Borneo Post with the expert help of Rockwills Trustee Bhd, the leading specialist in estate planning having pioneered wills and trust 24 years ago, is publishing a regular Q&A column on estate planning. It will feature questions which readers have in mind but don’t know who to ask:
Question 1: I’m thinking of making a donation to my church after my passing. Can I name the church in the insurance nomination form? Since I’m not married, can I also give some parts of the insurance money to my nephew as well?
Rockwills Answer: Under the Financial Services Act 2013, you can only nominate a living person as nominee. Therefore, you cannot name the church in the nomination form.
If you name your nephew as a nominee to receive either all or part of the insurance proceeds, unfortunately, he will be collecting the monies on behalf of your estate. This means he will not be collecting as beneficiary. This is because under the Financial Services Act 2013, there are 3 groups of persons recognised as beneficiary. If you are married or have a child, then you may name your spouse and/or child as beneficiary. However, if you are not married and/or have any child of your own, then you may nominate your parent(s) as a beneficiary.
An option would be to remove any nomination made in the insurance policy and naming the church and your nephew in your Will where you can decide whether such amount are to be paid I one lump sum to them or periodically for a few years.
If you wish the church and your nephew to receive the insurance proceeds without going through the probate process, you may setup a trust using the insurance policy as an asset. This is commonly known as an insurance trust.
In such a trust, you can also instruct for payment to be made to them in one lump sum or periodically. You may even include that payment is subject to conditions such as to pay for tuition for the nephew or maintenance of the church only. One of the benefits of such a trust is that you may benefit from the insurance proceeds in the event you suffer serious disability and require the insurance proceeds to pay for your medical and maintenance.
To create such a trust, you will need to appoint a trust which should be a trust company who will carry out your instructions as well as be accountable towards the usage of the funds. We suggest that you seek a professional estate planner and explain your situation in detail and let him advise whether you need a Trust or not.
Question 2: Like most grandfathers who want to spend time with their grandchildren, I’m taking care of my grandchildren for my son most of the time. As I’m thinking of writing a Will, can I appoint someone to take care of my grandchildren when I have passed on?
Rockwills Answer: It is true that grandparents do take care of their grandchildren due to hectic working schedules of the parents. You spend so much time with your grandchildren and see you them grow up from baby to toddler to a child and you may even send them to and pick them up from kindergarten or school.
You have a special bond with them and because of this, it is natural you would want to protect them in case you are not around. Unfortunately, under the Guardianship of Infants Act 1961, only a parent of a minor child has the right to appoint a guardian. However, you can still leave a legacy to your grandchildren by writing a will to benefit them or by setting up a Trust for them.
You can instruct your executor or trustee to give them a specific amount of money as a birthday gift or Chinese New Year ang pow even when they get married in the future. You will be amazed at the flexibility of the legacy you can leave behind to your grandchildren by using a Will or Trust. Do seek professional advice on what options you have when setting up a will or trust.
This Q&A Column in published as a joint public service and educational initiative with Rockwills Trustee Bhd. Please email your questions related to Estate Planning to [email protected] or Rockwills’ Training, Marketing & Business Development Assistant General Manager Sam Chan ([email protected]).