An old man and his regret.

I was servicing a high net worth individual, and the subject was on the possibility of setting up a trust to minimise estate duty for the beneficiaries. He told me a recent story that happens in his social circle. A prominent businessman set up a trust for 3 of his children. When he retires at age 60 (25 years ago), he budgeted himself with $10 million to maintain himself and his wife. The trust, on the other hand, is worth in excess of $600 million, and the children (now in their 40s and 50s) receive $100,000 per month from the trust proceeds perpetually.

It looks good and happy. But lets take a look how this situation ends.

The old man lives into a ripe old age with medical problems. His $10 million has not kept up with the inflation (associated with his living standard). He requested the trustee of his children's trust to allow him to liquidate a small portion of the trust assets to pay his medical bills and live simply in the twilight of his life. The children (beneficiaries of the trust) objected. He laid down his pride and pleaded with his children. Again, they refused him. The relationship between father and children has since broken down. The old man developed a stroke and is now kept somewhere in the corner of an unknown hospital, counting his days.

"How much did he ask from the trust and his children?" I asked my client.

"$3,000 (yes, it is three thousand dollars) per month." Client told me.

Sometimes, in financial planning, we are so caught up with the numbers, tax rates, investment returns, that we fail to consider the fragility of life and relationship amongst people, that in the end can cause a bigger problem.

I learnt a great deal in this case about financial planning and human.

A lesson from an elderly couple

I helped an elderly Indonesian couple in their financial planning matters. 2 years ago, the goal was to transfer their wealth from Singapore back to Indonesia because they felt Singapore was too expensive to live. They bought a piece of land in an exclusive area on a mountain range, built a nice bungalow which is surrounded by the beauty of nature.

This time round, I was surprised that they wanted to shift back to Singapore. Below were excerpts of our conversation:

Me: "Why do you want to shift back? You have already spent so much money and effort."

Elderly man:"Yes, we love the house, the beauty of nature. But in life sometime you just mis-calculated, and life have to go on."

Me:"Is it because of your wealth and the locals got uneasy with you?"

Elderly man: "No, we kept a low profile, dress and eat simply. But somehow we are not being accepted by the local people."

Me: "But you and auntie(wife) were born and grew up in Indonesia, you speak the local language as well as anybody there?"

Elderly man: "Yes we were born there. But because we are Chinese, a line has been drawn between us and the locals. We get along well, but only superficially. We were lonely most of the time. This problem will be serious if one of us dies. The surviving spouse will have great difficulty living alone. Over here, we know fewer people, but we made more friends."

I learnt a great deal in this meeting. Sometime, we like to view the grass is greener at the other side, and neglect our own turf. It is good wisdom to spend time to nurture and work on the grass in our own turf. The grass will always look greener at the other end (i.e. place of residence, career, spouse etc), but it is the grass in our hand now that is real, solid, and meaningful. It is up to us to make it beautiful.