Financial Planning To Include Estate Planning

Warren Yap

Senior Estate & Succession Practitioner
Precepts Legacy Pte Ltd

Warren Yap, who is a Senior Estate & Succession Practitioner with PreceptsGroup shares with us that becoming an Estate & Succession Practitioner added a new dimension to his financial planning expertise.

When did you become an Estate & Succession Practitioner (ESP) at Precepts?
I joined Precepts as an Estate & Succession Practitioner in 2012.

What prompted you to consider a career and business as an ESP at Precepts? Why did you choose estate planning?
I joined the financial services industry in 1999 after I left my first job as a regular in the SAF. After a few years in the financial planning career, I realised there is a gap in my financial planning business model. I helped many clients set up their insurance and investment programmes, and as long as they were around, all these could have been properly managed.

But what if my clients passed away prematurely or suffered mental incapacity? Who would ensure that the wealth they have created is preserved for their loved ones? I could have referred my clients to law firms to handle their estate planning. However, law firms were unlikely to have an intimate knowledge of my client’s family background, finances, and values.

Then, in 2012, I chanced upon Precepts, known as Rockwills then. I had the opportunity to find out more about their services and business model. Precepts was able to provide the training, licensing, and support for me to provide an estate planning advisory service for my clients. With this model, I was able to be directly involved in setting up my clients’ estate plans.

What difference has Precepts made in your journey?
Joining Precepts has broadened my view of financial planning. Financial planning is not just about selling a financial product to clients. It must include estate planning. Without that, how do we ensure the smooth distribution and preservation of wealth for clients’ beneficiaries throughout their lifetimes?

What are some of your core beliefs in estate planning?
There is no physical products in estate planning – it is a contract to deliver a promise for our clients. It is my ability to take an empathetic approach when having a conversation with my clients. Listening and understanding their concerns, their intentions for their family and knowing their family background are important in crafting a good estate plan. I believe that no financial planning is complete without estate planning.

What do you think clients should look out for when they are doing their estate planning to distribute their wealth?
I have came across many clients who believe education is one of the keys to a person’s success. Many also have a heart for philanthropy work and supporting the less fortunate. These are some questions that crop up in the estate planning process:

  • How do clients to take care of themselves and their beneficiaries?
  • Are there any beneficiaries of clients who are disabled, elderly, not financially savvy or immature?
  • Do clients want to distribute assets in a lump sum?
  • What values clients hold and would like to pass down to beneficiaries?

I also recommend that my clients review their financial planning together with their estate planning:

  • Do the clients know their assets and liabilities?
  • Is there sufficient liquidity to pay off debts and still provide for their families?
  • Is there an inventory of clients’ assets?
  • Will clients’ families be able to locate their assets considering that most accounts are virtual nowadays?

We understand you regularly help individuals and families set up Trusts. What is the biggest challenge you face when you talk to them?

Most clients I speak to will initially feel that setting up a trust is only for the rich, and that it is expensive and complex to set up. It’s a myth! They are worried that the trust company might become insolvent. Then what will happen to their trust assets. The setting up of a trust is only one of the solutions in estate planning. There are other options available to solve their concerns.

However, if there are disadvantaged beneficiaries like an autistic child or an elderly person, or a need for asset protection against matrimonial disputes, or supporting the creation of a long-term value, then a trust might do the job. The fees they pay today will be a small amount compared to the potential of losing all the money if it is given to the beneficiaries in a lump sum.

Trust companies are regulated by the Monetary Authority of Singapore (MAS) and there are internal audits to safeguard trust assets. Even in the case of an insolvency of a trust company, the trust assets are a separate entity from the company’s assets.

What are some of the principles you use to help them overcome these challenges?
I am currently a senior ESP and I mentor a team of ESPs. I have established an estate planning process where we will take the clients through a discovery process, identifying their intentions and concerns.

We will share the options available based on their intentions and fee structure for each of these options. We will get clients to prepare their personal asset inventory, check on their insurance and CPF nominations, and set up their Lasting Power of Attorney documentation. Our process does not end when the estate plan is set up. On an annual basis, we initiate a review for our clients as no plan is cast in stone, and it needs to be reviewed for changes in intentions.

How long is the normal process to complete a family wealth succession?
Every client I speak to will tell me that estate planning is very important to get done. But in life, there are just so many things that demand our attention and something so important for the family often takes a back seat.

It is every ESPs duty to do their part to constantly remind clients to get the process started and see it through to attestation. The typical time frame to set up family wealth succession is between three weeks to two months. The collaboration with our clients to get the documents ready is important.

What do you enjoy most about the business?
The deep conversations with families, understanding their concerns and thoughts and why they need to look after their beneficiaries. It is heart-warming to see how people care for their loved ones. Being able to give them a peace of mind once the estate plan is set up brings the greatest joy for me.

Tell us more about what motivates you in this business?
Money for the family, money for charities and religious purposes. In the world we live in today, a lot of things cannot be done without money. My job is to ensure that the wealth created is not lost through any leakages or bad management.

What is a key change you have seen with your client base with regards to estate planning?
The conversations with clients have changed, we are not only talking about investment and insurance but having a deeper conversation to take care of families and support their long-term values. They see me as a go-to person for a holistic approach towards financial planning.

This article was first published in our newsletter, The Custodian Issue 27. Click here to access our latest newsletter


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