As Asia prepares for an unprecedented transfer of wealth, the region’s high net worth individuals are seeking well-crafted wealth management and legacy planning solutions.
With an estimated US$2.5 trillion expected to pass on to the next generation in Asia by 2030 according to Wealth-X, high net worth individuals (HNWIs) increasingly recognize the need to secure their legacies and ensure a smooth transition of their assets. It doesn’t matter if this wealth is newly acquired or built up over generations—planning early is key to keeping your estate safe and growing.
Transferring substantial wealth comes with many significant challenges. HNWIs will need to effectively navigate laws, taxes and administrative procedures that vary widely across different jurisdictions. Without a clear plan, the process can cause conflict between family members or result in assets being lost through taxes and fees. Furthermore, market volatility and unexpected expenses can reduce the value of an estate, demonstrating the need for a robust wealth transfer strategy.
Don’t Let Your Wealth Erode
The ups and downs of the market are hard to predict, and without the right safeguards in place, inherited wealth can be at risk. Rising prices can erode buying power, while economic slumps can have a big impact on the value of your investment portfolios. What’s more, heirs without a proper financial plan may struggle to handle the wealth they receive, which could lead to bad investment choices and potential losses. To keep wealth safe for generations to come, it is critical to tackle these risks with a well-thought-out estate plan.
Another potential challenge in passing down wealth is the lack of financial literacy among heirs. Many inheritors may lack the knowledge or experience to manage their new fortunes, putting their inherited assets at risk. As such, heirs need to equip themselves with the skills they require to preserve and grow what they inherit. To help them in this task, Manulife Singapore offers educational resources to give heirs the knowledge to manage their inheritance well.
“The challenge isn’t simply in accumulating wealth but rather preserving it across generations. By taking a proactive approach to financial education and risk management, families can empower their heirs to make decisions that honor their legacy while adapting to changing economic landscapes,” says Rena Lim, Head of High Net Worth and Financial Advisory at Manulife Singapore.
Take A Well-Rounded Approach
HNWIs must also adopt a comprehensive approach to estate planning to ensure that their wealth is transferred smoothly. This includes making wills, setting up trusts and giving powers of attorney to clearly outline the distribution of assets and designate trusted individuals to manage the estate. A good estate plan makes it easier to transfer wealth, reduces the potential for disputes between heirs, and ensures that funds are distributed according to an individual’s wishes.
“Wealth transfer isn’t just about passing down assets but also ensuring that your life’s work continues to thrive in the hands of the next generation. A thoughtful approach to estate planning can transform potential pitfalls into opportunities for long-term family prosperity,” says Lim.
In the face of market volatility and other risks, HNWIs also require trustworthy methods to protect their assets. Life insurance offerings, such as those from Manulife Singapore, can provide a layer of protection that helps stabilize an estate during wealth transfer. These solutions not only offer liquidity to cover taxes and debts but also aim to facilitate the transfer of wealth with minimal impact on the estate’s overall value.
Furthermore, a well-rounded estate plan should be flexible enough to allow HNWIs to quickly respond to market changes. This enables them to seize opportunities as they arise and defend their estate during downturns. It also provides them with the freedom to adjust their plans as their needs evolve over time, ensuring that the strategy remains aligned with their goals and circumstances.
Targeted Solutions
Manulife Singapore provides a full range of insurance options for HNW clients designed to address their specific requirements. For instance, Manulife’s Heirloom (VII) policy is designed to provide liquidity to help cover estate taxes and other final expenses, thereby facilitating the transfer of wealth.This policy aims to reduce the financial obligations of heirs, such as settling unpaid loans or paying off any legal fees, allowing them to manage the inherited wealth more effectively.
Similarly, the Signature Indexed Universal Life Select (II) policy is designed to strike a balance between growth potential and protection from market downturns. This product links to a range of indexed accounts, offering upside potential while capping exposure to market losses. By incorporating downside protection features, this policy helps preserve wealth even during volatile market conditions, making it a reliable component of a comprehensive estate plan.
“In today’s complex financial environment, the tools we use for wealth preservation must be as dynamic as the markets themselves. Tailored insurance solutions provide the flexibility and security needed to protect family wealth from unforeseen risks, ensuring that it remains intact for future generations,” says Lim.
These products, along with Manulife’s deep knowledge and skill in estate planning, position the company as the go-to partner for HNWIs who want to protect their legacies. By offering solutions that address both the complexities of wealth transfer and the risks of wealth erosion, Manulife empowers clients to navigate the challenges of intergenerational wealth transfer with confidence.
Important Notes
Heirloom (VII) and Signature Indexed Universal Life Select (II), are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy’s surrender value (if any) may be zero or less than the total premiums paid.
This article is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product in the policy contract.
These policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
We recommend that you seek advice from a Manulife Financial Consultant or our Appointed Distributors before making a commitment to purchase a policy.
Information is correct as at October 1, 2024.
This material is intended to provide a general overview of Manulife Singapore’s insurance products. This material is for distribution in Singapore only and shall not be construed as an offer to sell or solicitation to buy or provision of any insurance product outside Singapore.
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