I Hate Estate Planning – the Malaysian Context?

I Hate Estate Planning – the Malaysian Context?

“Is it what you have not thought of?”

Malaysians generally do not understand the meaning of estate planning and the need to plan. The word “estate” simply refers to the total assets and liabilities calculated at death. Such estates, be it of a small, medium or large size, are determined during one’s life.

The wealth creation process of building an estate is achieved through countless effort, contributions and perseverance throughout one’s life. But the complexities of distributing the wealth have given rise to legal hassles and possible family disputes over the assets left behind. In the worst cases, the hard- earned money is depleted due to improper planning or the lack of a plan.

Most people would probably think of estate planning last when it comes to wealth management. But what about the time and money that you have bought during your lifetime that creates your ESTATE? It is your hard earned wealth that you have built and these wealth need to be PLANNED

Estate Planning isn’t about Death

Many people tend to shy away from the topic of estate planning, thinking that it’s a morbid topic. But it isn’t all about death.

Estate planning is a continuation of human ambition and the fulfillment of that ambition by acquiring and holding property. It is a life statement of a commitment to continue those legacies, while maintaining a lifestyle that is comfortable for you and your family. It’s the ability to share your success with others by passing it down to them so that they can continue your journey. It allows you the opportunity to control your success both during life and after death.

Estate Planning can be well defined as…

“Process of Organizing One’s Property through Elements of Preservation, Accumulation and Distribution with Overall Intent of Enhancing and Sustaining the Financial Security of Individuals, their Families and Future Beneficiaries of the Estate”

It is not about just writing a Will and distributing your wealth according to your wishes upon death. It is about Preserving what you currently have, Accumulating what have been preserved and Distributing it the way you wanted it to the best interest of your beloved family according to your goals and objectives after death.

Estate Planning is then, living planning. Your estate, after all, is all that you have made and built through careful planning, despite the risks that you have faced during the lifetime. One good example is your potential creditor and with lawsuit, it could end your wealth. Therefore it is your attempt to bring it to the next level by utilizing your resources to create an environment for yourself and others that will be sufficient for you and will extend beyond your life. It is the ability to share your success with others by passing it down to them to continue your journey. It allows you the opportunity to control your success both during life and after death.

The People and Processes in Estate Planning

Estate planning isn’t just about legal documents and processes. It is about the people around you – your spouses, children, grandchildren, favourite family members and close friends. It’s for the sake of their continued security and prosperity in your absence, that you plan your estate. Proper planning allows you to maximize and preserve your hard-earned wealth so they can continue your unfinished goals. It allows them to enhance the wealth left behind by you and carry on the legacy you have built to the next generation. Estate planning also allows you to fulfill your meaning and place in life and make you a successful person in society.

The process involves lawyers, accountants, insurance practitioners, banks, financial planners and other financial intermediaries that you work with during your lifetime. They have to help you navigate society’s rules, and the red tape and courts of law that accompany those rules.

The process of planning involves dollars, lots of dollars, to create and maintain lifestyles for you and your family while you are alive and for your loved ones after your death. Often a sacrifice is required – for example, the sacrifice of your dollars to purchase life insurance to fuel your estate. An investment portfolio should be created in the hope that your money will work for you.

Educating the Malaysian Public – an Uphill Battle

Malaysians probably know what they want to do with their property both during life and on death. But majority do not know the implication if they don’t plan. In this essence, the law, which possesses all the red tapes that create hassles to loved ones, will plan for them. The law of succession that is the Distribution Act 1958 (amended 1997) has a place for non-planners. Therefore, if you are sensitive to the red tape imposed by the law, you need professional help in accomplishing your planning objectives.

Our goal at A.D. FINANCIAL is creating awareness to Malaysians at large and reaching out to them on the need of planning for the estate. With the right comfort level of knowledge, people should be able to confidently seek out professional advisers to fulfill their needs and not be tainted by any sales individuals.

On completing this 1st article, you should have a good grasp of estate planning processes and techniques. You should be able to differentiate between a knowledgeable professional and the not- so knowledgeable professional. We hope to give you enough understanding of estate planning process to enable you to participate in a meaningful dialogue with your advisers in accomplishing your estate planning objectives and have the ability to communicate your goals and objectives to them.

