From wealth building to wealth continuity

Legacy planning often has a way of landing in the “important, but not urgent” pile. I’ve met experts who can navigate complex market cycles, yet haven’t set aside an afternoon to decide what happens to their wealth when they’re no longer around to manage it. In this Reserve Letter, we look at why legacy planning deserves your attention, and the practical steps you can take to get it right.

When the law becomes your wealth manager

Most investors wouldn’t leave their asset allocation to chance. Yet that’s effectively what happens when you pass without a will. The law has its own rules for distributing wealth, and they probably don’t match yours. In Singapore, for example, the Intestate Succession Act steps in to distribute your assets according to nine predetermined rules. If you’re survived by a spouse and children, your spouse gets 50%, and your children split the remaining 50%. 

Sounds reasonable, until you consider the practicalities. Take the family home: under these default rules, your spouse and children become co-owners. If your spouse wants to keep the property but your children prefer to sell, you’ve unintentionally created a deadlock.

Now add cross-border complexity, something that would make even seasoned fund managers wince. A London asset, Dubai property, or Hong Kong brokerage account each falls under separate legal systems. Without coordinated planning, your loved ones could be tied up in years of probate proceedings across multiple countries while your assets remain inaccessible.

A 5-minute legacy planning audit

Family deadlocks over property, assets frozen across multiple jurisdictions, prolonged court proceedings – these aren’t rare, they’re just rarely discussed. So how exposed are you?

If you found gaps in more than one area, you’re not alone. The good news is that addressing them is more straightforward than the legalese might suggest.

Structure your legacy like your portfolio

Think of legacy planning as a second layer to your long-term strategy. Your investments are designed to generate and preserve wealth – your estate plan ensures that wealth is transferred efficiently, with as little loss, delay, or conflict as possible. Here are the key tools to consider:

• Wills let you define how your assets are distributed, the equivalent of setting your strategic asset allocation. They also let you appoint guardians for your children and name a trusted executor to implement your plan. For global assets, multiple wills may be needed.
• Trusts introduce a layer of professional oversight, like adding risk management to your portfolio. They’re useful when beneficiaries need guidance or protection, and can provide enhanced privacy, continuity, and tax efficiency across jurisdictions.
• LPAs ensure operational continuity, much like having a delegated fund manager. If you're unable to act, someone you trust can step in to make decisions.
• Liquidity tools like life insurance, nominated accounts, or joint holdings ensure ready access to cash – think of it as your estate’s emergency funds. These can cover immediate obligations without needing to liquidate long-term assets under pressure.

A well-crafted estate plan behaves similarly to a resilient portfolio. It prepares for multiple scenarios and minimises unnecessary costs or delays, all while keeping your long-term objectives in focus.