I’m married with kids.
Who will provide for my loved ones if I pass on prematurely?
The above question is valid and honestly speaking, I began to have this thought only after I had gotten married and had given birth to my daughter. I felt such a huge sense of responsibility and have realised that my life is no longer mine but is now tied up with my husband and my precious baby daughter.
This thought has ignited a desire in me to learn about estate planning and since then, I had become a full-time estate planner and had established WG Legacy, a full-fledged estate planning firm in Malaysia.
For 7+ years, I had the privilege of serving hundreds of married couples just like yourself and I discovered that most married couples would tend to:
a. Nominate their spouse as the sole beneficiary of their estate.
b. Appoint their spouse as the sole executor of their written will.
Understandably, this is an act that arises out of love, trust, and a burning desire to be responsible for their loved ones. With that being said, the idea is a flawed one and it potentially leads to a series of complications when it comes to estate distribution and management for your loved ones.
Here, in this quick guide, I’ll share 2 key blindspots that are often overlooked by married couples when preparing an estate plan for their loved ones.
Blindspot 1: Will Your Spouse Manage the Estates Prudently?
Well, for a start, I find the answer to be relatively situational for it depends on a person’s level of financial intelligence. There are some who are financially savvy while there are others who are not.
Think about it.
If you are a breadwinner and your spouse is not exactly financially-interested, is any of the situations stated below a possibility:
a. Your spouse has no expertise or desire to run a business that was left behind for him or her.
b. Your spouse is pressured to lend money to help out relatives and friends. The monies lended are almost unrecoverable. This may arise from emergencies that are genuine or pressures asserted by people with malicious intentions.
c. Your spouse is a spendthrift and thus, will inevitably squander your estate on luxurious spendings and a lavish lifestyle.
Now, let’s say, your spouse is smart, educated, and a highly trustworthy person. Could it be possible for your spouse to fail in business and investment ventures due to mistakes, accidents, or any unforeseen circumstances such as a political, economic, and pandemic crisis, or a combination of all crises like COVID-19?
As you can see, life throws a curveball to all and there is no guarantee that your spouse could manage the estate bequeathed effectively and thus, fulfilling your original intention of providing for your loved ones.
Blindspot 2: Will Your Spouse Survive Until Your Children Reach Adulthood?
Let’s say, you’ve nominated your spouse to be the only beneficiary of all of your estates and the sole executor of your written will.
Here are my questions:
a. Does your spouse fully understand the roles and responsibilities of being the executor of your Will? Trust me. It is no easy feat as the entire process is energy, time, and money consuming. Are you sure that your spouse is willing to take on this immense responsibility while juggling between a breadwinner and a single parent to your children?
b. What happens if your spouse passes on before he or she completes the roles required as the executor of your Will? Who shall step up to replace your spouse and safeguard the interest of your children?
c. Also, what if your spouse, upon inheriting your estate, passes on intestate ie. without a Will? Yup, it is a double whammy but it did happen before. Thus, this happens, how then shall your children inherit your estates or should I say, your spouse’s estates, assuming that they are still minors?
d. What happens if you pass on simultaneously with your spouse in an accident and your children are still minors? Who shall execute your will? How then could your estate be bequeathed to your children?
Clearly, the idea of nominating your spouse as the beneficiary of all your estate and the sole executor of your written will is a flawed one and certainly, it is not helpful in guaranteeing needful financial support for your children, especially if they are minors.
So, What Should I Do?
Here, I’ll list down a couple of things that you can start considering and discuss with your spouse:
1. Set Your Objectives
This may include answering the following questions:
a. How much living expenses would you like to provide for your loved ones?
b. How much university fees would you like to prepare for your children?
c. Would you like to leave behind cash, EPF monies, and the sum assured of life insurance policies on a lump-sum basis, a regular basis, or a mixture of both?
d. Would you like to bequeath all of your real estate to your spouse?
e. Who and how will your businesses be managed upon your passing?
2. Appoint a Legal Guardian
This is important especially if you have minor children. A legal guardian shall be someone whom both you and your spouse can trust as the person appointed is entrusted to safeguard the interest of your minor children if both you and your spouse predeceased prematurely.
3. Formulate a Comprehensive Estate Plan for Your Family
Personally, I use a combination of tools namely, life insurance policies, will, and trust to effectively tackle the two blindspots mentioned above, hence, ensuring financial security and peace to my family members.
As such, I would like to encourage you to re-examine the current estate plan for your family so that you can further fortify the financial future for all your loved ones. If you wish to explore for more ideas, please feel free to book yourself a 30-minute private session with our estate planning consultant by filling the details below: