Estate Planning is only for the Rich? Not anymore!
Estate planning is something that always ends up hushed in our daily conversations. We have many misconceptions of estate planning. Often times, we think of it as something taboo as it reminds us of impending death or we think that estate planning is limited to the rich and wealthy.
According to Investopedia, Estate Planning is the preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death. In layman’s words, it is the writing of your own will and planning for the management of your own assets. As a young millennial, estate planning was something that never crossed my mind. It was never much of a concern for me personally as death was a distant thought. But, I soon got to realise that estate planning is not just for people who are rich or old, but estate planning is relevant and necessary for every person. Hence, I decided to probe into what estate planning truly means.
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Curious to find out more, I did my homework on estate planning by asking people around me. In the midst of doing so, I had the privilege of having a session on estate planning with iFAST Global Markets where I found out more about how estate planning is not limited to the wealthy, but also to the common man on the street.
The session was led by Mr Joe Lin and Mr Bernard Chan, both having extensive experience in the financial industry, dealing with investment and risk management matters. It surprises me that both in their own capacity are Investment Advisory Directors at iFAST Global Markets, but is also part of the estate planning team. Joe is the team lead, while Bernard is the senior planner.
The session felt more like a good conversation about planning for the future, than a lecture on estate planning which I expected. As we shared and discussed on the issue of estate planning, he shared with me that estate planning is more than an instrument for long-term planning: It is a very personal journey for every individual, not a detached and impersonal process.
This personal touch is what differentiates iFAST Global Markets’ estate planning from the rest. While other companies may deal with it in a professional and detached manner, iFAST Global Markets believes in striking a relationship with customers to fully understand and ensure their well-being through the entire process. They believe that estate planning goes beyond a working relationship, and is a means to make a difference in the lives of others and seeing that love, care and concern is extended within families.
Many see estate planning as a clinical and cold process but through the session I had with iFAST Global Markets, it broadened my perspective on what estate planning was, and I saw how it could be applicable across the board for everyone.
Here are some main takeaways that I got from the session, which challenged the pre-existing misconceptions that I had surrounding the idea of estate planning
1. Estate planning is for everyone, whether you’re rich or poor.
There is a big misconception that estate planning is only for the rich, given that the rich has a lot of assets and thus, estate planning is important for them to manage their assets while the layman do not have that much assets to manage with. However, that is not true as everyone has a considerable amount of assets to begin with, no matter how much wealth you have.
Firstly, most Singaporeans own a HDB flat which are assets by themselves. According to the Housing Development Board, the median price of a 4-room HDB resale flat in Ang Mo Kio is $460,000. With over 80% of Singaporeans owning their own HDB flat, the average Singaporean will have close to half a million in assets, which can subsequently be liquidated. To some people, half a million dollars is not a lot but to others, it can be a lot of money for them. Coupled with the savings they have accumulated, Singaporeans generally have a sizeable amount of assets when they retire as we live in a country where we naturally accumulate assets. Given the amount of assets accumulated over the years, it is important to manage them well so as to ensure that whatever assets they have does not get squandered by the next generation. Estate planning is not only for the people who live at District 10, but also for the people who live in ubiquitous HDB flats.
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2. Estate planning is not only a vehicle to administer your own will but it is also a way to show love, care and concern to the people around you.
Estate planning can be seen as clinical and cold as it seems that family relations are de-personalised to a matter of allocation of assets. Family relations are then valued in terms of the assets that is being passed down. Sometimes, drafting your own will can be a tiring and complicated process as family members begin to fight over these assets. As a result, many are unwilling to initiate the process and thus, they are apathetic towards the process and usually done in an obliging way.
However, estate planning is more than what it is perceived to be. In fact, it is far from being impersonal. Estate planning is a way for people to show that they love and care for the family, thus thinking for the next generation. More than simply drafting a will, estate planning also entails providing for the people they love, ensuring that all will go well even after they leave this earth.
Whether you’re young or old, life is unpredictable. These days, there are news of young parents dying in car crashes overseas in the papers, while their children survive. In such cases, without estate planning, the child usually suffers and long-drawn processes are required before the assets can be properly managed. In other cases, when it comes to managing family businesses, family members with different interests can lead the family business on the road of destruction and ruin. The after effects of not engaging in estate planning can be often times painful and heartbreaking. Eventually, estate planning comes out of a heart of wanting the next generation to benefit. Just like how your parents and grandparents took care of you, you want to care for the ones you love the most. Although estate planning is a legal instrument for will administration, it is also cognisant of a social aspect; to love and care for others even when you are no longer around. That is the greatest gift you can give to your loved ones.
For many, estate planning is not important compared to many other goals in life such as earning more money, climbing the corporate ladder or providing a stable family. It is a topic that is constantly overlooked and misconceived of. Nonetheless, thinking of estate planning is important as it is not just a matter of drafting your own will and managing your own assets. It is preparing for the future and loving the family around you with intentional and careful planning to ensure that your family is well taken care of in the long run.
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