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Anita is a divorcee and single mother of two young daughters. It has been very hard for her. “I have no one but myself and my daughters. I have to work 7 days a week as a lecturer in various colleges to provide for my daughters. I am constantly worried about their well being should an accident happen to me or I suffer from serious illness”, Anita told me when I first met up with her in a café in KL city.
Malaysians has seen more divorces throughout the years. In 2002, for every 9.6 marriages registered, there was one (1) divorce. In 2009, for every 6.1 marriages, there was one (1) divorce. While marriages increased by 21% (153,318 to 199,586) from 2002 to 2009, divorces increased by as much as 105% (16,013 to 32,763) during the same period. The National Population and Family Development Board Malaysia counsels 700 to 800 troubled couples a year. The National Registration Department registered 2,706 divorces among non-Muslims in 2002, which subsequently climbed to 5,647 in 2009. Between 2006 and 2009, the divorce rates mostly stagnated at about 5,000 a year. However, seven months into 2010, there were already 7,428 divorce cases registered, way higher than years before.
Single Parent could also be due to unfortunate passing on of a spouse, or single because you decide to adopt a child or you could be the guardian of a young child. Under such circumstances, for effective planning and the well being of the child, it will be suitable to consider setting up a Single Parent Trust.
Usually assets that generate income, such as properties that have rental income, listed company shares, insurance policies, unit trust and cash are placed into the trust. This would allow the trustee to use the proceeds to pay for the children’s expenses for education, medical and maintenance. The Single Parent will act as the Main Trustee and only in the event of death, Total Permanent Disability or mentally ill, your named substitute trustee will continue on with the trust.
There are many advantages of creating a Single Parent Trust:
1. The single parent can ensure what he/she wants is followed to provide regular income to the children for the maintenance, education and medical needs. The trust ensures the assets are used for the intended purpose for the children.
2. The children can get money immediately – as the trustee owns the trust assets, there is no legal process or the need to go through the courts before the trustee can distribute the assets or income to the children.
3. Impartiality and avoidance of dispute – appointment of a trustee company, such as Rockwills Trustee Bhd as substitute trustee ensures that the trust is administered impartially and disputes are therefore avoided.
4. Confidential even to family – the instructions to the trustee stated in the trust deed are private and confidential. This means the courts and the public will not know of the contents of the trust and will not even know that a trust exists. Only the single parent and the trustee will know that a trust is created and the children will know about the contents much later.
5. It is easy to set up and affordable as the setup fee is only one off. There will be no fees charge until the happening of the triggering event mentioned above.
About the Author:
Evanna Phoon, CEO & Founder of www.MalaysiaWills.com is Malaysia’s No. 1 Online Will Writing Service Provider. She is the Franchisee of Rockwills (Non-Muslim Will Writing) and As Salihin (Muslim Will Writing). She has produced more than 200 free video on estate planning & written a book called “66 Items You Need to Know before Planning Your Will” which can be downloaded for Free @ www.MalaysiaWills.com She can be contacted via info@malaysiawills.com
