However, everything around us goes on, and one of the key aspects to take care of after someone’s death lies in the management of the estate – and something called probate.
Probate
In the unfortunate event of a death in the family, there comes the often-difficult task of handling the deceased’s estate. This will invariably fall to the deceased’s next-of-kin, in the form of a close relative or spouse. However, before the estate – and the money, assets and possessions included within it – can be managed by another person, they will need to apply for probate.
Probate, in essence, describes the legal right to administer an estate on behalf of the deceased. It is an application that a surviving family member or trusted associate must fill out, in order to legally gain access to bank accounts, title deeds and any investments made. This remains the case for those named executors in a will – though if there is no will, the closest living relative is eligible to apply.
What Is A Probate Loan?
Probate can be a slow-moving process, and even after the successful granting of probate the management of the estate and execution of the will can take some time to complete. In the interim, a number of considerable, personal or emergency costs can abound for the executor and for any potential beneficiaries of the deceased’s estate.
Since the legal distribution of inheritance money can take some time to clear, there are options available to free up that money earlier – chief of which is the probate loan. Beneficiaries of an estate can apply for a probate loan to receive their inheritance more quickly, in the form of an advance to be repaid directly by the estate.
Key Applications Of A Probate Loan
There are numerous reasons for which an executor or beneficiary may want to release their inheritance money before probate is granted and execution underway, with probate loans offering the means to quickly solve key expenditures or issues.
A common use for inheritance money is the paying-off of a mortgage or the purchasing of property; indeed, inheritance funds form the basis for many first-time buyers’ deposit pools. With the property market cooling after a period of rampant growth and budding concern for future market uncertainty, it is understandable that beneficiaries may want to expedite access to funds for property purposes.
Another key application for probate loans is the elimination of debt. It may be that existing debts are racking up considerable costs in terms of interest; with the knowledge that ample inheritance money is on the way, a probate loan can consolidate that debt and eliminate any repayment burdens altogether.
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What’s your story?
My journey to Squiggle and estate planning started initially in the banking industry. Back then, I was an adviser to a wide range of small businesses. When I listened to the stories and challenges of these businessmen and women, a pattern started to emerge. I couldn’t help but notice that many of their challenges and struggles were often at odds with the banking industry’s relentless focus on profit margins, metrics, and data.
So, when I was headhunted for a senior client-facing role in the legal industry, I didn’t hesitate to make a move, as I believed I could make more of an impact as I believed at the time that this was a more ‘caring’ industry.
However, several months into my new role, it started to slowly dawn on me just how archaic and traditional this sector was as well. I saw so many things that badly needed to be shaken up. Charging the client by the hour led to a transactional culture. There was a poor understanding of how technology could really help the customer and increase customer service levels. The ‘paperless’ office seemed to be a far-fetched idea in many cases, all leading to a culture of silo-thinking, poor security protocols, little or no transparency and poor knowledge sharing. This all translated into an extremely unwieldy and expensive service for the customer with bottlenecks everywhere.
All these challenges represented an opportunity for me and that was when I decided to found Squiggle – to leverage the best of technology, people, and good old-fashioned customer services to provide the customer with an entirely new experience.
What are currently the hottest topics being discussed in relation to Wills, Trusts & Estate Planning?
There are a number of topics that are quite ‘hot’ at the moment. A key concern of mine has always been the ability of a client to access their information at any time of the day, seven days a week. Of course, this has a lot to do with the introduction of the latest technology. But not everybody likes technology for a number of reasons. First, the introduction of any technology can be seen as a threat by many solicitors. Less interaction time with the client means less billable hours. Secondly, solicitors have often felt threatened by the technology themselves. Many solicitors simply outsource their technology to an IT firm without understanding the strategic role that technology can play. Lack of this vital layer usually results in unwieldy ‘legacy’ technology that is costly and complicated.
On the client-side, many of our older clients have generally been technophobes (although that is now changing gradually), and when they’re faced with having to use legacy technology that I spoke of just now, it’s not surprising that many clients prefer the more expensive solicitor interaction (to the solicitor’s glee).
It's my firm belief that technology doesn’t have to be complicated. Mobile devices and better connectivity have enhanced the customer experience massively, driven down costs, improved security protocols, and made it so much easier for family members to collaborate with each other. All these things are vital, especially when it comes down to something as sensitive as estate planning and inheritance matters where you want to keep confusion and miscommunication to an absolute minimum. Technology is absolutely vital.
Something else I hinted at earlier was the issue of bottlenecks. Estate planning can be complex with many moving parts, so it is vital that bottlenecks are kept to a minimum and we can take care of our clients’ documentation as seamlessly as possible.
