Question

Hi, my name is Annie. I’m a single parent of two sons namely, Jayden and Aiden. Jayden is 25 years old and he works as an executive in a local firm. Aiden is now 20 years old and he has autism. We live in a terrace house in Cheras. Presently, I had amassed RM 150,000 in cash savings and RM 500,000 in total sum assured from my life insurance policies. 

Personally, I wish that Jayden will take care of Aiden if I pass on in the future. As such, my question is, ‘Should I leave behind all of my estates to Jayden and trust that he will continue to look after Aiden upon my passing via a written will?’ 


Answer: 

This is common with families who have a member that requires special needs. 

Often, parents will assume and trust that their child or children who are normal to look after his or her sibling who requires special needs. Hence, these parents will leave behind all their estates to their normal child or children and will hope that a portion of the estates will be used to care for their special needs sibling. 

In this article, I’ll share four main blindspots that all parents should take note of before passing on all estates to normal children via a written will. 


#1: Will Jayden Start His Own Family? 

Let’s take Jayden as an example. 

Is it possible for him to get married and start his own family? 

If Annie passed on and had bequeathed all of her estates to Jayden, can Jayden use them to fund his marriage, buy and furnish his own home? 

And, if Jayden has kids, what will be his priority? Is it his kids or Aiden? 

As you can see, it is not as easy as it seems. It is likely for Jayden to be placed in a difficult position where he has to choose between the welfare of his family or Aiden, his brother. Of course, it would have been a lot easier if Jayden is able to find himself an understanding wife. But, who can guarantee that? 


#2: Could Jayden Mismanage the Estates? 

Let’s say, Jayden is sincere in wanting to care for Aiden, his brother. 

He could use the estates bequeathed to start a business or invest. Hence, could it be possible for Jayden to lose the estates or a portion of them due to his own errors, errors of others (staff, partners, business associates… etc) or be affected negatively by unforeseen circumstances like the current COVID-19 pandemic? 

As such, it is possible for Jayden to lose the estates given and fail to take care of Aiden, his little brother. 


#3: If Jayden Passes on Prematurely … 

This is a double whammy to Aiden. 

Here is a question. If Annie passed all her estates to Jayden, will he do an estate plan to protect his family’s financial wellbeing (if he is married) and Aiden? 

If Jayden passes on without a proper estate plan, his estates, including the ones he inherited from Annie, would be frozen under the estate distribution process. If Jayden is not married, his estates shall be distributed to his biological father if he is alive. It is possible for Aiden to not receive a single cent from the estates if Jayden’s biological father chooses to keep the estates himself. But, if Jayden has an existing family, his estates shall be distributed to his wife and children. Aiden will not receive a single cent from it unless Jayden’s wife gives it to him. 

If Jayden passes on with a proper estate plan, it is also possible for Aiden to not receive any of these estates if Jayden intentionally leaves him out. 


#4: If Jayden is being Hospitalised / Comatosed … 

Life throws a curveball. 

Let’s say Jayden met with an accident and thus, was hospitalised. If he does not have a medical card (don’t be surprised), how would he pay for his medical bills incurred? Can you see it is very likely from Annie’s estates and if that is the case for Jayden, how then will Jayden support Aiden’s living expenses? 

What about if Jayden is being comatosed? In this case, whatever he holds onto, for instance, cash, investments … etc, nobody can get access to them as no one has the authority to do so. Hence, if Jayden is being comatosed, Annie’s estates will be ‘comatosed’ too and thus, could not be used to support Aiden. 


So, What Then is a Possible Solution for Annie? 

The answer lies in her setting up trusts. 

Each trust can be established to serve a specific purpose. 

For instance, let’s say Annie wants to bequeath her terrace house to Jayden but also intends to provide Aiden a permanent place for him to reside in for as long as he lives. Annie can set up a trust where the ownership title of her property is first transferred to the trust upon her passing. Annie can name Aiden as a living tenant of the property, which allows him to stay in the house for eternity. Then, Annie can name Jayden and his future family as beneficiaries of the trust where the property would then be transferred to them after Aiden passes on. 

When it comes to cash and life insurance policies, Annie could form a trust that would distribute her sum of monies in accordance to her intended amount, the frequency, and beneficiaries stipulated in her trust. Also, Annie could nominate a protector of her trust to safeguard the welfare of Aiden. As such, with a trust set up, Annie is able to continue to provide for Aiden’s livelihood while at the same time, reducing Jayden’s burden in caring for Aiden upon Annie’s passing. 


Conclusion: 

If you are a parent of a child with special needs, I would strongly encourage you to consider setting up trusts to safeguard the financial livelihoods of your child, especially if he is a special needs child. 

For a start, you could fill in your details below to book yourself a 30-minute consultation session with our estate planning consultant to explore for ideas and strategies to do so. 


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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