The multiple benefits of remote savings plans: we help this high-profile client to securely pass his legacy onto the third generation 

Our clients are a married couple in their 50s who jointly own a family business.

Their total net worth is over US$100M. They have 2 adult children. One is studying; the other works in the family business and has a newborn. The baby is the first grandchild for our clients.

1. The client is keen on finalizing asset planning as soon as possible to securely pass his wealth onto the third generation.
2. The client has substantial assets within the jurisdiction, and hopes to use them to fund any solutions.
3. Considering the ongoing pandemic and recurrent waves of outbreaks,the client wishes to avoid overseas travel as much as possible.

After reviewing the clients’ needs, unique circumstances, and all available solutions, PCS by Mercer recommended three identical Hong Kong Savings Plans – one for each of his grandchildren.

• The savings plans recommended are highly flexible and can be incepted remotely by the client through PCS by Mercer’s Sandbox remote process, without any need to travel. When compared to cash gifts with equivalent value, the savings plans have the additional benefit of reducing the client’s gift tax base, as legislated in the jurisdiction in which he resides.*
• Premium payments: USD 500,000 per year for five years x three grandchildren.
• Breakeven point: Approximately Year 8.

Savings plans can simply facilitate the transfer of secure assets to the third generation, or even from generation to generation.

Hong Kong savings insurance products are exceptionally flexible. The plans normally can provide unlimited conversions of policy owners and insureds, as well as beneficiaries. Clients usually can also replace backup insureds and policy heirs at any time. The insurers accept direct remittance to pay premiums from a number of jurisdictions.

On 30 May 2022, we began participating in a new 12-month trial pilot program in which PCS by Mercer is able to deliver insurance broking services for Hong Kong-based life protection solutions to clients in five overseas markets. In doing so, we are cementing our reputation as the digital trailblazer in the high and ultra-high net worth (HNW and UHNW) insurance space.

Clients from these approved jurisdictions who don’t wish to travel – for any reason – can access the remote application programs in Hong Kong, and complete the entire insurance application process while holding the policy in their own name. We are experts in finding the right solutions in different jurisdictions. We work to maximize the utility of clients’ assets in, and across, sovereign borders.

*Benefits are specific to individual clients’ unique circumstances and cannot be assumed to apply universally. The above example is for illustrative purpose only and does not constitute any tax advice. Clients are always advised to seek expert legal and tax advice.