Kee Siew Poh is a senior legacy planner with Lighthouse Legacy Planners, as well as an Associate Director with one of the largest financial advisory firms in Singapore. Her mission is to help top-notch key executives and professionals achieve a purposeful life beyond finance.
Through a well-constructed value-based Wealth Creation & Estate Plan, she helps families grow from success to significance. The 3 “cheques” which she creates for her clients give them the assurance and confidence to redefine their retirement and to live the life they have always wanted. Beyond the passing of ‘valuables’, she helps her clients pass on some of the values that make them successful, such that their loved ones have enough to do something meaningful but not too much that they do nothing.
LLP: Hi Kee! Thank you for taking the time to have this interview with us. Could you share with us why you decided to be a legacy planner?
Kee: There is a quote which I often share with people. That is “There is nothing more certain than the certainty of death, and there is nothing more uncertain as the timing and moments at which death occurs”. We should have a plan because the event is certain. And we should plan ahead and not procrastinate because the timing is uncertain.
In my years of practice in helping clients to create wealth, I realised there is a gap in the preservation of their values even though their wealth is passed on to their children. It is saddening to hear of families entering dispute over the deceased’s estate and I believe that is the last thing the deceased would want to leave behind. Hence, the focus of my practice is to help clients pass on the values that made them successful so that their loved ones can receive and perpetuate these values in their own lives.
LLP: In your opinion, why do Singaporeans need to engage an Estate Planner now more than ever?
Kee: The average Singaporean family is among the world’s wealthiest, and yet also experiences one of the lowest replacement ratios. In the past, a HDB flat could be worth S$20,000 and the number of children in the family could reach up to 10. There was not much to plan for with each child inheriting S$2,000. Today, a HDB flat could be worth S$1m, and it may be shared by only a few.
Proper Estate Planning for the average Singaporean family, therefore, goes beyond a simple nomination and writing a Will. A family Trust can be used to provide asset protection for your loved ones against the perils of mismanagement of hard-earned monies. Wealth and assets could be lost very quickly if you do not plan for potential pitfalls and challenging family circumstances in the unforeseeable future.
LLP: So, a Will gives instruction regarding how to divide the deceased’s estate and a Trust adds a further layer of how much to distribute with time?
Kee: That is correct!
LLP: What are some scenarios which we should consider getting a Trust?
Kee: That is a great question! A Trust is useful for everyone but there are three scenarios I would like to highlight as it is especially useful.
Firstly, when our loved ones are too young and too financially immature to handle wealth. With only a simple Will in place, our estate will simply be distributed as a lump sum. Hence, when our children reach the age of 18, they will have the full insurance proceeds which sometimes can be worth $1m or more. When they turn 21, they will acquire the title of the properties which effectively could catapult them into the millionaire status. In short, while we take years to build our wealth, our children could become instant millionaires without even lifting a finger to work. With a Trust in place, you have the ability to time your estate distribution, whether it be delayed or staggered. So, instead of receiving the proceeds at 18 or 21, our children can receive it at a later age (e.g. 30 or 35) when they are more financially mature. It is also possible for us to structure the payout in accordance with their development and educational needs.
Secondly, a recent statistic showed that dementia affects more than 1 in 5 persons aged above 65 and more than 1 in 2 persons aged above 85. One of the major concerns flowing from an elderly person’s mental incapacity is in relating to the management of his assets and property affairs. If he suffers from mental incapacity and he alone is the sole operator of his bank account and other financial affairs, during the time of his mental incapacity but prior to death, no other person has the authority to manage his affairs unless so authorised by the Court. With a Lasting Power of Attorney (LPA) Form 2, the entire process is simplified, and one can choose to appoint a Corporate Trustee (e.g. Precepts Trustee) to manage his property and financial matters. When the LPA Form 2 is linked to the Trust, it is an effective way to ensure that one is well-protected financially and well taken care of in the event of mental incapacity. This is especially important as the Singapore population ages because one may be alone with considerable assets upon the demise of their spouse.
Lastly, many parents are worried and concerned with what happens to their special needs children when they pass on. With the support from the Ministry of Social and Family Development (MSF) and the National Council of Social Service (NCSS), the Special Needs Trust Company Limited (SNTC) was set up in 2008 as a charity with the objective to enhance the financial security and well-being of persons with special needs through the provision of Trust services. The SNTC requires just a minimum of $5k to set up the trust account. Insurance proceeds or CPF savings could then be nominated to the Trust to ensure children are being provided for financially in the years to come.
LLP: From the three scenarios, I can see how a Trust is useful for generational planning.
Kee: Indeed, it is common for us to seek recommendations to protect our income now in the event something happens. Yet, we seldom consider what happens after our demise. The three scenarios are non-exhaustive, and it is highly recommended to meet up with an Estate Planner to ensure our wealth is protected and our children are set up for success. Every family is different and unique, and a Trust can be constructed to suit your family’s objective(s).
LLP: Thank you for taking the time to share the benefits of having a family Trust with our readers. Do you have any last words for us?
Kee: Many people upon reaching half time, have attained a good measure of success but after that, don’t quite know what to do with the rest of their lives. How can one move from success to significance? If success is often about the 3 As – Achievements, Acquisitions & Accolades, Significance is often about the 3 Is – how we Inspire, Influence & Impact Lives. Such values are often caught and not taught. This is also where a well-structured Trust (in combination with a Will and LPA) can help to transfer and perpetuate such values, beyond just the valuables.