Many people have opinions of the best type of will for Malaysian couples in Malaysia. As there are several type of wills in Malaysia, it’s a little bit hard to place and decide which ones are the best ones.

For Malaysian couples, there are a few types of wills they can consider having. Here are a few types of wills Malaysian couples can consider. 

1. Basic will 

This is the simplest and most straightforward will most Malaysians can and will consider. As its framework is comprehensive and easy to comprehend, many couples tend to opt for this kind of will. 

In a simple will, the contents are pretty straightforward. All you need to include are your trustees and your beneficiaries. In a simple will, you’ll include all your assets and how it is divided up between your beneficiaries. 

You can have a lawyer to legalize this simple, basic will so it will be harder for 3rd parties to contest it. Although non-legalized wills may not hold as much power as a will that is legalized by a certified lawyer, it’s still valid nonetheless. You can also edit the will every now and then when you have acquired new assets or let go of some. 

2. Testamentary will 

A testamentary will is one where you place some assets into a trust for the benefit of your beneficiaries. You will then name a trustee to handle your trust for you. It’s useful when you have beneficiaries who are minors or underage and you’ve passed away before your time. 

As you may pass away before your beneficiary (your children, for instance), you may not want them to handle the assets on their own for very logical and understandable reasons. In this case, the appointed trustee will guide and look after how your assets are managed until the minor beneficiary become of legal age. 

In this kind of will, you can put assets in the trust and place certain terms and conditions on the inheritance. It’s kind of like a step-by-step guide except in the form of a will or trust. In this kind of will or trust, you can say by a certain age, the minor beneficiary can inherit some assets and whatnot. By a certain age, the “minor” beneficiary would have inherited all of their shares in the will. 

3.  Joint will 

A joint will is one that mirrors each other. This is the other most common will for married Malaysian couples. Also known as a mirror will at times, it is executed by spouses in favor of your spouse to inherit everything. 

The terms in a joint will cannot be changed at all. Not even the executor, beneficiaries, trustees, and other provisions can be changed in a joint will. If one of the spouses or testators passes away leaving behind their spouse and family, the remaining spouse also cannot change anything in their own will. 

As a joint will is inflexible, it can be problematic for surviving spouses. As their wishes may change after their spouses have passed away, there isn’t much they can do to change their side of the will. 

4. Living will 

A living will is another kind of will married couples in Malaysia should consider having. It has nothing to do with distributing your property after your death. However, a living will is for when you are incapacitated and for you to choose what medical treatments you want to have. 

In the very same living will, you can also name someone to make decisions on your behalf. You may have more than one kind of will that coexists with other existing wills. They can both be valid as different wills serve different purposes. 

Bottom Line 

Having the help and assistance of a lawyer when it comes to writing a will and legalizing it is important. If you are a married Malaysian couple and are looking for assistance in will writing, feel free to contact us today. 

Charitable giving is a noble endeavour that can be effectively facilitated through the use of trusts. In Malaysia, leveraging trusts for charitable purposes offers numerous benefits, including tax advantages, structured giving, and long-term impact. This article provides insights into how Malaysians can utilize trusts for charitable giving.

Understanding Charitable Trusts

A charitable trust is a legal arrangement where the settlor transfers assets to a trustee to be managed and used for charitable purposes. This type of trust can also be structured to meet specific needs and goals aside from charity.

The trust deed outlines the specific charitable objectives and how the trust assets are to be utilized.

Benefits of Charitable Trusts

1.Tax Advantages:

Charitable trusts can offer significant tax benefits. Donations to charitable trusts may be eligible for tax deductions, reducing the settlor’s taxable income. Additionally, assets transferred to a charitable trust are typically not subject to estate taxes, providing further tax savings.

2.Structured Giving:

A charitable trust allows for structured and strategic giving. The settlor can specify how and when the trust assets are to be used, ensuring that the charitable objectives are met in a planned and sustained manner.

3.Long-term Impact:

Charitable trusts can be designed to provide long-term support for charitable causes. By establishing trust, the settlor can create a lasting legacy that continues to benefit the chosen causes beyond their lifetime.

