Thursday, September 3, 2009

Citibank's 'Trust and will' Talk

I just attended a Citibank's Trust and Will talk today at Oriental Mandarin today.

Here is a link to my previous blog post on writing Wills and Trusts.

Basically here is parts of the talk that I found useful and interesting.

1. Private Investment Companies (PLC)

To protect your overseas assets from estate taxes ( taxes that have to paid after you passed away, before they can be transferred to your beneficiaries) , you can make of of PLC. Essentially, these are corporation that helps to hold your assets overseas, but the asset still belongs to you.

Hence legally, when you pass away, all the PLC have to do is to transfer your overseas assets to your beneficiaries.

This is because, in the eyes of the law of that particular county, the owner of the asset, which is the PLC, is not dead! However, such PLCs have to be housed in countries that have no estate taxes, for example Singapore.

2. Universal Life
It is similar to long term structured deposit in my point of view.

What it does is :
  • You pay a premium, can be a lump sum or monthly install, or just the interest
  • When you pass away, you beneficiaries get a big sum of $$.
Here is an illustration. For example, at 60 years old you will have an rough gearing of 2.
This means that, say you put $100,000 in this universal account. When you pass away, your beneficiaries get $200,000.

Of course when you put in younger, say 30, your gearing is much higher, might even be in the order of 10. Meaning you put in $100,000 and your beneficiaries get $1 million!

As for the payment method of this 'policy', here are the 3 ways (given a scenario of an 'investment' of $100,00)
  • Lump sum ($100,000)
  • Monthly over say 10 months ($10,000 per mth)
  • Interest (But you have to pay part of the 'investment' . So it could be a down payment of $30,000. As for the remaining $70,000, you can just pay 3% worth of interest per year. However when you pass away, and your beneficiaries get the money, this reamining $70,000 have to be deducted and be paid back to the bank)
Hope this is useful for people who would like to write a will.

The part on PLC will be particularly useful for people with lost of foreign assets!

1 comment:


How do I feel about city bank stock run do not walk away. I do feel better about the tarp warrents issued during the panic of 2008 and 2009 to the federal government they do not expire until 2018 and can be purchased for less than ten cents.