1. The Future of Legacy Planning Is Integrated
As high-net-worth individuals (HNWIs) in Singapore navigate increasingly complex asset classes, cross-border exposure, and family dynamics, legacy planning has evolved beyond writing a will or creating a trust. Today’s forward-looking families are combining legal structures with insurance-backed financial solutions to create resilient, tax-efficient, and dispute-proof succession plans.
In this article, we explore why this dual approach is essential, how legal and insurance tools complement each other, and how to get started.
2. Legal Structures: The Foundation of Control and Protection
For HNWIs, legal structures offer control, protection, and certainty. These can include:
(a) Wills and Lasting Powers of Attorney (LPA) – Ensure that your intentions are legally respected both during incapacity and after death.
(b) Trusts – Protect your assets, avoid probate, and manage wealth over generations with flexibility and confidentiality.
(c) Holding Companies / Family Investment Companies – Consolidate ownership of businesses or portfolios under a single vehicle with clear governance.
(d) Shareholders’ Agreements and Buy-Sell Clauses – Facilitate smooth business succession while avoiding intra-family disputes.
While these instruments provide a strong legal framework, they often come with liquidity constraints, especially upon death or incapacity.
3. Where Insurance Comes In: Liquidity, Equalisation & Tax Efficiency
Insurance-based financial solutions offer liquidity and certainty at moments where legal structures alone might falter. For example:
(a) Universal Life Insurance can provide immediate, tax-free payouts to heirs, bypassing probate delays.
(b) Second-to-Die Insurance ensures liquidity only after both spouses pass, which can be used to equalise estates among children.
(c) Insurance-Funded Trusts allow wealth to pass in a controlled and confidential manner, especially useful for multi-jurisdictional families.
(d) Keyman or Buy-Sell Insurance ensures that business interests are protected and successors are funded for smooth transitions.
By integrating insurance into a legal legacy plan, HNWIs can preserve asset value, avoid fire-sale scenarios, and minimise disputes among heirs.
4. Case Study: The Business Owner and the Unequal Estate
Take Mr. Tan, a 68-year-old business owner with three children. His eldest child runs the family business, while the others have no interest in it. His concern? Passing the business to one child may trigger resentment from the others.
Legal Solution: A will and trust structure to pass the company shares to his eldest child, while protecting control via trust provisions.
Insurance Solution: A universal life policy, held in trust, designating his other two children as beneficiaries with equal cash payouts.
Result: Family harmony, fair treatment, and a smooth business transition – all while avoiding forced liquidation or litigation.
5. Why HNW Families Must Act Now
Global regulations, tax regimes, and cross-border disclosure rules are changing rapidly. What worked a decade ago may no longer be effective — especially for families with:
(a) Properties or beneficiaries across multiple jurisdictions
(b) Significant exposure to business risk
(c) Second marriages or blended families
(d) Children with special needs or differing levels of financial maturity
A dual strategy provides not only peace of mind but ensures your legacy is preserved with precision.
6. Start with a Legal-Insurance Legacy Review
At 28 Falcon Law Corporation, we offer tailored legal advisory services for high-net-worth individuals and families, integrating seamlessly with trusted financial advisers to structure holistic legacy solutions.
Book a confidential consultation today to review your existing legacy plan or begin building one from scratch.
Waltson Tan Director +65 8079 0028 waltson.tan@28falconlaw.com |
Office address: 101A Upper Cross Street #13-11, People’s Park Centre Singapore 058358 |