Because some investments yield a million memories. Legacy planning solutions. By HSBC.

Transcription

1 Because some investments yield a million memories. Legacy planning solutions. By HSBC.

2 Practical pointers on legacy planning Liquidity of Estate Under most countries jurisdictions, when a person dies, someone has to deal with their money, property and possessions their estate. In order to do this, the deceased s assets may be frozen until the court issues a probate order, which gives a specified person the right to administer the estate. Only then can the deceased s frozen assets be accessed and any money withdrawn or transferred from his/her bank accounts. Probate applications can take a long time, and this may cause additional stress to families who are going through an emotional period. In order to avoid the unnecessary hassle and ensuring your wealth is distributed according to your wishes, it is prudent to have a proper wealth transfer that gives you control over your hard-earned money. Make your wealth last for generations The fruition of your years of hard work is best shared with your loved ones. Plan well ahead to allocate your accumulated wealth for yourself and your heirs. Through proper legacy planning, you will enjoy smart allocation of your wealth. Separate your estate from retirement funds Many people may think that evenly distributing all your wealth is already a good plan to transfer wealth. There may be individual circumstances where there is merit to separating your estate from your retirement funds. The advantages are: 1) Ensures you have sufficient funds for retirement; 2) You can manage your retirement funds separately from your wealth transfer funds without worrying about depleting the wealth you set aside for your inheritance; 3) Insurance can serve as a legacy planning tool, which may further increase the amount of estate benefit while securing your family with protection 1. 1 Subject to underwriting conditions.

3 The beauty of legacy planning - an illustration Wealth transfer of family business and assets Since the early 50 s, a lot of people in Asia accumulated their wealth by starting their own business, expecting the next generation within the family to continue running it. In some cases, not all the children are keen to take up the business and may choose to pursue their own career. When faced with a business and assets that cannot be divided, you may not be able to fairly distribute your estate to your successors. There are circumstances where life insurance can help create more liquid assets to facilitate the distribution of your estate as you wish. The guaranteed sum from the life insurance policy may be distributed sooner to your beneficiary to meet emergency needs. Without legacy planning You and your spouse are retiring after 40 years of working. You have about S$2.5 million in savings, and intend to leave S$1.5 million to your four grandchildren. You have allocated S$1 million for your retirement, which is insufficient if you wish to maintain your current standard of living during retirement. Set aside S$1.5 million cash by will You and your spouse S$1 million for your retirement An Estate Inventory An estate may comprise some of the following: Real estate Securities (stocks, bonds, and unit trusts) Bank accounts Collectibles Life insurance policies Business All tangible personal property (e.g.cars,boats) Pension funds Your estate may cover various asset classes, some of which cannot be easily divided among your heirs. Grandchild 1 With legacy planning Grandchild 2 Grandchild 3 Grandchild 4 With a legacy planning solution, you and your spouse purchase a policy with S$400,000 premium for a sum assured of S$1.4 million. This allows you to set aside S$500,000 for your grandchildren and you will have S$2 million for your retirement - 100% more than you would have had without legacy planning. You and your spouse Set aside S$500,000 (only a third of what you originally planned to set aside) S$2 million for your retirement (100% more for your retirement) Set aside S$400,000 with sum assured of S$1.4 million for a legacy planning solution Leave S$100,000 cash by will Grandchild 1 Grandchild 2 Grandchild 3 Grandchild 4 1

4 The products you need to help transfer your wealth The key to success lies in action In addition to protecting your family, a life insurance policy can be an effective legacy planning tool. There are different insurance plans to help you distribute your wealth as you wish while protecting your privacy. Your needs in wealth transfer Benefits of using insurance plans as legacy planning tool Preserve your assets You want to transfer your wealth in its entirety to your heirs. Increase liquidity of your asset You don t want your assets to be frozen due to the probate process. Help distribute wealth You want to pass on your wealth in accordance with your wishes in the event that the estate contains assets that may be less liquid than others. Distribute assets according to your wish You want to have control and privacy in your wealth transfer plan. Asset protection By using an insurance policy as part of your overall wealth transfer tools, you can better secure the amount of estate benefit for your beneficiary. Liquidity In most cases, life insurance claims are not subject to probate, so beneficiaries may receive the funds sooner 2. Help distribute wealth When faced with assets such as a business that cannot be easily divided, there are circumstances when life insurance can help create more liquid assets 3 to facilitate the distribution of your estate as you wish. Control over your wealth distribution You can set aside a desired fixed sum assured to your designated beneficiaries 4 as you wish. In your journey through life, you will encounter many challenges and many opportunities. We hope this guide will prove to be an opportunity that will set the path to developing the plans you need to achieve your personal goals. We encourage you to take the first important steps in your financial journey as soon as possible. The easiest and most productive step is to contact your HSBC Relationship Manager, who will take you through the HSBC Goal Planner a financial planning tool designed to help your investment portfolio effectively meet your needs. The key features and benefits of HSBC Goal Planner: Comprehensive wealth solutions Know your needs, goals and investment preferences with our fact finder. Risk profiling This tool assesses your risk tolerance. Tailored wealth solutions Every solution is designed to fit your risk profile and specific needs. Financial planning reports At the end of your Goal Planning session, you will receive a report, giving you an overview of your financial standing. It can be used for future reference as and when you need. 2 The availability of death benefit is subject to claims handling procedures. 3 Subject to features of insurance plans. 4 Designation of beneficiary is subject to underwriting requirements such as insurable interests. Speak to us today. Call 1800-HSBC NOW ( ) Click Visit any HSBC branch

5 Important notes 1. This document has been prepared for information only. Information contained in this document is obtained from sources believed to be reliable; however The Hongkong and Shanghai Banking Corporation Limited (the Bank ) does not guarantee its completeness or accuracy. 2. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment or insurance products nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The specific investment objectives, personal situation and particular needs of any person have not been taken in consideration. You should therefore not rely on it as investment advice. 3. Opinions and estimates expressed are subject to change without notice and the Bank expressly disclaims any and all liability for representations and warranties, express or implied, contained herein, or for omissions. All charts and graphs are from publicly available sources or proprietary data. 4. The information herein is not to be construed as an offer or solicitation for the subscription, purchase or sale of any investment and insurance product. The mention of any investment and insurance product should not be construed as representing a recommendation to buy or sell that product, nor does it represent a forecast on future performance of the product. 5. Any information herein is given on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. The Bank shall not be held liable for any loss or damage arising out of any person s reliance upon this information. Each customer should make his/her buy and sell decision based on his/her own view and seek his/her own independent legal or financial advice. Past performance is not indicative of future performance. 6. Buying a life insurance policy is a long-term commitment. An early termination of the policy usually incurs high cost and the surrender value payable may be less than the total premiums paid. Issued by The Hongkong and Shanghai Banking Corporation Limited, which is incorporated in the Hong Kong SAR with limited liability. Printed on environmentally friendly paper.