[ By Terry Saw ]
We should never take anything for granted – this includes everything from our health, our loved ones to all the creature comforts that we are extremely fortunate to be surrounded with. While the unfolding of fate is something that is completely out of our hands, what we can do is take the ownership of safeguarding our assets so our families (especially our children) can be spared from any added burden or stress, should the inevitable happens. Which is why, this week, we turn to Elison Wong, for her practical legal tips and knowledge on how you can go about setting up a will or a trust fund for your loved ones. As the saying goes, one hour of planning saves 10 hours of doing – so, let’s get started.
RealityCheck: Great to have you, Elison. Can you please tell us a little about yourself and your professional background?
Elison Wong: “Sure. I have been in legal practice since 1998 and my firm specializes in litigation, conveyancing, estate planning and commercial matters.”
RC: What Are Some Of The Basics Individuals Or Parents Need To Consider When Setting Up A Will Or Trust Fund For Their Children?
EW: “Generally, in my opinion, as long as the person has started working or planning to purchase a property or is in business above the age of 18 should start planning their will. A trust fund can always be set up later when the individual achieves a certain level of wealth.
“For starters, when planning for your family, parents will need to first make a will for themselves, then the process of setting up the trust fund for their child/children can commence.
“Here are some basic factors that will need to be taken into consideration:
- The choice of executor/trustee/trust companies
- The type of assets to give or administer as the distribution or administration process of assets differ. For example, if the assets are properties, then the executor is required to follow the land conveyance laws and complete the transfer process at the appropriate land registry or if the assets are liquid like monies, the executor just needs to go to that particular bank branch.
- The age of beneficiaries who may be minors. Reason being, this affects the distribution. For example, if the child/children are minors, the executor may hold the assets on trust until such child/children reaches 18 or even older.
- The duration of trust: is it in perpetuity or for a limited period?
- The conditions attached to the gift or trust funds. For example, only the male child inherits the family home or the capital from the trust fund is for education only.
RC: How does a will differ from a trust fund, and which (or under what circumstances) would you recommend one over the other?
EW: The choice or decision depends on the intention of the parents and the purpose of the trust.
“A will is suitable for those who are intending to give away certain assets such as properties, monies, cars, jewelry to their parents, children, loved ones, close friends.
“A trust fund is ongoing until the events provided under the trust have taken place or the duration of the trust expires or the fund itself is depleted.”
RC: What are the key points of consideration when it comes to setting up a will or a trust fund for neurotypical children vs special needs children?
EW: “In my opinion, for neurotypical children, parents may make a will and give away their assets to their children knowing that their child/children would have the physical and cognitive ability to understand and manage the gift.
“This opposes to the situation for special needs child/children, who may not possess that ability and have to rely on external care to help them function. Where their mobility and cognitive capabilities are different, a third party such as trustee or trustees or trust company may be more appropriate for administration of assets.”
RC: Can you share a little on any safeguarding or legal measures that are in place for special needs children – especially in the rare event that a will or trust fund needs to be executed without the presence of a reliable guardian, family member or care taker?
EW: “This is tough because ultimately, you will need a reliable person or persons to oversee that the trust fund is managed responsibly, that the trust company appointed to administer the trust is still around, that the funds will be invested responsibly and the proceeds are properly channeled to the child/children for living and medical expenses.”
RC: What are some of your tips on next steps should a parent wish to get started?
EW: “Start with creating a will for yourself, so that your loved ones, spouse, family or relatives knows your wishes.
“Also, for married couples, it is imperative that you inform your husband or wife of the whereabouts of your assets or compile a portfolio of your assets and investments so that it is easier to track and prepare the asset list for administration by your executor or trustee.”
“For parents, start your financial preparation as early as possible, such as setting aside a sum for the child/children’s future care, so if anything should happen and the person passes away, there is already a care fund in place. The fund will lessen the financial burden on your spouse, parents, relatives, and loved ones who may need to assume the care of your child /children. It does not matter if the sum is small, as it also depends on your own financial resources.”“Another important point, is to really identify someone who you can trust to be the executor/trustee to administer and distribute your assets and potential guardian of your children as a starting point.” If you wish you seek a further legal consult on setting up your will or a trust fund for your child, contact Elison Wong at firstname.lastname@example.org or message her at +60123516181.