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Legacy Planning – The Essential Next Step After Retirement Planning

Ravinder Kapur

When you’ve accumulated a substantial amount of wealth over your lifetime, it becomes crucial that you plan how it will be distributed upon your passing. Unfortunately, many individuals do not devote adequate time to this exercise.

You may have already spent decades in amassing large sums of money and in buying assets, so why not spend a fraction of that time in ensuring that your financial legacy will eventually be handled according to your desires?

To that end, you may decide to leave a portion of your wealth for certain charities. Donating some money to a cause that is close to your heart could be the best way to do some good and to be remembered by others. This is a path chosen by many other wealthy individuals who have gained much satisfaction from philanthropy. Start your legacy planning here.

It is equally, if not more important to set your own house in order. Will your spouse and children or your extended family squabble over your wealth when you are gone? Many families show no trace of disagreement over financial matters while the patriarch is alive. But harmony and warmth can soon degenerate into discord.

An intra-family dispute can even reach the courts. Court proceedings can be very unforgiving on personal ties in the pursuit of justice. In many instances, even with a fair verdict, reconciliation could be difficult. That is not something you would like to happen within your own family.


Discussing financial matters with your heirs

An essential part of legacy planning is holding a frank conversation with the individuals who will inherit your wealth. Putting off this task for some future date could be a mistake.

As you become older, you may face health problems and you could need a greater degree of care. At that stage of your life, it would be even more difficult to discuss the plans that you have in mind for your wealth.

When you take up this topic with your children, tell them how you plan to distribute your estate. It is important to explain the reasons behind your decisions. Certain types of assets could be easy to divide. Cash and securities can be shared in the exact proportion that you plan. But real estate assets are more difficult to split.

Distributing jewellery and artefacts could present its own set of problems. Although it is possible to estimate their value with a fair degree of accuracy, some of these items could hold sentimental value. It is quite possible that one or more of your heirs could be upset by the decisions that you make.

How can you prevent this sort of unpleasantness? Obviously, there is no easy way out. You have to keep the dynamics in your family in mind and arrive at the most suitable solution.

If you are a business owner, the situation can get even more complicated.


Ensuring the continuity of a family business

Source: Shutterstock

An individual’s legacy may include a successful business. As the owner of the company, you may want the firm to continue operations after you retire from active management. Your motivation to do this could stem from the fact that you have spent long years in building up the business. Breaking it up and selling it could be the last thing that you want.

If your legacy includes a business, then your planning exercise will have to incorporate details about how the company will be run in your absence. Your heirs may get along with each other and may already be part of the business. If this is your situation, then your task is fairly simple.

But if one or more of your heirs is not interested in running the business, the situation can become complex. You will have to figure out a way to compensate the non-participating heir. This will involve two issues.

First, you will need to arrive at a fair valuation of your business. Once this is done, it will be necessary to plan for the liquidity that will be required to pay the heir who will not be involved in the business.


Legacy planning with the help of Etiqa Insurance

Etiqa Insurance is owned by Maybank Ageas Holdings Berhad, a joint venture company that is 69% owned by Maybank, one of Asia’s leading banking groups with more than 22 million customers worldwide, and 31% owned by Ageas, an international insurance group with 33 million customers across 16 countries.

Etiqa’s legacy planning solutions are tailored to meet the specific requirements of different high net worth customers, to ensure your wealth reaches its full potential and your legacy remains intact for your loved ones to enjoy.


3 scenarios: This is how can Etiqa’s products help you in your legacy planning



If you just turned 50 and had $2 million, with plans to put aside a $1 million inheritance for your spouse and two children, it would leave you with $1 million for your retirement. Instead, you could purchase an Etiqa legacy policy for $350,000. The single premium plan offers a death coverage of $1 million, the equivalent of your intended inheritance for your family.

With that, you would have $1.65 million for your retirement – $650,000 more than you originally planned – while still leaving the same amount of inheritance for your family.


Leaving the family home behind

What if you are leaving a property worth $2 million for your wife and only child? Leave no room for disputes by purchasing a single premium whole life insurance plan from Etiqa, with a guaranteed death benefit that is equivalent to the value of the property.

Upon your passing, each of your family members will be left with sufficient funds for either of them to buy out the share of the other family member, reducing any friction that may result from in compatible plans for the property.

Also, if you purchase the policy between ages 31 to 50, you can get a guaranteed death benefit of up to 227% of the policy sum insured. The guaranteed death benefit is valid until age 90.


Keeping the family business – and the family – intact

Perhaps what you need to leave behind is not a property, but a thriving family business. The stakes are higher for the business to continue to function, given the employees whose livelihoods depend on it.

You could opt to purchase a single premium legacy plan with a guaranteed coverage equivalent to the value of your business.

In much the same way as leaving your family home behind, your family members can choose to use the payout from the policy to buy out the share of other family members who may not wish to participate in the business, ensuring your assets are divided equally and preserving harmony in your family.


Creating an effective legacy plan

Dividing your assets between your heirs can be a challenging task. Very often, you could have to address conflicting requirements from your family members. Making a plan that is fair and also takes care of the individual needs of each of your heirs can be difficult.

How can you ensure that you do justice to the exercise? It is best to start early. Discuss the important issues with your family members. Don’t forget to update your will. The document that you made several years ago may need to be changed to take new circumstances into account.

Remember that the objective of a legacy plan is to utilise your wealth in a manner that is in accordance with your values and the causes that you believe in.

A well-thought out legacy planning strategy will result in a smooth transition, where your wealth will move into the hands of your heirs and to the charities that you have designated, in a trouble-free manner.


Begin your legacy planning strategy here.

(By Ravinder Kapur)

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