Estate Planning Tools and Their Limintations
Lunch break - lunch provided
Case studies to illustrate estate planning
I will use the following case studies to explain how estate planning could have averted the below mentioned issues. Attendees may submit other real life stories (including own) as case studies to be discuss subject to availability of time.
Real story 1: Mdm Xiao (her real name) became a widow with a child. She had a problem getting the Letter of Administration because two Administrations were required due to a beneficiary who was still a minor. In the meantime, all her husband’s assets were frozen and she faced a financial crisis. She appealed to a Member of Parliament for help. (Source: “In sickness & in death”, ST 30 April 2011). If you were her husband, what should you have done to prevent her from falling into such financial crisis?
Real story 2: A CPF Member nominated her sister under CPF Nomination. When the CPF Member passed away, her CPF monies ended up with the Official Assignee because beneficiary was bankrupt at the time when the CPF Member passed away. (Source: “Judge: CPF funds left to bankrupt can be seized”, ST 13 Oct 2010). If you were the CPF Member, what should you have done to prevent the CPF money from falling into the hands of the Official Assignee?
Real story 3: Tammy’s (not her real name) late father left a property to her in his Will when she was just 16 years old. At 21 years old, her mother felt that she was still too young to manage the property. Tammy was asked to sign a consent form to allow her mother to continue to hold the property. Tammy is now 40 years old (not her real age) but she realized that the ‘consent’ form was to renounce her right to the property. The property is now worth millions due to the long-term appreciation of real estate. If Tammy’s mother passes away, the property will be distributed to her and siblings equally although this property was originally meant solely for her. If you were Tammy's father, what should you have done to protect the interest of Tammy?
Real story 4: Mr. Kwek (not his real name) is a beneficiary of his father’s CPF monies. His late father nominated him and his brother under the CPF Nomination. However, he does not know whether were there other nominees as CPF Board refused to disclose such details to him despite being the Executor of his father’s estate. If you were Mr. Kwek's father, what should you have done to ensure that the full details of the nomination is disclosed to all nominees?
Real story 5: Mr Cheong (his real name) and his mother owned a HDB under joint-tenancy. He paid for all mortgages and expenses for the flat. In 1986, Mr. Cheong transferred the ownership of the existing flat to his mother for her to stay because he was allocated a new flat. When his mother passed away, the court ruled that the proceeds of flat shall be distributed to all his mother’s children equally despite Mr. Cheong was one who paid for the flat. (Cheong Yoke Kuen and Others v Cheong Kwok Kiong, Court of Appeal 13 April 1999). If you were Mr. Cheong, what should you have done to prevent the flat from being distributed to others?
Real story 6: Mdm Quek (not her real name) passed away leaving behind just $10,000 in savings at a bank. The bank account was frozen. The legal fee to get the Letter of Administration was prohibitively expensive considering the amount in the bank was so small. Is there a better way to withdraw this money legally and at a reasonable cost?
Real story 7: Mr. Koh Cheong Heng transferred his sole ownership of a HDB to one of joint-tenant with his wife. Then, he thought that he was going to die and was concerned that his wife will have no place to stay. But later on, his health drastically improved but his wife’s health unexpectedly became much worst than his. In the meantime, he had second thoughts about the transfer. Thus, he had to apply to the High Court to reverse the transaction. He incurred great stress and cost. In retrospect, what Mr. Koh should have done? (Source: "Court lets retiree cancel gift of HDB flat to wife", ST 7 March 2011).
Wilfred Ling is a CFA charter holder and is a Chartered Financial Consultant®. Moreover, he is an ISO 22222 (SCI) certified person. The ISO 22222 certification means that he has been assessed by independent third party in relation to his financial planning process, ethics, competency, experience and thus adheres to the International Standard for financial planning.
As a fee-based professional financial planning practitioner, he has written many comprehensive financial plans for fee-paying clients. His clients seek his advice on a wide range of financial planning issues such as credit management, insurance, investments, retirement planning, tax planning and estate planning. His clients come from all walks of life such as:
Business owners, IT managers, IT consultants, teachers, engineers, students, retirees, directors, radiographers, airline cabin crews, actuarial consultants, vice-presidents (banks), accountants, restaurant supervisors, weather forecasters, National Servicemen, editors, police officers, veterinarian, R&D engineers, prison officers, laboratory technologist, risk management (banks), QA/Process Managers, analysts, salespersons, contractors, civil engineers, pharmacists, legal counsels, commercial pilots, salvage divers, auditors, housewives, finance managers, university lecturers, tax consultants, chief financial controllers, doctors, IFA investment specialists and financial advisers.
Wilfred Ling is the FA Associate Director with PromiseLand Independent Pte Ltd, which is licensed by Monetary Authority of Singapore to provide advice on insurance and collective investment schemes. He leads the Ethos Wealth Planners which is a group of advisers in PromiseLand.
He is also a member of the CFA Institute, CFA Singapore and Association of Financial Advisers (Singapore).
