A person who dies without a Will is known as dying intestate. The Personal Representative will have to apply to obtain the Letters of Administration (LA). Note that for a person who dies with a Will but with no Executor (e.g. dies, resign, disabled, missing), the process is the same for obtaining the LA but it is called Letters of Administration with Will Annexed.

The process of LA as follows:

The following is my opinion. Others may disagree.

What’s 3G insurance? Insurance companies come up with a rather innovative product for legacy planning. The idea of 3G is that it is a (1) 3rd party, (2) whole life insurance, (3) limited pay premium that is (4) anticipated:

I would like to announce the availability of a new service I am providing called the Advanced Estate Planning (AEP). Advanced Estate Planning is normally only available for the high networth individuals but is now made available to the man-in-the-street. What is Advanced Estate Planning and how it differs from ordinary estate planning?

I encountered a situation which my client got taken for a ride for buying a non-par policy when it behave more like an ILP except the "fund" the insurer invests in is totally unknown: click HERE (client only, login required)

The year has just started and I want you to think about escaping from becoming a commodity. Let me explain what is meant to be a commodity.

Multilevel marketing or MLM for short is a method of compensation system for distributing products and services. In MLM, any commissions earned by a salesperson are also shared with the “upline”. Typically an MLM can consist of 3 or 4 levels and each level having a cut in commissions earned by the downline. MLM is not the same as pyramid selling. In pyramid selling, “commissions” are merely membership fees. There is no product or service being offered. For MLM, there must be products and services being offered. Therefore, pyramid selling is considered illegal. But what many greenhorn financial advisers did not know is that they get themselves into an MLM system without knowing. To read more, click HERE (clients only, login required).

When comes to Will writing, some people either do a DIY Will or get a lawyer to do it. Most of the time the Will is either invalid or is valid but practically useless. Why? A Will is merely a tool. If the tool is used wrongly, it is a rubbish tool. An analogy is like buying an insurance product:

In April 2009, I had feedback to MAS regarding their proposal to strengthen the regulation of sale & marketing of toxic products. My feedback sent to MAS can be found here.

MAS just responded to these feedback from the public. MAS response can be found here.

I had feedback that financial advisers should be fee-based rather than commission. Unfortunately MAS thinks this could raise the cost of advisory. MAS said:

Although the CPI shows that our inflation is generally low on a long-term basis, I really felt that the cost of living in reality is extremely high. I say this based on the experience of doing financial planning for families. In the past, a household gross income of $100,000 sounds like quite good. But over the past years, I found that a household income of $100,000 for a family of 4 is hardly enough. Normally they don’t have much money left. Most of the money left over actually goes to the CPF-SA and Medisave. In the CPF-OA, usually the bulk of the money goes to the HDB flat which has a long-term value of zero. I always check all the expenditure that my clients are spending and each item appeared to be reasonable on its own. Yet, when everything is added up the expenditure can be huge.

I read in the newspaper today that HDB resale flats “cash-over-valuation” keeps on rising. In one case, it was mentioned that a resale 5 room HDB flat cost $730,000 with a COV of $85,000! On average, the median COV from Q3 to Q4 rosed by 150% - 200% depending on location. I find this to be excessive and unreasonable.

Many people buy endowments that come in all sharp and sizes. Some give you regular cash back called dividends. People buy endowment because they felt that they cannot take any risk. But they don’t realize that endowments are not low risk. These days, hardly of these endowments promise to guarantee the return of capital. Much of these are merely projections. Moreover, even if there is a promise of return of capital – the real value of capital is not guaranteed. Inflation changes every year. Inflation is completely unknown in the future – there is no such thing as capital guarantee. Capital guarantee is merely a marketing gimmick for the financially uninformed.

One of the “fun part” of doing financial planning is that I get to see how people manage their money. It is a privilege of seeing people’s common ways of managing money and as well as unusual ways of how people spent their money. For individuals themselves, they will never know what are the “common ways” and the “unusual ways” because they will never disclose their full financial details to their friends or relatives. Even if they do, their “sample size” is limited. One of the “unusual ways” how some people manage their money is to buy endless number of insurance products.

I heard of a real life case of a cancer patient who was undergoing treatment. She was claiming on an on-going basis from private-integrated shield plan. However, she was advised by a friend to apply for Medishield from CPF Board. She listened to the advice and DIY the transaction herself. To her horror, the private-integrated shield plan was terminated automatically as it was thought she only wanted the Medishield and didn’t want the private shield plan. Many people did not know that the private-integrated shield plan includes the Medishield portion already. There is no need to “apply” a new one. Besides, this patient is already uninsurable, why on earth did she apply for a new insurance? Here are some lessons that one can learn:

The following is the procedure on what happens if you do not pay up for your hospital bill: Government assistance for patients. Note that the hospital can engage a debt collection agency. Therefore, it is highly important that one ensure adequate and correct type of medical insurance.

It was reported that Venezuelan is devaluing their currency. Initially I thought it means that it is now going to peg its currency to another (lower) value relative to the dollar. But as I read in Bloomberg HERE, I almost wanted to laugh at what the government was trying to do.

If you are purchasing a product, there are tons of layers of endless cost that do not benefit you. Here is a breakdown of cost in investing in funds: