2. Wealth Planning, Estate Planning, and Asset Protection

There is an old Chinese saying: “Wealth does not last three generations.” Without proper planning, this may well be the case for many first-generation wealth creators. For lottery winners, history has shown that their newfound wealth may not even last their own lifetimes[6].

Similarly, individuals who have built their wealth through years of hard work and astute business decisions must prioritise wealth and estate planning to preserve their assets across generations. While they may be commercially savvy, effective wealth management is essential to ensuring their legacy is protected and their financial security endures.

Proper wealth and estate planning is crucial for wealth preservation, regardless of whether wealth is earned or won. High-net-worth individuals should consider implementing legal structures such as trusts, wills, and foundations to secure their wealth for themselves and their families. Establishing a trust that provides periodic payouts can be a practical strategy to maintain financial discipline and protect wealth from mismanagement or external claims.

Key legal tools to consider include:

• • Wills: A well-drafted will ensures that assets are distributed according to the individual’s wishes, helps avoid family disputes, and simplifies the estate administration process.
  • Trusts: A trust can provide several benefits, such as:

• • • Protecting wealth from family disputes or creditor claims.
    • Ensuring succession planning for future generations.
    • Providing structured disbursements that align with long-term financial goals.

• • Foundations: For those interested in philanthropy, setting up a foundation can create a structured and tax-efficient way to give back while preserving wealth for charitable purposes.

3. Managing Requests for Gifts, Loans, and Investments

One of the biggest challenges faced by both lottery winners and HNWIs is handling the influx of requests from friends, relatives, and even acquaintances seeking financial assistance. Whether it is requests for gifts, loans, or investment opportunities, the pressure to say “yes” can be overwhelming. Without proper planning and safeguards, wealth can quickly diminish through impulsive generosity or poorly thought-out decisions.

Having a solid financial strategy in place is essential for managing these requests effectively. Engaging professional financial and legal advisors can help create structured approaches to wealth management that prevent hasty decisions and protect against undue influence or financial exploitation.

Key strategies to consider include:

• • Setting Clear Financial Boundaries: Establishing clear guidelines on how and when financial assistance will be provided can help individuals make thoughtful decisions without straining relationships.
  • Structured Fund Management: Placing winnings or assets into financial structures such as trusts or managed investment portfolios can help limit accessibility, ensuring that funds are preserved for long-term goals rather than impulsive spending.
  • Saying “No” with Confidence: Having a professional team in place allows individuals to defer financial requests by explaining that financial matters are handled by advisors, thus providing a polite but firm barrier against unreasonable demands.
  • Conducting Due Diligence: Any investment opportunity—whether presented by a family member or an external party—should be carefully vetted with the assistance of qualified financial and legal advisors to avoid potential scams or unwise ventures.

Whether wealth is newly acquired or accumulated over years, establishing clear policies and professional safeguards ensures that financial resources are used wisely while maintaining personal relationships and long-term financial security.

Conclusion

Whether acquired through a fortunate windfall or years of hard work, significant wealth brings both opportunities and responsibilities. Proper tax planning, sound wealth management, and the implementation of legal structures are essential to ensuring long-term financial security and legacy preservation. Taking proactive steps to manage and protect wealth can help avoid potential pitfalls and ensure that assets are preserved for future generations.

If you have any queries regarding succession planning, wealth management, or asset protection, please contact Partners Andrew Chiew Ean Vooi (ac@lh-ag.com), Bella Chu Chai Yee (cy@lh-ag.com), Chng Keng Lung (ckl@lh-ag.com), or Chris Toh Pei Roo at (tpr@lh-ag.com) of Lee Hishammuddin Allen & Gledhill’s Succession, Trusts, Estate Planning & Private Wealth (STEP) Practice.

REFERENCES

[1] The Edge, “Nationwide frenzy: Long queues at Sports Toto outlets as punters hope to win RM100m jackpot” dated 18.2.2025: https://theedgemalaysia.com/node/741543

[2] https://www.nst.com.my/news/nation/2025/01/1163010/jaw-dropping-jackpot-long-queues-snake-fight-and-just-3-winners-watch

[3] The odds of winning the Toto 6/58 jackpot are 1 in 40,475,358

[4] https://lh-ag.com/tax-customs-trade-special-alert-navigating-capital-gains-tax-roadmap-to-a-new-tax-landscape/ ; https://lh-ag.com/tax-customs-trade-special-alert-cgt-vs-rpgt-a-flowchart-guide/

[5] https://www.legal500.com/developments/thought-leadership/post-svdp-2-0-and-the-return-of-the-revenue-navigating-new-challenges-in-tax-audits-and-investigations/ ; https://thesun.my/business-news/tax-matters-high-net-worth-individuals-are-on-irb-s-radar-MD12224769

[6] https://www.businessinsider.com/lottery-winners-lost-everything-2017-8