๐๐ผ๐ ๐๐ผ๐ป๐ด๐ฒ๐ฟ ๐๐ถ๐๐ฒ๐ ๐๐ฟ๐ฎ๐บ๐ฎ๐๐ถ๐ฐ๐ฎ๐น๐น๐ ๐๐ต๐ฎ๐ป๐ด๐ฒ ๐๐ผ๐ ๐ช๐ฒ ๐ฃ๐ฎ๐๐ ๐ช๐ฒ๐ฎ๐น๐๐ต ๐ข๐ป
Longevityโs Impact on Wills, Probate, Family Firm Succession & Lawyering
Singapore is a โblue zoneโ, a region where people live exceptionally long lives.
In 1960, our average life expectancy was 64.5. Today, itโs 83.5 and rising.
Longevity will have a huge impact on much of life, including how we organise and pass on wealth, and consequently, on my work as a trust and estate lawyer.
๐๐ผ๐ป๐ด๐ฒ๐๐ถ๐๐ & ๐๐ป๐ต๐ฒ๐ฟ๐ถ๐๐ฎ๐ป๐ฐ๐ฒ
I recently read John Morleyโs โTrusts and the 100-Year Lifeโ.
Its core insight is that as lifespans grow, โdeath-timeโ (cf. lifetime) family wealth transfers will become less relevant.
Morley thinks (and I agree) that will-making and probate โ the proving of the validity of a will and distributing of an estate โ will fade in importance, as longer living people:
โข will use up their wealth during retirement
โข should effect lifetime wealth transfers to their children
Today, family wealth transfer in Singapore mainly occurs only when both parents pass on.
But as life spans grow, working years will take up a smaller share of life; savings must fund longer retirements, leaving less to pass on.
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Death-time transfers also make no sense if we live into our 90s or more, as our children will already be in their 60s or 70s by the time inheritances are received.
Think King Charles, who only inherited the English throne at 73 due to his motherโs longevity.
Money is most useful earlier in life, when incomes are low, expenses and debts are high and human potential can still be enhanced.
For instance, financial help with housing, career switches, upskilling or career breaks to raise children can have a huge impact on life and family outcomes, while the same funds given later add less to oneโs quality of life.
Longer life spans also adversely affect some types of wealth, like family businesses.
When lives were shorter, family business succession often coincided with the founderโs death: the successor-child took over the day after the founder was laid to rest.
With long lifespans and retirements, this wonโt work.
Itโs unrealistic to expect founders to manage effectively into their 80s or 90s, or for their children to wait till their own 50s or 60s to take the reins. It also leaves them too little time or energy to steady the ship.
Control must pass well before founders die or lose mental agility or capacity.
๐ฆ๐ผ๐บ๐ฒ ๐ง๐ต๐ผ๐๐ด๐ต๐๐
Morley prompted me to reflect on my legal practice, and how it is to evolve with demographic reality and societal need.
It also got me wondering why lawyers here seldom discuss CPF matters with their clients, when those in the US and Australia routinely advise theirs on 401(k)s and superannuation (CPF equivalents), tax reasons aside.
With longer lifespans, retirement funding, including via CPF funds, will become increasingly important.
I have much food for thought, then.
