The clients own restaurants in Singapore and Kuala Lumpur.
They have a daughter who was helping with the running of the family business. Their son, on the other hand, was a passionate golfer and decided to make a professional career of it.
The restaurants are held under a PIC and the total value is approximately S$15m. In addition, we review their investment portfolio worth more than S$5m spread between different currencies and asset classes.
Mr and Mrs Shah, the parents, want to make sure their wealth is passed equally to their children when they pass away but are concerned about how they can do this fairly when the daughter is the only one active in the business.
A life assurance policy provides a guaranteed high level of life cover in exchange for sacrificing some of the returns on the invested capital. And there is no need for probate as beneficiaries can be nominated under the Singapore Nomination of Beneficiaries framework. There are no estate taxes in Singapore either.
Mr and Mrs Shah create for a high value policy by transferring some of their private company shares as a bespoke asset which becomes the underlying asset of the policy in determining its value, in this case S$5m.
Once Mr and Mrs Shah pass away, the policy will pay a total of $15m to the children as follows:
Their daughter will receive the company shares worth S$5m, this along with the remainder of the business brings her inheritance to S$15m
Their son will receive the remaining $10m from the policy plus Mr and Mrs Shah’s investments worth $5m. This brings his inheritance to $15 million, the same as his sister
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