4.Control and Flexibility:

The settlor can retain a degree of control over how the trust assets are used, ensuring that their charitable intentions are followed. The trust deed can also provide flexibility in adapting to changing circumstances or needs.

Types of Charitable Trusts in Malaysia

1.Private Charitable Trusts:

These are established by individuals or families to support specific charitable causes. The settlor can specify the beneficiaries and the purposes for which the trust assets are to be used.

2.Public Charitable Trusts:

These trusts are created to benefit the general public or a broad segment of the community. Public charitable trusts must comply with stricter regulatory requirements and are often subject to greater public scrutiny.

Establishing a Charitable Trust

1.Identify Charitable Objectives:

Determine the specific charitable purposes you wish to support. This could include education, healthcare, poverty alleviation, environmental conservation, or other causes.

2.Draft the Trust Deed:

The trust deed is the foundational document that outlines the terms of the trust. It should include the charitable objectives, the assets to be transferred, the roles and responsibilities of the trustees, and the distribution plan for the trust assets.

3.Select Trustees:

Choose trustees who are committed to the charitable objectives and capable of managing the trust assets effectively. Trustees have a fiduciary duty to act in the best interests of the charitable beneficiaries.

4.Fund the Trust:

Transfer the chosen assets into the trust. These can include cash, real estate, investments, or other valuable property. Ensure that the transfer is legally documented and complies with all relevant laws.

5.Register the Trust (if required):

Depending on the nature of the charitable trust, registration with the relevant authorities may be necessary. This is particularly important for public charitable trusts.

Managing a Charitable Trust

1.Compliance and Reporting:

Trustees must ensure that the trust complies with all legal and regulatory requirements. This includes maintaining accurate records, filing necessary reports, and adhering to the terms of the trust deed.

2.Investment and Distribution:

Trustees are responsible for managing the trust assets prudently and making distributions under the trust deed. This may involve investing the assets to generate income for charitable purposes.

3.Review and Adaptation:

Regularly review the trust’s performance and adapt the strategies as needed to ensure the charitable objectives are being met effectively. This may involve revising the investment strategy or modifying the distribution plan.

Conclusion

Leveraging trusts for charitable giving provides Malaysians with a powerful tool to support their philanthropic goals. By understanding the benefits and processes involved in establishing and managing a charitable trust, individuals can create a lasting impact on the causes they care about. Consulting with legal and financial professionals is essential to ensuring that the trust is structured correctly and operates effectively, maximizing the benefits for both the settlor and the charitable beneficiaries.

For further information, please visit our website, Sim & Rahman, or send us an email at rahman@nababanassociates.com.

Let’s unravel the complexities, identify potential pitfalls, and guide you on how to craft an ironclad will that stands resilient against the unique challenges foreigners might encounter.

The Legal Nuances of the Malaysian Will Framework

For foreigners, understanding the differences in requirements compared to locals is like deciphering a legal code. 

1. Deciphering Legal Code

For foreigners, the Malaysian legal framework surrounding wills may seem like a cryptic code waiting to be unraveled. It’s not just about recognizing the written words; it’s about understanding the cultural and legal context that gives those words meaning. From the choice of language to the specific requirements outlined in the law, these nuances require careful consideration to ensure your will aligns seamlessly with Malaysian legal expectations.

2. Cultural and Legal Synthesis

The legal seas of Malaysia are influenced by a blend of cultural and legal currents. Understanding these currents is paramount, especially for foreigners crafting their wills. It’s not merely about compliance with legal statutes; it’s about crafting a document that resonates with cultural expectations. The nuances extend beyond the words on paper, delving into the cultural ethos that surrounds the testamentary process. 

3. Adapting to Local Legal Expectations

What may be standard practice in a foreign jurisdiction might not necessarily align with Malaysian legal expectations. These distinctions form part of the nuanced currents that foreigners must navigate when crafting a will. It’s about adapting your testamentary wishes to meet not only the legal requirements but also the expectations embedded in Malaysia’s legal culture. 

