There is a popular Chinese saying, which is: ‘富不过三代’. 

It literally means ‘Wealth does not last three generations and beyond’. The logic behind this stigma is illustrated with the first generation hustling hard to build a fortune from nothing but a pioneering spirit, the second generation attempting to retain the fortune passed to him, and finally, with the third generation who’ll eventually squander the family’s fortune away. As such, the questions are: 


‘How to break away from this stigma?’ 

‘Can we build a legacy which could last for three generations and beyond?’ 


In this article, I’ll explain two different routes, which are used to prolong wealth for as long as he possibly could. The first route is common while the second is a path less travelled. They are as follow: 


Path 1: The Saver 

Meet Mr. Lee, father of two sons: Lee Bai and Lee Hom. 

Mr. Lee has amassed a little more than RM 1 million in savings. It is a product of decades of hardwork and frugality. Mr. Lee remains frugal, spends as little as he possibly can because he plans to leave behind RM 500,000 each for Lee Bai and Lee Hom. 

Years later, Mr. Lee passes on. Lee Bai and Lee Hom receive their RM 500,000 in inheritance from their father. They had adopted the virtue of frugality and both brothers had managed to preserve their capital of RM 500,000 given to them in inheritance as they use only its interest and their personal active income to pay for their family’s living expenses. 

Both brothers have two sons each. Lee Bai’s sons are Lee Wei and Lee Pin while Lee Hom’s sons are Lee Beng and Lee Guan. These are Mr. Lee’s four grandsons. Lee Bai intends to bequeath RM 250,000 each to Lee Wei and Lee Pin. Lee Hom too has the same plan as he plans to leave behind RM 250,000 each to his sons, Lee Beng and Lee Guan. 

As you can see, over two generations, the RM 1 million which Mr. Lee amassed, had been splitted into four equal proportions, leaving behind RM 250,000 each to Mr. Lee’s grandsons: Lee Wei, Lee Pin, Lee Beng and Lee Guan. 


Path 2: The Maximizer 

Alternatively, meet Mr. Ho, also a father of two sons: Ho Lee and Ho Min. 

Likewise, Mr. Ho had amassed a little more than RM 1 million in savings. Mr. Ho had bought several life insurance policies which has a combined sum assured of RM 2 million and had assigned them to his insurance trust, where both his sons were nominated as equal beneficiaries of his trust. Mr. Ho is assured that in the event of his passing, his two sons shall inherit RM 1 million each from the trust. 

Hence, Mr. Ho spends a huge portion of his RM 1 million in travelling the world, fully enjoying his retirement. 

Years later, Mr. Ho passes on. The insurers paid out RM 2 million in sum assured to Mr. Ho’s insurance trust. His trustee would then dispense a regular payout to Ho Lee and Ho Min, where the amount had been first predetermined by Mr. Ho himself via his trust deed. Meanwhile, as for the monies yet to be distributed, it shall be preserved by the trustee through wealth preservation funds. 

Ho Lee and Ho Min are appreciative of their late father’s wisdom. Thus, the two brothers had decided to use a small portion of their regular payouts received to buy themselves life insurance policies with a combined sum assured of as much as RM 2 million. They then assign their policies to their own insurance trust and nominated their children as equal beneficiaries of their trust. 

Likewise, both Ho Lee and Ho Min have two sons each. Ho Lee’s sons are Ho Jin and Ho Jun while Ho Min’s sons are Ho Kee and Ho Keong. These are essentially Mr. Ho’s four grandsons. Once brothers, Ho Lee and Ho Min had passed on, the four grandsons will each inherit RM 1 million from their father’s trust. 

Somehow, the RM 1 million amassed by Mr. Ho, had miraculously produced RM 1 million each to his four grandsons, which is unlike Mr. Lee. 


The RM 3 Million Difference Maker 

Compare the routes taken by Mr. Lee’s family and Mr. Ho’s. 

The Lee’s frugality has resulted in RM 250,000 each for his four grandsons while the Ho’s savviness had resulted in RM 1,000,000 each for his four grandsons. As such, which of the two routes do you prefer if you have RM 1,000,000 today? 

So, what is the difference maker? 

The answer is estate planning, which is the art of harnessing the power of tools such as life insurance, will document and trust to not only safeguard but also to create additional wealth for the benefit of your children and their children. This is the difference maker that had enabled many wealthy individuals and families to break the stigma of ‘富不过三代’ and effectively, build a long-lasting legacy. 

Here is the thing. 

Estate planning is not just for the rich and wealthy. The same tools they use are unawarely affordable to the masses and can be applied to us all. As such, today, if you are exploring the possibilities of building the same legacy like Mr. Ho, you may first fill in your particulars below to book yourself a 30-minute consultation session, where we will like to exchange ideas on how you and your family could best protect what you have built for decades and preserve them for many years or generations to come.


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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