Recently I met up with a client who is a single parent. He wanted to leave his house, cash, other assets including insurance payouts to his 3 young children in the event he passes on. His concern, as with many other parents, was his children’s ability to manage the huge sum of money.
I proposed him to include Testamentary Trust in his Will, which will distribute monthly payouts to cover his children’s living expenses till they are financially independent. In this way, the lump sum of money will be protected and will not be squandered by his children, nor will scammers have the chance to con them of large sums of money.
At the same time, I suggested him to use his Testamentary Trust for perpetuation of family values such as thriftiness and hard work to his children. He was surprised how this could be done. One condition I proposed him to set was that his children need to graduate from University before they can continue to receive their monthly payouts. Another condition which could be set is that the children need to be gainfully employed for at least 3 years before they can receive the rest of the inheritance.
Before the meeting, my client thought Estate Planning is simply writing a Will and stating who gets what. He was pleasantly surprised at the level of customisation and control that he would still have when he is no longer around.
PS: There were many other details such as guardianship of children that were discussed but not stated in this article.
Disclaimer: All information are for informational purposes only and should not be relied upon as financial advice.