Question

Hi, my name is Ronnie. I’m happily married to Cindy and we are blessed with Ed, our 2-year old son. I intend to support my family’s living expenses and prepare a fund worth RM 250,000 to pay for Ed’s university fees in the future. At present, I have a personal residence, two cars, EPF, unit trust funds, and savings. Thus, my question is, ‘Should I write a will to pass on all my belongings to Cindy for I trust her to take care of Ed and herself if I pass on prematurely?’ 


Answer: 

In contrast to conventional wisdom, my answer is nope. 

Having a written will does not offer true financial security to both Cindy and Ed. It is possible for Ronnie’s wishes of financing Ed’s university fees in the future to not be realised. Here, I’ll list down 5 situations where Ronnie’s belongings could potentially be exhausted or mismanaged if he names Cindy as his beneficiary in his last will and testament. 


Situation 1: Failed Business / Investment Ventures

It is possible for Cindy, upon inheriting Ronnie’s estate, to embark on a business venture or have it invested into a series of vehicles which include stocks, bonds, unit trust funds, ETFs, real estate and so on and so forth. She could either be an experienced businesswoman or investor or one who is trying out as a newbie. 

While I believe in business and investing as means to grow and preserve wealth in the long-run, I too acknowledge the possibility of failing in both business and investments as they carry some degree of risks. To name a few, the risks include errors from either Cindy or her associated partners and staff, market risks and a series of external events that are beyond control of anyone such as COVID-19.

So, the question is: ‘How would Cindy fund Ed’s education fees if she loses all of the monies left behind as a result of failures in businesses and investments?’ 


Situation 2: Incidents 

Two quick questions:

a. Does Cindy have an adequate amount of medical and illness coverages? 

b. What about her family members such as her parents, siblings and relatives? 


Let’s say, if Cindy has to be hospitalised due to an accident or a diagnosis of one critical illness, who will be the one footing in the medical bills and living cost for herself and Ed? Would it be from her life insurer or from her pocket or from her inheritance of Ronnie’s estates? 

Also, what if one of Cindy’s relatives, let’s say her mother has to be hospitalised and her medical coverage was not sufficient to pay for her medical bills? Would Cindy be footing in the bill for her mother? Thus, in both cases, it is possible for Ronnie’s estates to be used for purposes other than to fund Ed’s education fees in the future. 


Situation 3: Cindy Remarries

Cindy could remarry if she finds herself a new relationship. There is a possibility for her to have children with her new husband if that happens. Hence, it is very likely for Cindy to write a will to bequeath her estates (inclusive of Ronnie’s) to: 



a. Solely to Cindy’s new husband.

b. Cindy’s new husband, Ed, and Ed’s half-siblings. 


In other words, there is a chance for Ed to not receive or to receive a portion of his father’s estates from Cindy’s will, if she has hers written. 


Situation 4: Cindy Passes on / Comatosed

What if Cindy passes on or is comatosed after receiving Ronnie’s estates shortly after her husband’s passing? 

If Cindy fails to write herself a valid will, her estate (inclusive of Ronnie’s) will be distributed based on the Distribution Act 1958 where potential recipients could be Cindy’s surviving parents (if any) and Ed. The entire process could take about 2-5 years upon Cindy’s passing and the next question is, ‘Who shall raise Ed and pay for his living expenses during this period?’ 

Also, if Cindy doesn’t have a surviving parent, who shall then execute the estate distribution process for Ed as he is a minor? Who is his legal guardian? Could he or she appointed (most likely one of Cindy’s relatives) act in the best interest of Ed until he reaches adulthood? 

The situation is worse if Cindy is comatosed. This is because firstly, her will shall not be effective as she is still alive and secondly, she couldn’t gain access to her own bank accounts as she is comatosed. In other words, she has the money but she couldn’t use it to do anything. So, who will take care of Ed in this situation?


Situation 5: Abuse and Oppression

This could be a situation where Cindy squanders Ronnie’s estates left behind on luxurious spendings (retail therapy). In addition, Cindy may be victimised as she was oppressed by friends and relatives who are con-artists, swindlers, and even scammers. You may find these stories in newspapers and social media and you may even find them rather comical. But, they do occur from time to time and it would be wise for Ronnie to keep this in mind when doing his estate planning. 


Conclusion: 

So, what’s best for Cindy and Ed? 

As you can see, having a will by itself is not enough for Ronnie to make sure the livelihood for both Cindy and Ed are well-protected. 

Personally, I reckon that Ronnie should consider a combination of tools such as life insurance policies, will, and trust to formulate a comprehensive estate plan in order to safeguard the financial interest of his loved ones. If your situation is like Ronnie, you could start by booking yourself a short 30-minute consultation session with our estate planning consultant where you would be given tips and solutions to best craft your family’s financial safety net. 

You can do so by filling up the details below: 


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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