But it’s not always easy. Let’s take a government department such as the Office of the Public Guardian or the Land Registry which are dealing with thousands of documents on a daily basis. It’s therefore not surprising that these departments can cause huge delays in our comprehensive estate planning process. In some ways, that goes back to the technology point I made earlier. You can’t have excellent customer service without the ability to communicate quickly and clearly. And when there’s a delay from a government department, it is absolutely vital that we communicate that promptly with our customers without them feeling that they’re being charged by their solicitor for writing a letter.
Regulation is also something that has been spoken about a lot. One of my frustrations in the past was witnessing how many ‘middlemen’ and ‘fly-by-nights’ there are in this industry with no self-regulation. And this gives our industry a very bad name. I decided not only to build a team and the technology to eradicate this but also to ‘self-police’ by keeping ourselves to the highest standards possible.
That’s why Squiggle are members of the Society of Trusts & Estate Practitioners, the Institute of Paralegals, and the Society of Will Writers. We’re also a member of the relatively new ‘BEST Foundation’, a governing body for Estate Planners, they have recently sent an open letter to the Office of the Public Guardian with the industries concerns around the Office of the Public Guardian – I fully support this.
In this regard, Squiggle aims to be at the forefront of education in estate planning and we have published our own Code of Conduct and Quality Guarantee on our website.
What are the main mistakes people make when it comes to wills and trusts?
Having dealt with thousands of clients now, the one thing that comes to mind is just how much people underestimate the intricacies of estate planning. It’s all very well saying ‘we’ll implement simple technology’ and outstanding customer service, but everybody’s story is different. Every family has its own unique background and circumstances and it’s important we get to the bottom of each person’s circumstances as quickly as possible without charging an arm and a leg.
So when somebody says to us: “our situation is really quite simple. Just leave everything to my spouse and then down to our children”, I’m tempted to respond with: “hold on, not so fast!” Life is full of unexpected twists and turns. A beneficiary might unexpectedly get divorced and/or remarried? Or they may go bankrupt. What happens then? We ALWAYS present different scenarios to each client, based on what they tell us as it’s important for them to know the potential consequences of each scenario. At the end of the day, that’s the difference between having a will written for you and getting proper advice from a qualified Squiggle Estate Planning consultant.
Squiggle is the company that’s decided to do things differently. We don’t charge by the hour, like most legal practitioners. We’re completely open and transparent. And we seek to educate. We’ve set the bar high for ourselves.
What are your thoughts on DIY wills & online wills?
Cheap DIY wills should not exist in my opinion. You’re talking about potentially leaving your estate to your loved ones and you want to rely on a cheap online will? Really? Why? I just don’t get it.
Of course, online will services do have their rightful place. We even offer it ourselves at www.squiggle.me. But it’s important to maintain that crucial balance, ensuring that there’s somebody who can handhold you through the process cost-effectively with other services such as a Lasting Power of Attorney and additional support and advice when needed.
Remember, you don’t know what you don’t know. I often compare our industry to owning a car. You know a car needs four wheels and an engine, but do you know why you need the pistons and what causes them to go up and down and so forth? Most people don’t need to, but at least they should understand the inner workings of estate planning. That is why you need a mechanic, or, in our case an Estate Planner.
Why should more people consider working with you?
Because we’ve turned the cart completely upside down. Squiggle is the company that’s decided to do things differently. We don’t charge by the hour, like most legal practitioners. We’re completely open and transparent. And we seek to educate. We’ve set the bar high for ourselves.
We ruthlessly audit all documents to make sure they are legally binding. We’ve come across so many wills from competitors where the company hasn’t even bothered pursuing the signing of a will. In our case, it’s so important for us that have a dedicated meeting to ensure this happens. And it’s written into our process.
Another point is security. So many legal practitioners tell their clients they must keep their documents securely, but then they seek to charge their clients for secure storage. That’s unfair and unethical in my view. We guarantee free lifetime secure storage - period.
We also help our clients register all their documents as part of the service. What’s the point of investing in these costly documents if they’re never registered? Again, it’s all part of our service and part of the relationships we are building. We just don’t believe in flooding the market with poorly drafted wills that are never finalised.
What do you do to help the local community as a business owner?
Our communities are what help us keep doing what we love. And to be honest, Squiggle wouldn’t be here without the support of our communities.
That is why there are two parts to our Strategic Partner Programme. Firstly, we have our charities. We know that it is so difficult for small local charities to raise the critical money they need to support their important causes. That is why we provide ‘free wills’ to our partner charities’ donors to help them give to charity in their will. “Legacy Giving” can be such a big income earner for charities and it allows them to make such a huge difference.
Secondly, we partner with local businesses. Employee retention and satisfaction are so important to most businesses, so providing a ‘free wills’ service to our partner companies is a unique way for them to differentiate themselves from their employees.
What have been some of your main achievements since starting Squiggle?
