With Singapore solidifying its status as a premier global financial hub, the influx of foreign wealth into the country has surged – evidenced by the rise in the number of family offices surpassing 2,000 in 2024 (a 43% increase from 2023). This underscores the growing demand for sophisticated multi-generational wealth strategies in Singapore and the Southeast Asia region.

Xavier Lim, a five-year MDRT member, shares insights on how he helps his main clientele — HNW individuals in Singapore — navigate these challenges.

Strategies for wealth transfer

Lim emphasizes estate planning is crucial for successful wealth transfer. This includes using wills, trusts, and multi-generational life insurance as estate planning strategies. However, modern wealth planning extends beyond financial security to instilling core values in the next generation. As Lim notes, "Modern wealth planning is no longer just about financial security; it’s about shaping responsible heirs and preserving family principles."

For instance, a construction business owner sought Lim's guidance not only on structuring his estate but also on mentoring his children in soft skills, such as negotiation and problem-solving. The goal was clear: to ensure his children inherit not just wealth, but also the mindset and skills to manage and grow it.

On top of mentoring his client’s children bi-weekly, Lim helped this client implement an Index Universal Life (IUL) insurance structure to enhance wealth transfer efficiency, ensuring his family would have immediate access to liquidity without needing to sell cherished assets. Unlike traditional methods of passing down assets — where property or business succession can lead to disputes or liquidity challenges — IUL provides an immediate, guaranteed financial legacy. Lim explains, "Estate liquidity is crucial. Many Asian families hold substantial wealth in real estate, businesses or private investments, which may not be easily converted into cash when needed."

Handling challenges within HNW families

One of the most significant challenges in wealth succession is managing relationships across multiple households, particularly in Asian families where emotions can run high. Lim recounts a case where a successful entrepreneur faced tensions between his two families after a second marriage following a divorce. To address this, Lim helped his client establish a Family Constitution, setting clear governance rules and initiating a structured education program for the next generation.

Additionally, Lim implemented multiple layers of investment for his client’s families to construct a self- sustaining portfolio. By allocating assets into dividend-generating investments, there was a structured flow of passive income that covered daily expenses for both families without the need for constant financial intervention. “This way, neither household had to rely on ad-hoc distributions from the business, reducing potential disputes and ensuring long-term stability”, Lim shared.

This approach transformed the family dynamics, shifting the focus from rivalry to joint custodianship of their legacy. Lim emphasizes, "The key to managing generational wealth transfer in such situations isn’t just structuring assets, it’s also about shaping the right mindset. By focusing on governance, education and a self-sustaining investment framework, families can ensure that their wealth remains a source of unity rather than division."

With experience managing the financial portfolios of 250 clients, Lim believes managing generational wealth for HNW clients requires a holistic approach that combines financial planning with family governance and values. By focusing on wealth transfer strategies, education, and compliance with legal frameworks, advisors like Lim help families ensure their wealth remains a source of unity and prosperity across generations.

As Lim puts it, "True legacy planning isn’t just about transferring wealth, it’s about passing down wisdom, discipline, and a long-term vision for prosperity. As wealth creators, my clients are now more committed than ever to ensuring their successors inherit not just assets, but also the values that built them."

Contact: MDRTeditorial@teamlewis.com

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Managing generational wealth for high-net-worth clients