Leaving the assets to the family

Hi Mr Tan,

I hope that you are enjoying your visit to America. I like your tips on investment and insurance, especially for a young person. What are your ideas about leaving the assets to the family, for a person who has enough for his or her own needs?

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REPLY:

For a person who is very well off, I suggest the following approach:

1. Set aside sufficient funds to take care of your own future needs, e.g. cost of living and medical care. Buy a life annuity to provide a monthly income.

2. Set aside an additional lump sum to be used for emergencies. Invest in a fund to earn an good rate of return. Make sure that it can be withdrawn without penalty.

3. Transfer some of the assets to your children and grandchildren now. It will be more useful to them now, rather than many years later. If you do not wish to make a lump sum transfer, you can buy a fixed term annuity to transfer this sum over 5, 10 or 15 years.

4. Be generous. Donate to the community and to charity.