When I founded Squiggle five years ago, it was just me. I am now incredibly honoured to say I have a team that helps me look after a base of over 4,000 clients. It feels great to have had such an impact on thousands of lives and securing tens of millions in inheritance for generations to come. Also, being invited to be a Fellow of the Institute of Paralegals was a very humbling moment.
In addition, many solicitors, financial advisers and other industry professionals have decided not to open their own private client departments. Instead, have partnered with Squiggle, safe in the knowledge that we have the right technology, processes, standards and protocols in place. And I’m proud to say that we have a really great team.
What has the COVID-19 pandemic taught you?
The difficult days of COVID have shone a light on both our humanity and our mortality. We not only cheered loudly for the heroes who have helped keep us safe in the dark days of this global pandemic but we have all been forced to assess what is really important: our lives, our loved ones and our peace of mind.
That’s why we have developed systems, processes and a team around these very values – to help people take care of this very important aspect of their lives – before it’s too late.
After working with us, our clients tell us they feel like a weight has been lifted and that they can sleep peacefully at night thanks to Squiggle – and we love knowing we have helped take care of such an important part of their life.
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.
Pensions are a crucial part of life but a dreaded concept for many millennials. However, saving for a pension may not be as complicated or as demanding as you think. Here, Paul Farrugia, Partner and Chartered Financial Planner at Equilibrium Asset Management, explains how easy it can be to start saving into a pension today.
Investors now have little alternative but to support risk assets if they want to beat inflation, affirms one of the world’s largest independent financial advisory organisations.
The assertion from Tom Elliott, International Investment Strategist at deVere Group, comes as global stock markets enter 2018 with positive momentum, including the Dow Jones which has surpassed 25,000 for the first time in history.
Mr Elliott explains: “Market confidence is supported by a reasonably strong cyclical upswing in world GDP growth. This is being translated into corporate earnings growth, by a belief that central banks will not significantly tighten monetary policy unless justified by growth and inflation data, and by the U.S. corporate tax cuts announced in December which will boost Wall Street corporate earnings.
“In the face of continuing low interest rates and bond yields, investors now have little alternative but to support risk assets such as equities and non-core government bonds, if they want a yield that will beat inflation.”
An acronym is currently being popularised that describes how many investors see markets unfolding in 2018: MOTS, standing for ‘more of the same’. That is to say, solid returns for stock markets with continuing low volatility, and positive returns from investment grade corporate bonds.
“The risks to the MOTS scenario include central bank policy error, Trump turning America away from its traditional support for free trade, a credit crunch in the Chinese financial system and from geopolitics such as North Korea and the Middle East. However, as supporters of MOTS would argue, none of these risks are particularly new and they failed to de-rail markets in 2017,” confirms the strategist.
He continues: “We favour a long-term multi-asset approach to investing, whereby investors choose a suitable combination of global equities and bonds - depending on their risk profile and investment horizon - and leave the portfolio unchanged. Regular re-balancing ensures winners are sold and losers are bought – which financial history, and common sense, supports but which is so hard for us to do in practice.”
Mr Elliott goes on to say: “Looking forward to 2018, Japanese and emerging market stock markets appear to some commentators to offer most value, the U.S. less so. The Japanese economy, which grew at an annualised rate of 1.4% in the third quarter 2017 (despite a shrinking population), continues to benefit from a weak yen and the upturn in global demand for its exports. Fiscal reform, in particular lower corporate tax rates for companies that increase wages by 3% or more, comes into effect in April. It is hoped that this will lead to improvements in household demand growth, which has been weak in recent years. Emerging market equities continue to look undervalued relative to their developed market peers on most valuation measures, despite their outperformance in 2017.
“Wall Street is the most overvalued of the major stock markets, with the attractiveness of equities against bonds diminishing as Treasury yields creep up. However, the increase in yields is likely to be modest and U.S. corporate earnings growth will remain strong, limiting any pull-back in share prices. The weak dollar boosts export earnings, while strong consumer confidence supports domestic-focused sectors. Tax cuts will be a net benefit to U.S. corporate earnings, but the impact of changes to the tax code on individual sectors is as yet unpredictable. Fourth quarter earnings statements and outlook comments, from mid-January, will hopefully offer clues.”
Mr Elliott is not so confident about fixed income. He concludes: “Once again we begin the year with commentators generally nervous of bonds, fearing that an inflation problem is around the corner. Some fear that central banks will tighten monetary policy faster than is priced into the market in an accelerated effort to ‘normalise’ policy.
“It seems prudent to heed such warnings, even while acknowledging that the fear of imminent inflation has been voiced by monetarist hawks – and proved wrong- ever since central bank’s policies of quantitative easing and ultra-low interest rates began nearly 10 years ago. This suggests favouring short duration core government bonds, since the cash can be re-invested in a few years in higher bond yields.”
(Source: deVere Group)