Pitfalls Foreigners Encounter When Will Writing in Malaysia

From overlooking cultural norms to missing crucial legal specifications, it’s a minefield of potential errors. We’ll shine a light on these pitfalls, providing you with a treasure map to navigate through potential missteps and ensure your will is not only heartfelt but legally airtight.

1. Overlooking Cultural Norms

One of the primary pitfalls that foreigners often encounter is underestimating the impact of cultural norms on the testamentary process. Malaysia’s diverse cultural landscape introduces nuances that extend beyond legalities. From familial expectations to customary practices, overlooking these cultural norms can lead to unintended consequences. 

2. Missing Crucial Legal Specifications

Navigating the legal seas demands precision, and missing crucial legal specifications can be a perilous pitfall. Whether it’s the choice of language, the proper execution of the document, or adherence to specific legal requirements, these details can make or break the validity of your will. 

At Sim & Rahman, we’ll provide a comprehensive checklist, highlighting the essential legal specifications that foreigners must pay careful attention to, ensuring that your will not only reflects your intentions but does so within the bounds of Malaysian legal requirements.

3. Ambiguity and Interpretation Risks

Crafting a will involves more than just putting pen to paper; it requires clarity to prevent ambiguity and interpretation risks. Foreigners may inadvertently introduce language that could be open to various interpretations, leading to potential disputes. We’ll navigate this minefield by offering practical advice on how to express your wishes with clarity, minimizing the risk of misinterpretation and safeguarding your will against potential legal challenges.

Key Elements of a Malaysian-Compliant Will

Now, let’s assemble the building blocks of an ironclad will. Ahead, let’s explore how our team of experts guide you through the meticulous process.

1. Choice of Witnesses

The cornerstone of a valid Malaysian-compliant will lies in the selection of witnesses. We’ll explore the specific requirements for witnesses, emphasizing their role in ensuring the authenticity of your testamentary wishes. 

Understanding who can serve as a witness, the number required, and their obligations during the witnessing process forms a critical element of your toolkit.

2. Language Precision

Crafting a will involves not only expressing your wishes but doing so with precision. The language used in your will is a crucial element, and we’ll delve into the nuances of ensuring clarity and accuracy. 

From avoiding ambiguous terms to using legally recognized language, this segment of your toolkit is dedicated to enhancing the communicative power of your will while minimizing the risk of misinterpretation.

3. Declaration of Assets

Transparency is key when it comes to the distribution of assets. We’ll guide you through the process of declaring your assets in a manner that aligns with Malaysian legal requirements. 

Whether it’s real estate, financial holdings, or personal belongings, a comprehensive and clear declaration minimizes the potential for disputes. This component of your toolkit ensures that your will not only reflects your wishes but provides a detailed roadmap for the equitable distribution of your estate.

4. Appointment of Executors and Trustees

Your will is a living document that requires trustworthy stewards. We’ll explore the critical elements of appointing executors and trustees—individuals tasked with executing your wishes and safeguarding the interests of your beneficiaries. 

Understanding their roles, responsibilities, and the criteria for selection will be integral in fortifying your will against potential challenges.

5. Adherence to Legal Formalities

Beyond individual elements, the overall adherence to legal formalities is paramount. We’ll provide a comprehensive checklist, ensuring that your will complies with the specific legal requirements outlined by Malaysian law. 

From the signing process to the inclusion of necessary clauses, this overarching element of your toolkit serves as a final layer of defense, solidifying the legal validity of your will.

Collaborating with Local Legal Experts

It’s not merely about fortifying your will; it’s about ensuring that your testamentary journey is not just robust but fortified against any potential contestation.

1. Insights into Local Nuances

Local legal experts serve as navigators in the intricate web of Malaysian legal intricacies. Our professionals possess insights into the nuances of local law that may elude those unfamiliar with the terrain. From specific procedural requirements to unwritten legal traditions, their expertise becomes a beacon, illuminating potential pitfalls and ensuring your will adheres seamlessly to the local legal fabric.

