Wealth can often insulate you from some of life’s challenges, creating a sense of exceptionalism. However, the sweeping, indiscriminate nature of the Coronavirus and its unforeseen consequences have laid bare our collective vulnerabilities.


Even the exceptional have risks to be managed.


Insurance solutions, family constitutions and legacy letters exist to help you mitigate your risks. If you have the foresight, you can manage legacy outcomes – both financial and family – for more than 100 years. We show you how.


In this issue:

Creating and maintaining lasting family harmony

Three reasons why Singapore is a great place to be for the ultra-high net worth (UHNW)

Checklist for planning for your 100-year legacy

Case study: Balancing diversification and legacy in these times of COVID-19

Creating and maintaining lasting family harmony


We have recently interviewed Jacintha Pillay from Sim Mong Teck & Partners and this article is a record of the interview.


The transfer of wealth and decision-making power can cause tension and protracted schism within families. How do you create true understanding and acceptance of the sentiments behind your decisions? And more importantly, how do you minimize the risk of family conflict over the division of assets? 


Jacintha Pillay*, has extensive experience in family legacy planning in Singapore, explores the role of family constitutions and legacy letters in creating and maintaining lasting family harmony.


According to Ms. Pillay, “Families are like small sovereign countries, each with their own history, traditions, culture, values and potential for deep misunderstandings and conflict amongst its ‘citizenry’.


“Family constitutions and legacy letters can help families navigate a common path from disparate perspectives.” 

What is a family constitution?                                                                            
Like the set of rules for governing a country, a family constitution is a set of rules unique to a family. They:
  • Guide how decisions that affect the family – such as investments – are made
  • Ensure decision-making processes, values, guiding principles and valuable lessons of the family are accurately reflected, clearly organized and documented
  • Are not legally binding, but powerful documents in ensuring family cohesiveness via individual accountability
  • Act as the framework for conduct, and thereby, steer families forward together. The togetherness promotes harmony
  • Are particularly helpful in large and growing families and is intended to be an evolving document to meet a family’s changing needs
What is a legacy letter?                                                                                              

Your legacy beyond assets is not always tangible. How, for example, do you communicate the deeply passionate ethos that drive your philanthropic efforts? 

Legacy letters:

  • Are not legally binding, but are morally persuasive
  • Explicitly explain your values, beliefs and expectations – the why behind your decisions. (E.g., An uneven asset split among siblings can potentially be satisfactorily explained by a legacy letter)
  • Work beautifully with the will to convey the reasons behind your decisions and other important, non-tangible wishes
  • Are more general than a family constitution and could be useful to anyone regardless of the extent of their wealth


Why do families need constitutions and legacy letters? 


How well your children and grandchildren live according to family values and traditions depend, to a large extent, on how well you communicate – not just the what the traditions and values are, but also why they are important. That’s where family constitutions and legacy letters come to the fore. 


Whilst legal instruments like wills, company and tax structures, shareholder agreements and family trusts facilitate succession planning and wealth transfer, they cannot comprehensively convey the nuances and thought processes behind your decision-making. To put it in another way, legal instruments are black and white; family constitutions and legacy letters help you color in and complete the picture. 


As your family business grows and your world becomes increasingly complex, informal rules of the family become insufficient in dealing with that complexity. 


The challenge of navigating the intersection of family and business is particularly acute in instances where not all family members work in or are shareholders of the business.  


Family constitutions help reduce protracted conflict by clarifying how decisions are made and why it works the way it does in your family.  


In addition, constitutions and legacy letters help educate the next generation about the wealth and attendant responsibilities they will inherit. It’s crucial they understand that managing and investing money carries a great deal of privilege as well as obligation, not only for themselves, but for the entire family.  


Drafting family constitutions and legacy letters can also be a good opportunity to strategically disclose the full extent of your wealth while beginning the generational education process. 


True buy-in takes time


Your small country is likely to include some big personalities. Different perspectives are to be expected whatever the size of the family, so the process of establishing a family constitution that takes everyone’s viewpoint and garners buy-in can be a time-consuming process, taking between six to twelve months. 


The process is well established and generally involves a team that includes psychologists, so that each person’s voice can truly be heard and taken into impartial consideration. 


