illness, dementia, and also the situation where the individual is missing (could not ascertain if he is alive or has been pronounced dead). 

So, a complete estate plan is one that covers all the above triggered events. 


Factor #2: Assets 

This involves identifying the assets that you like to bequeath to your loved ones in the event of a triggered event. First, to make it simple, we could separate our assets into immovable assets and movable assets. 

Immovable assets would often consist of assets that are not divisible and would be harder to be converted into cash in an instant. They would include one’s real estates, cars, jewelries, precious metals, watches, art pieces, and collectibles. In most cases, they will be distributed and administered with a will document. 

Movable assets would consist of bank accounts, stocks, EPF Account, unit trusts and life insurance policies. They can be liquidated into cash instantly. At present times, they are multiple ways to administer these assets and they depend on: 


Factor #3: Beneficiaries 

They comprise your parents, spouse, children, other relatives that you will want to bless and charitable organisations that you want to contribute to. 

Knowing who you like to give is just the tip of an iceberg. 


Understanding your purposes, the processes involved to transfer the ownership of your estates to your intended beneficiaries, and its legitimacy and having the ability to deal with them is very crucial to avoid any potential losses from abuse and mismanagement of your estates. 

This involves asking practical questions such as: 


– Are our beneficiaries (parents and spouse) financially savvy? 
– Who shall be the legal guardian of our minor children? 
– How shall our beneficiaries use the estates bequeathed to them? 
– Is it practical to bequeath a Malaysian estate to a beneficiary living overseas? 
– Will there be conflicts that will arise among joint beneficiaries of an asset? 


As such, it is a mistake to believe that one could do up their estate plan on their own by writing themselves a simple will as it is cost-effective. But, many people fail to realise that this simple will could be counterproductive as it had caused a lot of friction, headaches, tensions, and conflicts among beneficiaries. 

It is possible for one to cause larger financial uncertainties with a simple will. So here, if you have a sizable estate, try not to be penny wise, pound foolish. It will be most ideal to have your estate plan done professionally. 

Here, once we had identified who our beneficiaries are, we shall move onto the next consideration: 


Factor #4: Immediate Gifts

Immediate gifts are estates that you want to bequeath with immediate effect in the event of an occurrence of a triggered event. 

Here, let’s say we have Mr. Tan. 

Mr. Tan’s beneficiaries consist of his wife, his children and his parents. If Mr. Tan dies prematurely, his immediate gifts may comprise of cash to pay for legal fees associated to expedite Mr. Tan’s will document and to fund his family member’s immediate living expenses for the next 1-2 years. 


Factor #5: Delayed Gifts 

Delayed gifts are estates that you would want to distribute not immediately but at a designated time in the future to your intended beneficiaries. 

Here, let me give you a couple of examples of delayed gifts: 

If Mr. Tan is 40 years old and he has a 5-year old son, his delayed gift to his child could be a sum of money (let’s say RM 200,000) to pay for his university fees. In this case, his son would inherit from Mr. Tan’s money, if he successfully enrolled into a university in the future. Hence, Mr. Tan could dictate how his money shall be used by his beneficiary and thus, preventing it from being squandered away. 

Next, Mr. Tan plans to continue providing RM 10,000 a month in living expenses to his family members for 10 years upon a triggered event. As such, Mr. Tan had bought a life insurance policy with a sum assured of RM 1.2 million. For him, his delayed gift could be to assign his policy to a living trust and instruct his trustee to pay out RM 10,000 a month to his family members for this purpose. As such, it prevents the RM 1.2 million from being squandered instantly, due to abuse or mismanagement from his beneficiaries. 

The above two examples are related to movable assets. 

Here, I’ll share an example of a delayed gift related to an immovable asset. 

Let’s say Mr. Tan owns a personal residence. He plans to bequeath this property to his son once he is 30 years old and only after his wife passes on. As such, the property shall be a delayed gift to his son. 


Conclusion: 

So, there you have it – the 5 Factors to Craft a Comprehensive Estate Plan. 

As you can see, it covers a wide area of expertise such as will writing, formation of trust and life insurance policies to craft out a comprehensive estate plan that will offer financial security to your loved ones in the event of a triggered event. 

Instead of figuring them out yourself, you can seek professional assistance from a qualified estate planner. Hence, if that is you, you could begin by filling up the details below to book a short 30-minute session with our estate planner: 


Jocelline Chee
Jocelline Chee

As a Full-time Senior Professional Estate Planner, Jocelline seeks to understand every client’s unique asset holdings and legacy wishes, before recommending a suitable Will and/or Trust structure to meet their needs. She is well-equipped to point out various blindspots in Legacy Planning, that her clients may have. With Jocelline, you can be assured that your legacy planning journey will feel more like having an open-hearted coffee session with a trusted friend, as compared to a formal and awkward session with an equipped advisor.

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