What we do: Determining Client’s Goals and Objectives

During the course of our practice, we always ask our clients, “How do you get to where you are today?” They will share with us their success stories for at least an hour, narrating the ups and downs in their adventurous journey of building a business and, their future aspirations. Best of all, we get to hear about the principles and philosophy that they carry with them and that have become a part of them.

Then comes the question they have never thought of before - “Are you ON the Estate or IN your Estate?” As usual, they will ponder and shyly say, “What do you mean?” By “ON the estate” we mean an individual who is already successful, rich and financially independent and are apprehensive about their wealth. For “IN the estate’ we refer to people who are in the process of building the estate (although they are wealthy), and haven’t thought of planning ahead.

Though some of the responses have been different, they all reveal disturbing thoughts. Most high complex networth individuals do not plan their estate. At best, they have written a Will. Even so, they should choose Will planning instead of just Will writing.

We then move on by saying, “Have you thought of anyone that you know and would like them to continue your journey?” Typically, they will sum up their thoughts that can be summarized as follows:

I would like to give my property to whom I want, in the way I want. Furthermore I want my beneficiary to receive my property only when I want them to receive it

The above statement seems to be a simple wish that anyone could wish for but if you can read between their lines, it contains instructions, wishes or objectives that they want to accomplish. One good example is Generational Wealth Strategy planning where the idea of giving the wealth to their children but never let them own it until they reach the age of 30 or 35 years old. Such strategy has never crossed the mind of most of our clients. Preventing silver spoon heirs from squandering the hard-earned wealth, leading and coaching them the importance of wealth management are part of Generational Wealth Strategies.

There is more to discover in order to do proper estate planning and an Estate Planner needs to possess the ability to mind map a client’s thoughts. A willing ear and a sparring partner when it comes to estate planning is what most clients want. Our main objective is to assist you in understanding the rules, to take the magic out of planning and replace it with knowledge and comfort. We hope to expand your planning horizons by putting in on paper, and help you define the objectives that you know best and let you rest assured that the objectives has been well taken care off.

Since you are unique, therefore planning for your estate must be unique. The best plan must fit you and since every individual has their own uniqueness, this planning need cannot be solved by simply obtaining a shelf estate planning product. The plan must be comfortable, like your favourite pair of shoes. You must be aware that estate planning is a process, for without understanding there can be no comfort - instead, very often uncertainty and anxiety is created.

Procrastination – the Losing Battle

As the saying goes “Why do today when I can put it off tomorrow?” With estate planning, you will not get a second chance and that tomorrow may instantly become today. All of us know our Date of Birth but we do not know our Date of Death. None of us can predict the timing of our death with certainty. Although statistically, most of us live to tomorrow, but why take the big risk?

Planning it today is much like any other calculated risk that you take during your life time, such as investing into a business and or buying a property that you feel will fetch good returns. The only difference in estate planning is that it is intangible. You can’t hold it and see it and yet you know it’s done. Therefore planning now is mandatory.

Estate Planning is a process that begins within your life and can continue far after death. It is my hope that this first volume of my newsletter will motivate the public at large to plan the right way and right away. The time for planning, using these new and exciting opportunity is now!
“At A.D. FINANCIAL, we start our relationships by listening to you and putting…YOU FIRST"

Alvin Yap is the Principal Consultant and Group Managing Director of A.D. Financial Sdn Bhd (“ADF”). Under his leadership, ADF has expanded its footprint in Asia by establishing offices in Singapore and Hong Kong to provide consultancy for high net worth clients from Singapore, Indonesia, Vietnam, China and other countries. Besides that, he is highly sought after to speak in regional and international family wealth planning seminars. His expertise in Business Succession Planning has led many business owners and founders of listed companies to seek his advice on their complex business continuation and personal wealth matters.

Alvin is currently devoting his Practice to Multi Family Office Advisory for high net worth Individuals in structuring their complex wealth matters with a view to preserve their hard earned wealth. A strong believer of “Preservation First, Accumulation Second” and “Distribution Last”, Alvin’s expertise injects a fresh perspective on how wealth and family values can be preserved for many generations in Asian families.

If it is worth striving for, it is worth preserving


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