2. Tailoring Your Will to Local Expectations

Crafting a will isn’t a one-size-fits-all endeavor, especially in a country with a rich tapestry of legal and cultural diversity. Collaborating with local legal experts allows for the customization of your will to align with local expectations. Whether it’s language nuances, specific legal formalities, or cultural considerations, their guidance ensures that your will not only complies with the law but resonates with the expectations rooted in the local legal landscape.

3. Mitigating Ambiguities and Challenges

In the realm of legalities, ambiguity can be a breeding ground for challenges. Local legal experts serve as guardians, helping to mitigate potential ambiguities in your will. Our experts’ insights contribute to crafting precise language, reducing the risk of misinterpretation, and safeguarding your will against potential legal challenges. Their role becomes instrumental in creating a testamentary document that withstands the scrutiny of any legal contestation.

4. Navigating Dual Jurisdictions

For expatriates, the complexity intensifies when dual jurisdictions come into play. Local legal experts understand the interplay between international laws and Malaysian legal frameworks. What they do best has become a crucial asset in ensuring that your will is not only valid within Malaysia but also harmonized with the legal requirements of your home country. Navigating this intersection demands a nuanced understanding that only local legal professionals can provide.

5. Preventing Potential Contestation

A fortified will is one that stands resilient against potential contestation. Collaborating with local legal experts is akin to adding layers of protection. By leveraging their knowledge of local legal precedents, cultural expectations, and procedural nuances, you create a testament that is not only robust but strategically designed to minimize the likelihood of disputes among beneficiaries.

Your Will Isn’t Just A Document; It’s A Legacy

As you embark on this path, consider your will not merely as a document but as a living legacy—a narrative that transcends generations. Crafting a will isn’t merely a legal obligation; it’s a profound act of shaping the future and preserving the essence of who you are.

This isn’t just a conclusion; it’s an invitation. An invitation to recognize the power your will holds with our team of experts, crafting a will masterpiece in this captivating land. Visit https://nababanassociates.com/our-blog/ for additional resources. 

Have you got everything in order? 

By “in order”, we mean the following: 

1.      Have a will and trust ready 

Create a will and/or a trust under your name and have it validated by a recognized lawyer in Malaysia. If you haven’t got one, get one nonetheless. Regardless of the size of your wealth, it’s always good to have one. There is a difference between a will and a trust: 

“A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children. If you die without a will, those wishes may not be carried out. Further, your heirs may end up spending additional time, money, and emotional energy to settle your affairs after you’re gone.”

-“What Is a Will, What Does It Cover, and Why Do I Need One?” Lisa Walters on Investopedia 

Trust, on the other hand, means: 

“A trust is a legal entity with separate and distinct rights, similar to a person or corporation. In a trust, a party known as a trustor gives another party, the trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary.” 

-What Is a Legal Trust? Common Purposes, Types, and Structures by Julia Kagan on Investopedia 

2.      Update your wills and trusts regularly 

Some people think that it’s okay to leave their wills and trusts as they are. Though for some people, this may be the case, it may not be the same for everyone else. Not everyone’s assets will remain the same forever. If your assets grow exponentially every year, then yes you will need to update your wills and trusts regularly.

For example, this year your assets are only limited to your bank accounts and insurances. However, by next year you may have a house or other new assets. You will need to update your wills and trusts to fit these assets in. 

At the same time, if you just got married or have kids, it will be great to include them as well. As you include them in your wills and trusts, don’t forget to list out how much each of these beneficiaries will get. 

For example: 

You can include such distribution in your wills and trusts. In the event you passed away unexpectedly, your named beneficiaries in your wills and trusts can get the assets you have left behind. 

If you did not leave behind a will and trust, your assets will be distributed according to Malaysia’s Distribution Act. You may not agree to what the Distribution Act of Malaysia says but it’ll be too late by then. Always have an updated will and trust ready. 

d.      Appoint a trustee 

A trustee is someone who holds your money and assets for the benefit of intended beneficiaries named in your Trust Deed or Will. A trustee may not necessarily be the executor of your Will. You will need to have a trustee legally appointed at the courts before they can start helping you to distribute your assets. If they are not validly recognized, then they will have zero power in helping you to distribute your assets. 

