Choosing a good executor for your will

“It is a certainty but the Asian culture fails to talk about death adequately. Many times, the parents don’t really talk about this to their children. Such as, when a parent passes away, who will be in charge of the family’s business, ” Rockwills Advisory Services Sdn Bhd’s general manager and associate estate planning practitioner ason Tham told StarBiz.

 

DEATH is an issue nobody likes to talk about, but it is a certainty in this life.

This is likely due to the Asian culture where death is a rarely or openly discussed subject among families which could lead to complications later on for the loved ones.

“It is a certainty but the Asian culture fails to talk about death adequately. Many times, the parents don’t really talk about this to their children. Such as, when a parent passes away, who will be in charge of the family’s business, ” Rockwills Advisory Services Sdn Bhd’s general manager and associate estate planning practitioner Jason Tham told StarBiz.

“Many times, the children are also helping out in the family business and as the founder and business owner it is difficult for the parents to say that they are their children’s boss and parent at the same time. While in some other instances, siblings may be unhappy if parents outrightly choose one over the other to take over the family business.

"A lot of people have an inkling that this is an important topic to talk about but they don’t know where to start, ” Tham added.

He noted that recent business trends for Rockwills have indicated that awareness among Malaysians on the importance of writing a will have been on the rise as business volume in this area have grown.

Writing one’s will in advance will also help ease the transition for a person’s loved ones in terms of matters pertaining to inheritance.

Other than the importance of being more open in discussing death, Tham said it is important for a person to choose a good executor for the will.

“The executor will be acting on a person’s (demised) will. So appointing a capable executor is a very important task and a common mistake made by many is to overlook this part of choosing a capable executor. Some of the characteristics to look out for in a capable executor is that the person must be reliable and trustworthy, ” Tham said.

“Some good examples of a good executor can be a person’s spouse. Since this is a person whom you can trust and this person would know and can execute your wishes in regards to inheritance.

“We must also know that this person chosen will continue to be in existence, ” he added.

Tham explained that continuing to be in existence generally means that as a general guideline, one should try not to appoint their parents as their will executors.

“Most likely a person’s parents would be much older and the chances of them continuing to be in existence would be lower.

“If there are no untoward or unexpected incidences, most likely your parents will pass away before you. An executor will execute a person’s will when a person is gone, ” he said.

Tham said usually, a family member will be selected as executors and they are usually candidates that would naturally be a priority.

“In some cases, a person might require a neutral body to execute a person’s will and this is when a professional estate planning firm may come in handy, ” he said.

“One example when this may be applicable is when a father would like to give his inheritance to his children but they are not on good terms with each other.

“So it is very difficult for the client to appoint one of them to be executors since they would likely be biased and it can create more fights among them. So this is when a licensed trustee is useful to carry out the demised’s will wishes, ” Tham said.

A licensed trustee can also help carry out a person’s wishes in the event that both parents are not around with minors or offsprings who are not yet considered adults, he said.

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China on path to become world's No. 2 wealthiest country

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BEIJING, Oct. 20 (Xinhuanet) -- China is expected to replace Japan as the world's second-wealthiest country after the United States with total fortune shooting to nearly US$40 trillion by 2016, Credit Suisse AG said in a report yesterday.

However, the accumulation of fortune will be achieved along with an expanding wealth gap in China where the Gini coefficient, a commonly used measure of inequality of wealth, has already passed an extremely dangerous level.

China, which has surpassed Japan as the world's second-biggest economy, will soon also catch up with the neighbor in terms of total wealth.

Overall wealth at the hands of Chinese mainland people is projected to reach US$39 trillion in the next five years, the firm said in its annual Global Wealth Report.

China now has a total wealth of US$20 trillion, third in the world behind only the US and Japan but ahead of France, according to the report, which analyzes the wealth distribution in more than 200 countries.

Total fortune in China increased by US$4 trillion from January 2010 to June this year and is the second-highest contributor of global wealth growth after the US, the report said.

Wealth per adult in China has more than tripled from US$6,000 in 2000 to US$21,000 this year, according to the report.

The report downplayed overall wealth inequality in China, saying it remains moderate with 37 percent of the adult population lying in the middle segment of the wealth pyramid with a fortune of US$10,000 to US$100,000 per adult, while 5.8 percent of the adult population falls below US$1,000 and 2.3 percent above US$100,000 each.

China had a population of nearly 1.34 billion by late last year, according to the country's latest census, with about 70 percent of the population aged between 15 and 59.



With the increasing wealth of successful entrepreneurs, professionals and investors, inequality has been rising strongly, the report cautioned. So far this year, China has gained more than a million millionaires for the first time and now has more than 5,000 ultra-high net worth individuals with average fortunes above US$50 million, behind only the US, the report said.

The Gini coefficient in China reached 0.5 last year after hitting the recognized warning level of 0.4 more than 10 years ago, according to a report by Xinhua news agency in May last year. Developed European nations and Canada tend to have Gini indices between 0.24 and 0.36.

A low Gini coefficient indicates a more equal distribution, with 0 corresponding to complete equality, while higher Gini coefficients indicate more unequal distribution, with 1 corresponding to complete inequality.

China is nowhere to be found in the list of top 10 countries with the highest average wealth per adult. Using that scale, Switzerland, Australia and Norway are the three richest nations in the world, with Switzerland recording average wealth per adult at US$540,010 - the only country to exceed half a million dollars.

China currently possesses total wealth of US$20 trillion, ranked third in the world behind the US and Japan and ahead of France.

The reported also mentioned that the Asia-Pacific region has emerged as the key contributor to the growth of global wealth, accounting for 36% of global wealth generation since 2000 and 54% since 2010.

Total household wealth in the region increased 23% from January 2010 to June 2011, contrasting with the 9.2% and 4.8% growth in North America and Europe over the same period respectively.