A better way to pass your assets to your family

FROM A CUSTOMER

I wish to get your expert view.

Currently, many banks are encouraging clients to buy Insurance Trusts as part of estate planning. Typically, it is a significant single upfront payment with both guaranteed and projected returns and insurance payable upon death to named Trust beneficiaries.

Advantages are supposed to be faster probate process, additional estate duty exemptions and protection from creditors

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MY REPLY

Here a few points.

1. Be careful of the product. You must find out what is the return that you get. Most products offer a fairly low return, due to the high commission paid to the agent or the bank.

2. If estate duty is a consideration, you have two options. One is to write it as a trust policy under section 73, which allows the policy to be treated as a separate estate. This can be done independently of the product. It enjoys special estate duty.

But, under a trust policy, the rights are transferred from the policyholder to the beneficiaries - so the policyholder cannot change the mind and "take back" the money.

3. Another option is to place it under a revocable nomination. This is available from NTUC Income and later from the other insurance company as well.

4. I suggest that you go to read about it in www.KnowYourInsurance.com.sg. Or give a telephone call to X who is our expert on this matter.

5. What you want to do can be done with NTUC Income, and you get a much better return!