An  executor – on the other hand – will be put in place to do the job instead. However, an executor’s job is more extensive than a trustee’s. An executor will have to locate all assets listed and not listed in your will. After that, the executor will need to find out if you have any outstanding debts. If you have debts, the executor will use your assets’ monies to pay it off before distributing the assets – in accordance to the Distribution Act of Malaysia. 

What happens after that? 

After everything is in order – after your wills and trusts have been updated and a trustee appointed, it’s time to move on to the next step. After you have passed away, your wills and trusts will be taken to court to be distributed to your next of kin. Your appointed trustee will see to it that it is distributed as per what you have listed in your wills and trusts. 

If you have any outstanding debts and assets that are not listed, an executor will be appointed to locate and settle those. Don’t be surprised to find out an executor is appointed to work alongside your trustee. It’s a common occurrence. 

The importance of having a Grant of Probate (GOP) / Letter of Administration (LOA) 

A Grant of Probate (GOP) and a Letter of Administration (LOA) are legal documents that tells the relative and relevant institutions that the owners of the associated accounts have passed away. In the very same documents, it requests for the institutions to release the assets to the deceased’s next-of-kin. 

However, there are some differences between the 2 documents: 

Bottom Line 

Though it does seem like there are a lot of things to do, the outcome would be worth it in the end. Just remember to have a will and trust in place – updated and all – before you’ve passed away. Always ensure smooth sailing for your next-of-kin and your beneficiaries should anything happen to you in the future. 

If you need any help with will writing and preparing a trust, feel free to reach out to us for further assistance. We are more than happy to assist you in your wills and trusts. 

Let us outline how proceedings impact your property ownership in Malaysia. It’s not entirely so complicated and you’ll catch on pretty quick too. 

HAVING YOUR DOCUMENTS IN ORDER FIRST 

The first thing to look at when it comes to impact of property ownership is the documents you have at hand. Here are some of the documents you will need to have – preferably all. These will be the documents that are prudent to have to be submitted to the Malaysian High Court. 

Latest will. The first thing you should do is to locate the latest will that is legally recognized by the Malaysian government. You may have it validated by a certified lawyer. In the will, you may include all your properties and assets listed in it. Hopefully, you have everything listed already by the time of your passing. 

Supporting documents. Supporting documents usually refer to documents such as deeds, property certificates of ownership, and similar. These documents, for obvious reasons, state that you are the true owner of the properties or assets. It may also indicate that you own part of the property or asset (like a certain percentage or share of the property/asset in question). 

Grant of Probate (GOP). When the owner has passed away and has his documents in order, then things would have been a lot easier. The Grant of Probate (GOP) is a legal document issued by the Malaysian High Court for an executor to carry out the distribution of the deceased’s properties. If there are any debts to be paid, it will also be included in this document too. Also, if there is a letter of administration (LOA) produced previously, it will be annexed with the GOP. 

Letter of Administrations (LOA). The Letter of Administrations (LOA) also functions similar to the GOP. However, the only difference is that it’s for people who has passed away leaving behind no wills. Hence, this document will be produced by the next-of-kin who has interest in getting those properties back for their family members. They will bring it to the Malaysian High Court requesting for a GOP instead. 

What other documents do I need? 

In order to get a Grant of Probate (GOP), you will also need the deceased’s death certificate, original identification cards (or passport if you are a foreigner), beneficiaries’ ICs or passports, land titles or deeds, documentation of all assets and properties, and documentations of all debts and liabilities. In certain scenarios, more documents may be needed so you may need to check with the lawyers from time to time. Each case differs from person to person as no 2 cases are the same. 

Movable and Immovable Assets 

Before we go further, you will also need to know about movable and immovable assets. These will impact your probate proceedings also in Malaysia. 