Whilst retirement planning is a common trigger for establishing family constitutions and legacy letters, the rewarding process can be undertaken with adult children at any stage.   


Just as legacy letters and family constitutions help UHNW families manage potential family conflict, PCS by Mercer’s tailored solutions help our clients mitigate potential risks in wealth and legacy transfer. 



* Jacintha Pillay is a Senior Partner at Sim Mong Teck & Partners. She specializes in Family Legacy Planning, Trust Advisory, Conveyancing and Private Client advisory work. She has experience in many jurisdiction but for this interview, she speaks only from a Singapore perspective.


PCS by Mercer spoke to Jacintha Pillay on 3rd March 2021, and this article is reflective of her general views on that date. It is not intended as advice.

Three reasons why Singapore is a great place to be for the ultra-high net worth (UHNW)


Google co-founder Sergey Brin is the world’s ninth richest person. In the midst of the ongoing pandemic, he is following the trend of other high net worth (HNW) and UHNW individuals and moving his family office to Singapore.


To find out why Singapore is the place to be, we interviewed Kylie Luo, an Executive Director at BDO Tax Advisory Pte. Ltd. who has over 20 years of experience in Singapore and international tax.*


According to Ms. Luo, three key trends are making Singapore more attractive than ever.


1. Not a “tax haven” but a nation with a competitive tax regime


Strategic government policies around tax and business operations have positioned Singapore on the ‘right’ side of global tax regimes, increasing the nation’s appeal to UHNW families.


Whilst historically, the same families might have held significant assets in offshore tax haven jurisdictions, it has become less feasible to do so over the past decade as scrutiny on tax transparency and disclosure across the world have increased. 


The introduction of the common reporting standards and exchange of information between countries mean that information on the assets of UHNW families are now more accessible by tax authorities – irrespective of geography. 


The increasing pressure on asset transparency is changing UHNW behaviour. 


A trend can be observed, whereby UHNW families are seeking to move their assets onshore – to jurisdictions on the OECD’s ‘White List’ that also offer attractive incentives. Singapore is one such jurisdiction. 


Moving assets onshore to Singapore is made easier by the Singapore Voluntary Disclosure Program, which allows UHNW families to correct any erroneous tax filings made in earlier years. An additional attraction is the absence of estate and capital gains taxes, two taxes that have significant ramifications on generational wealth transfer. 


The tax incentives combined with the nation’s thriving economy are growing Singapore’s reputation as a significant wealth hub. Furthermore, Singapore has a stable political environment, a well-established financial sector with a strong rule of law.


2. Clear pathway to residency 


While over 135 countries globally are collaborating to conclusively manage jurisdiction-based tax avoidance strategies,  not every country has established clear pathways for economic migration.  


With its eye firmly on boosting the nation’s economic prosperity, the Singapore government has established strong and relatively well-defined pathways for UHNW individuals to gain permanent residency along with their families.  The ‘via business investment’ pathway is increasingly popular – the city-state is now home to at least 44 of the world’s billionaires. 


3. It’s a great place to be if you are risk averse  


Alongside its deep and wide-ranging wealth management services, Singapore’s exceptional education, healthcare and lifestyle offerings and its stability, even in the midst the pandemic, are adding to its appeal, most particularly for the risk averse. 


Various border closures, the slowdown of international travel and more time at home has meant time for reflection. For some UHNW families, taking a step back has created the space to review, not just their asset holding and business structures, but their risk tolerance, especially when it comes to their personal lives. 


Experiencing the ‘black swan’ pandemic event has changed perspectives and there appears to be a marked trend of UHNW families seeking to mitigate their personal risks by setting up more family trust structures and purchasing insurance solutions. 


They are safeguarding their family’s post-COVID-19 future in a place ranked (by Forbes), in the top 10 of the world’s safest countries for COVID-19. 


* Kylie Luo is an Executive Director at BDO Tax Advisory Pte. Ltd.


