Illustrations

Illustrations of a hypothetical case regarding Will, Testamentary Trust and Living Trust

Illustration 1:

Mr & Mrs Lim, both aged 39 are successful executives who travel frequently oversea for work assignments. They have 2 children aged 8 and 5. Both have elderly parents in their late 60’s.

What are the concerns of Mr & Mrs Lim?

In the event of pre-mature death, to provide for the following:-

  • Children’s health, medical and maintenance.
  • Livelihood of elderly parents

Solutions:

  • Additional life Insurance taken up by Mr & Mrs Lim to ensure that enough funds for survivors’ living expenses and estate liquidity.
  • Mr & Mrs Lim each drafted a Will appointing each other as 1st Executor and Trustee.
  • Identified sibling who share similar cultural background and beliefs to be contingent Guardian for children in event of common disaster happening to Mr & Mrs Lim.
  • 2 Testamentary Trusts in Will –
    1. Children’s Trust - To ensure that fund set aside for children is distributed to them equally in 2 tranches once at age 30 and the balance at age 40. Regular payouts are made to Guardian for education, medical and maintenance of children.
    2. Parents’ Trust – Regular payment to parents for medical and daily maintenance.
  • Appointment of a contingent Executor and Trustee – A Professional Trustee Company is appointed in event that primary Executor and Trustee (Mr or Mrs Lim) is unable to perform the role.

Illustration 2:

Mr Tan, aged 45 a self-employed with 2 boys aged 8 and 12. Wife aged 40 works as a Bank manager. The family travels oversea regularly. Both have elderly parents in their 70’s.

What are the concerns of Mr & Mrs Tan?

In the event of pre-mature death, to provide for the following:-

  • Children’s health, medical and maintenance.
  • Livelihood of elderly parents.
  • Mr Tan is currently donating on a regular basis to his Church but wish to ensure that funds will continue to flow to the Church and other charities should he pass on.

Solutions:

  • Mr & Mrs Tan each drafted a Will appointing each other as 1st Executor and Trustee.
  • A Living Trust with provisions to have Trust assets invested over a period of 100 years. 5% of the investments to be distributed yearly equally among beneficiaries, namely – spouse, children and designated church and charity. In the event of children’s death, the grandchildren of Mr & Mrs Tan to inherit their shares. At the end of the Trust period, all assets in Trust to be liquidated and distributed to rightful beneficiaries at that point in time.
  • A whole life insurance is assigned into the Living Trust to provide money for estate clearance expenses immediately upon death without need for probate.
  • Identified sibling who share similar cultural background and beliefs to be contingent Guardian for children in event of common disaster happening to Mr & Mrs Tan.
  • Appoint a contingent Executor and Trustee – A Professional Trustee Company is appointed in event that primary Executor and Trustee (Mr or Mrs Tan) is unable to perform the role.
  • Residuary estate to be assigned into the Living Trust.

Will Writing

Trust Planning

Planned Giving

Illustrations