Consider using universal life insurance in succession planning

A LARGE portion of Asia's economic success can be attributed to entrepreneurs, a majority of whom are very hands-on in managing their businesses. While this ensures a strong commitment to the business, it is just as important to plan for the continuity of the business when it is passed on to subsequent generations.

In a recent research report (commissioned by the Labuan International Business Finance Centre) from The Economist Intelligence Unit which interviewed family-owned businesses in South-east Asia, 67 per cent of the respondents said that they have made arrangements to ensure continuity after their current leaders step down. However, more than a fifth of the respondents said that they do not have a succession plan in place.

A succession plan is necessary for the smooth transfer of wealth to heirs and the continued success of your business, especially if your children are involved in the business. As the patriarch, you would need to consider who will benefit from the estate, the order in which they will benefit and the amount or percentage of the wealth that your children should receive. As a parent, you would also want to ensure fair and meaningful distribution of your wealth.