She has over 20 years of experience in Singapore and international tax. This article is specifically from a Singapore perspective. PCS by Mercer spoke to Kylie Luo on 5th March 2021, and this article is reflective of her general views on that date. It is not intended as advice.


i https://www.bloomberg.com/news/articles/2021-02-03/google-co-founder-brin-s-family-office-to-open-in-singapore


ii https://www.oecd.org/tax/beps/


iii https://www.businessinsider.com/the-richest-people-living-in-singapore-ranked?r=AU&IR=T


iv https://www.forbes.com/sites/johnkoetsier/2020/06/05/the-100-safest-countries-in-the-world-for-covid-19/?sh=7ecc07268c53



Checklist for planning for your 100-year legacy


When our clients embark on legacy planning, they often start with simple questions:


1. Who am I planning for?

2. What asset(s) to which beneficiary?

3. When to transfer and distribute the assets? And 

4. How do I implement my plan?


These seemingly simple questions, however, have no easy answers. The central objective of lasting family harmony must be remembered if you want to leave a well-considered legacy, and that objective can be achieved through careful planning.  


The planning process can be daunting because everyone wants their solution to be thorough and all-encompassing, both across time and in scope. An enormous number of things must necessarily be taken into consideration, including, but not limited to cultural acceptance, moral obligations, individual beneficiary preferences as well as imagining different possible scenarios and potential adverse outcomes. 


Our checklist is designed to help you begin your journey in passing your legacy on to future generations: 


• Make a comprehensive list of all assets and liabilities, both personal and business
• Consult jurisdictional tax experts, including the jurisdictions of wealth originator’s tax residence and beneficiaries as well as those of situs assets
• Business successor must be both capable and willing – professional managers should be considered if either is in doubt
• Consider gifting beneficiaries working outside of family businesses with bank assets or real estate
• Create liquidity from life protection solutions to equalize estate. The resultant liquidity can accommodate generational tax liability 
• Consider giving beneficiaries freedom of choice to pursue their passion – fully understanding the pursuits might not bring economic independence and that passive income generation might be required
• Insurance companies with longstanding and stable performance can be used as intergenerational institutional money manager for a proportion of family assets. The enhanced feature of ‘unlimited change of life insured’ allows policies to extend up to 120 years. The long extension of policy allows policy returns to compound while providing passive income and can still result in an enormous payout to the final beneficiaries. This strategy enables wealth to potentially extend beyond three generations while simultaneously act as asset allocation and risk diversification
• Intergenerational wealth transfer should be scaffolded with thorough education and strong values
• Remembering that nurturing a sense of responsibility, discipline, resilience and compassion are as important as the amount of wealth passed on
• Family constitutions and legacy letters provide moral guidance for possible conflict and set the foundation for a family tradition of strong cohesion


At PCS by Mercer, we tailor insurance solutions on a generational time scale. Contact us to find out how we can help you pass on your exceptional legacy.




Lim Ai Lin

Vice President

Private Client Services by Mercer Pte. Ltd.

E: AiLin.Lim@mercerpcs.com 

Stock photo of a good looking man &  woman working in an office surrounded by large computer monitors.

Case study: Balancing diversification and legacy in these times of COVID-19




PCS by Mercer’s client: a couple with children aged between 17 and 34 with assets of more than US$100m.


The Coronavirus pandemic’s social distancing requirements and resultant work stoppages have seriously disrupted their business cash flow. Our clients are aware that similar ‘black swan’ events might become more frequent in the future and they need to: 


  1. ‘Weatherproof’ their income/cash flow by diversifying into alternative investments 
  2. Derive a steady stream of passive income from investments with a private bank
  3. Preserve their wealth and legacy for future generations
  4. Guard against inflation





  • Jumbo life insurance policy amounting to US$100m in total coverage
  • US$15m premium  
  • The multipliers range from x3 for the patriarch to x12 for the youngest child
  • Clients are committed to solution reviews every two to three years and plan to progress with a second tranche as the family grows through marriages and births
  • Policies are held by a trust for ease of future distributions (patriarch as settlor with wife and children as beneficiaries of the trust)


Key takeaways


  1. The life insurance policy can ensure their family wealth is preserved and protected against inflation (through low-risk investments)
  2. At each triggering event, the trust will be injected with fresh funds. A lasting legacy of wealth is thus created for future generations
  3. Funds for investment in diversified financial products can be made more readily available (potentially creating a steady stream of income).


Lee Seok Ling 

Assistant Vice President

Private Client Services by Mercer Pte. Ltd.

E: Seokling.lee@mercerpcs.com