Saturday, August 25, 2012

Why having MLTA is not enough?

Many home owners buy MLTA as they see the value as compared to MRTA. (click here for MLTA vs MRTA).

However, is it the end? Mission accomplished?

Financial advisor should have done more than that. By having MLTA, part of the problem solved (having money to pay for debt in case of triggering events) but the other part of the problem still unsolved (how and when to pay the debt?).

Why I say so?

Just imagine, Mr. A bought a condo, bought MLTA.

Triggering event happened to Mr. A (esp. Death), the insurance company will pay a huge lump sum but will that money be eventually goes to settle the loan?

Many things will happen in between, many just beyond imagination, therefore, the house is still not your love one but belong to the bank.

How to solve the problem?

Write a Will or event set-up a Trust. It is not that costly as compared to if something happened without a proper paper like Will or Trust.