Catherine Yuan is the Executive Director and Trust Officer of Tricor Trustco (Labuan) Ltd, a fully-fledged licensed trust company regulated by the Labuan Financial Services Authority (LFSA) based in Malaysia. She has over 15 years of corporate management experience, which includes strategic and leadership training for management development, as well as wealth succession planning. She has a deep understanding of Eastern and Western cultural differences, essential to creating a mixture of strategies catered to multinational corporations and global families’ needs. She is also a STEP (Society of Trust and Estate Practitioners) member. We sat down with Catherine to discuss wealth and estate planning, and the uses of a Labuan Private Foundation for such purposes.

What are the current trends reshaping the estate planning sector?

Based on my experience, the wealth management industry in the Asia Pacific has been continuing to grow rapidly, and I believe that as the population of high-net-worth individuals (HNWIs) increases, so will their assets.  For example, HSBC estimated that Chinese households will have RMB 300tn (USD 46.3tn) of investable assets by 2025, an amount equivalent to the entire US bond market. Over the years, we have seen the emergence of a new affluent group with a more diversified lifestyle. However, the transfer of wealth is still a challenge for many of them. I recommend HNWIs to seek sound advice on navigating international borders, devising the right wealth structures and continually refining them. This will ensure a solid legacy and that their wealth smoothly reaches their intended beneficiaries in an internationally compliant manner.

I personally believe that the lack of comprehensive financial and structural knowledge regarding wealth solutions and succession planning hinders them from finding the right arrangements to fit their families’ needs. Asian HNWIs are typically more familiar with the use of wills and trusts since these instruments have been around for centuries. Many reports suggest an increasing number of Asia families hold various kinds of assets, and these assets are moved across various countries. For example, according to CNBC, inquiries about setting up a family office in Singapore from China have doubled over the last 12 months. It is crucial for these families to devise a wealth structure that is flexible, secure, and compliant enough to safeguard their assets. I can help them achieve these goals by offering them the only Private Foundation structure available in all of Asia.

Today’s ageing generation is closing in on retirement and it will only be a matter of time before the younger generation takes over. I have had talks with clients, who are business owners, and they all share a similar concern: the successor of their businesses or companies. Not every child seeks to succeed through their parents. Often times they wish to forge their own path to success, their own place in the world. They may also lack the business tack or acumen to take over a leadership role in their parents’ businesses. This is where, historically, we usually see the downfall of corporations after losing their original founding members. I would advise these clients to start thinking about their succession plans ahead of time, to decide who is deserving to inherit their shareholdings in corporations, and most importantly, their responsibilities as well. I assist my clients in exploring various estate planning structures to achieve their family business succession goals.

Today, we can see that the younger, smarter generation is reshaping the wealth management industry. Digital assets are gradually finding their way into estate and inheritance planning as we see a greater investment interest in them. I have had clients that have cryptocurrencies, digital wallets, and social media accounts, all of which are relatively new forms of assets.

As the adoption of digitalisation continues to rise rapidly, we need better protection and planning of digital assets. I would advise my clients to make a thorough inventory of all online accounts and passwords so that their beneficiaries have access to them after their passing. Digital assets in estate planning can be complicated. The laws that govern digital assets vary from country to country, platform to platform, and governments around the world struggle to keep up with the ever-changing technological landscape.

I have come to notice that the HNWI’s families in Asia have an increasing need for family wealth planning to preserve and pass on their assets to future generations, including increasingly prevalent digital assets. I strongly believe that Asia’s wealth management community must adapt to digitalisation trends so that the products and services offered can cater to today’s wealth planning needs.

Why do clients need to consider using your help with estate planning?

I have over 10 years of experience in the wealth planning industry. Our team specialises in the handling of Labuan company registrations, financial license applications, and private foundation set-ups in Labuan. We provide a comprehensive suite of services for corporate estate planning – including corporate secretarial services, corporate governance, and management advisory – to global families, multinational companies, entrepreneurs, and investors from all parts of the world who seek to preserve their wealth through the Labuan Private Foundation.

Tricor Trustco (Labuan) Ltd has actively promoted the Labuan Private Foundation since the inception of the Labuan Foundations Act 2010. We are part of the Tricor Group and are backed by a strong global network with offices in 22 countries or territories scattered all throughout Asia and other parts of the world to provide bespoke services to all our clients. Tricor Group is the largest company secretarial firm in Malaysia. We serve major publicly listed companies in Hong Kong SAR, Singapore, and Malaysia, offering services such as share registrar and company secretary. Our major clients also include 40% of all existing Fortune Global 500 companies, and we serve them as their all-in-one corporate services provider.

I trust that with our many experts and professionals, covering many different corporate industries and from countries all over, Tricor has the resources, expertise, and manpower to meet any challenges our clients may face.

Over the years, we have seen the emergence of a new affluent group with a more diversified lifestyle. However, the transfer of wealth is still a challenge for many of them.

How can a Labuan Private Foundation help with estate planning?

My experience in estate planning has taught me that there is no “one-size-fits-all” approach. An estate plan must be tailored to meet specific goals, adapt to family dynamics, and improvised to suit evolving family trees.

Popular estate planning tools such as wills, trusts, and foundations all have their similarities and their differences. It is my job to help clients identify their objectives, choose the right tools, and construct the proper structures to effectively fulfil their goals. The fundamental objective of succession planning is for you to ensure that your wealth is passed on to your loved ones so that they are equipped to face hardships in your absence.

The sole jurisdiction in Asia that offers private foundation wealth protection is in Labuan, Malaysia. The Labuan Private Foundation is the only one of its kind in Asia. The Labuan jurisdiction is a white-listed jurisdiction by Organization for Economic Cooperation and Development (OECD), supported by a strong and transparent regulatory framework covering all business solutions and wealth management needs.

The Labuan Private Foundation is a legal entity fully protected by the Labuan Foundations Act 2010. The Private Foundation has its own separate legal identity, which is similar to that of a company, which helps to limit the risks and exposure of a Foundation to the Founder. With its own legal identity, the Foundation can own a multi-currency bank account and even have a trading account to hold shares of public companies listed on stock exchanges and so on. It essentially acts as an ultimate holding structure.

It is also governed by a set of customised Charter and Articles, which allows each and every Foundation to be unique and flexible enough to suit each Founder’s purposes. The lifetime of a Foundation can also last in perpetuity, in either the Conventional or the Islamic form, which allows for families to further plan for their long-term objectives.

Personally, I have seen families struggle internally when the patriarch or matriarch of a family passes, leaving behind unclear directions or vague interpretations of their wealth distribution instructions. This causes significant distress, confusion, and discord amongst the surviving members of the family. I have helped clients overcome these issues by devising a profound Labuan Private Foundation structure that details the blueprint of how wealth should be managed upon the passing of a loved one. With the Labuan Private Foundation, I am able to give my clients the priceless gift of a peace of mind.

While these may seem complicated and confusing at first, I can advise on vehicles that suit my clients’ best interests and help drive their estate planning forward.

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