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ProviTrust Congratulatory Ceremony

ProviTrust Congratulatory Ceremony by EPPL Digital

ProviTrust is a revocable trust designed to receive one’s CPF savings upon the person’s demise to distribute to the named beneficiaries according to the manner indicated in the trust deed. Being the first of its kind, ProviTrust has garnered interest among our Estate and Success Practitioners (ESPs) and clients alike.

Helmed under EPPL Digital owned by Estate Planning Practitioners Limited (EPPL), we celebrated the success of our ESPs Joy Koh and Joyance Quek on 07 October 2021 for closing their first ProviTrust. The two cases were the harvest of their hard work, and among the pioneer cases of ProviTrust with the appointment of Precepts Trustee Ltd as the Corporate Trustee.

The virtual ceremony was graced by PreceptsGroup CEO, Mr Lee Chiwi and Head of Precepts Trustee Ltd, Mr Leong Mun Kid. Both Joy and Joyance shared their success stories in offering ProviTrust as a solution to fill in the gap of estate planning for their clients.

Question: What motivated your client to set up the ProviTrust?

Joyance: While helping my client to draft her Will, I explained to her that she cannot Will away her CPF monies and the only way to specify her CPF distribution is through a CPF nomination. She shared her concerns with this arrangement due to the lump sum pay-out to her beneficiary who is currently a minor. She highlighted her preference to distribute the payout periodically to this minor beneficiary, after her demise. I could resonate with her as she had worked very hard since young to accumulate this amount of CPF savings and she really wanted to benefit her family in the right manner to avoid misuse of the funds.

Joy: It started with a talk that I conducted. In my sharing, there was one segment where I shared about the two pain points for someone who is divorced or having a dysfunctional marriage. First, I led them to think by asking: ”If you are divorced, it is very natural for the nomination to be made 100% to your children. However, what if common disaster happens and both your children and you were to perish together? According to the intestacy law, you being the older one is deemed to have died first. Would you want your ex-spouse as the surviving parent to receive your entire CPF monies?” There was a resounding NO from the audience. Next, I asked them “Would you want to depend on your ex- spouse to fund your children and decide on their education funding, or bother your children for monies knowing that your children will receive your CPF monies at age 18?” The answer again is a unanimous NO. Given these 2 pain points, one of the attendees who is divorced decided to arrange a meeting with me.

Question: How did you introduce ProviTrust to this client?

Joyance: I have been in contact with this client regarding her estate plan. When we met to discuss her Will, I shared with her the concept of delayed distribution, so she understood the importance of setting a Trust to safeguard her assets. Back then, the only way to achieve this distribution objective for our CPF monies is via a Standby Trust. However, cost was a concern for her because it’s a big jump in fees from a Will with Testamentary Trust to a Standby Trust set up fee. Afterall, one of her substantial assets is CPF savings, and as a practitioner, I understand that a Standby Trust might not meet her needs and consideration for cost efficiency. When ProviTrust was introduced in July, and I brought this solution to her, we both reckoned that this innovative solution bridged the gap and fulfilled the distribution objective that she needed for her CPF savings, to benefit her beneficiaries.

Joy: After the talk, the attendee and I set up a meeting. From the meeting, he echoed that the pain points are indeed his greatest concerns. He is especially worried that his ex-spouse will bother his children for monies, knowing that after his demise, they will inherit this pool of money when they turned 18. He wanted to ensure that his ex-spouse would not benefit from his CPF savings and to protect the monies for his children. If his children do not survive him, the monies should go to his parents instead. I presented to him the solution with ProviTrust, to address his concerns. The CPF savings will be protected with a Trust, and the appointed trustee will distribute according to his wishes to provide for his children. I advised him to set up a discretionary trust and name his parents as substitute beneficiaries. The decision was made to appoint Precepts Trustee Ltd as the trustee, for the assurance that a corporate trustee is perpetual, and he seeks for ultimate protection on his CPF savings.

Question: How has the experience been for you and your client on this digital platform?

Joyance: The portal is very straightforward and simple. The digital platform allows you to do everything virtually without having to meet the client, especially under the current Covid-19 restrictions. My client was pleased with the efficiency of the process. One tip to share is, before submission at the portal, ESPs can pre- empt clients on the information needed for individual trustee and beneficiaries, and the options for distribution manner at the portal.

Joy: I have a standard operating procedure for the process. First, I shared with my client screenshots on the steps to set up ProviTrust. Then we arranged a date and time to go through the steps over Zoom. We had some hiccups at that meeting, when we realized that he didn’t have his email address updated at his Singpass portal. This was easily resolved when he updated it. Hence, this is something to take note of. Over the zoom, he shared his screen and I guided him with the steps to complete the submission, while addressing his queries. It was an easy experience and very efficient too.

From the EPPL Digital Management Team: We are heartened by their efforts to take the first step into this new digital trust solution. We would like to extend our appreciation to both Joyance and Joy, in taking time to share with us their valuable experiences with setting up ProviTrust for their clients. As practitioners and trusted advisors, it is invaluable to be able to present a solution for your clients and address their concerns. With ProviTrust, we can now fill the gap for a complete estate plan.

 

This article was first published in our newsletter, The Custodian Issue 20 on Jan, 2022. Click here to access our latest newsletter.

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