Movable assets refer to cash that you have. These usually mean your bank accounts and other monetary accounts under your name. 

Immovable assets refer to lands and buildings that you own. If you own any houses, condos, or plots of land, then it will be classified as immovable assets. 

Impact of assets’ monetary worth 

Here’s what will also impact the probate proceeding in Malaysia – the monetary worth of all of your assets combined. The higher your assets are worth, you may need to apply to different departments for the release of your properties to your beneficiaries. 

If your total assets are worth less than RM500k, then you may file your probate under Small Estates (Distribution) Act 1955 (SEDA 1955 for short). The administrator will help you to obtain the LOA at the High Court of Malaysia. 

If your assets are worth more than RM500k but less than RM2mil, you may still file an application for distribution under SEDA. The administration will help you nonetheless. The application can be made at the Estate Distribution Unit of the Department of the Director-General of Lands and Mines. Small estate distribution typically costs less and is quicker than obtaining letters of administration. 

Bottom Line 

Generally, there are no big issues in probate proceedings if you have all documents in order. Once everything has been settled, the beneficiaries can get their share of their assets within a few months. If there are any other complications, then yes the probate process can take longer for several years. 

If you need any assistance with probate proceedings in Malaysia, feel free to reach out to us for further assistance. We will be more than happy to assist you in this matter.

Estate planning may be long-winded and meticulous for some people depending on how many properties and assets you have. The whole process of court proceedings may scare some people as well. It’s understandable some people feel this way but, in reality, it isn’t exactly the most difficult thing to do. Here’s what you can do about estate planning in Malaysia if you are a high net worth. 

Before moving forward, “high net worth” in Malaysia does not mean you have a few hundred grands in your bank accounts and asset/property values. According to Smart Investor, in order to be considered a high net worth individual in Malaysia, you must have rm1 million in monies, assets, and properties in total. It can be for individuals or for joint accounts (eg: spousal). 

Gather all properties and assets you have 

This is the first step in estate planning for you. You may have multiple assets, multiple properties, multiple priceless heirlooms, etc. However, when you have passed away, these things will not straightaway go to the people you want. Or the amount of money you wish to transfer to the person may not be the amount you intended to be. 

Take your time in gathering all of these assets and properties first. List all of them down somewhere first. At the same time, if there are legal documents that comes with the properties and assets, by all means gather them together as well. 

Prepare a will and validate it 

Your next course of action will be to prepare a will and have it validated by a certified lawyer. In the will, include all the assets and properties that you own and have the supporting documents attached. 

I should also mention here that you do not just include your assets and properties in your wills. You can also include what to do with your pets and heirlooms when you are no longer around. People normally divide up who gets what in their wills for their properties and assets. It’s the same thing with your pets and other priceless heirlooms. 

A will also include how much the beneficiaries will get. For example: 

If you do not have the beneficiaries breakdown listed down like that, then the Malaysian High Court will distribute it for you in the way “they see fit”. The Malaysian High Court will distribute your assets according to the Distribution Act 1958. 

Choosing the right trustee 

This is exceedingly important, just as important as having a will in place. Choosing a trustee is important because this person is entrusted in carrying out your last wishes for your properties and assets. A trustee is someone who makes sure that your assets and properties are truly transferred to the beneficiaries’ hands. This individual should be someone who you really trust in carrying out such duties. 

A trustee is not to be confused with an executor. An executor is someone appointed by the Malaysian High Court to gather all your properties and assets and also to locate any debts you have. If you have any debts, the executor will take money from your assets and properties and pay it off. Only then will the executor distribute the assets to your beneficiaries. 

Paying for estate taxes 

For now, in Malaysia, you do not need to pay inheritance taxes or estate taxes. Many years ago, Malaysians will need to pay for inheritance taxes as there was an inheritance tax law implemented in Malaysia. Under the Estate Duty Enactment 1941 and other similar estate duty legislations in Sabah and Sarawak, Malaysians are to pay that estate tax. 

However, that law was repealed on 1st November 1991 and was replaced by the Finance Act 1992. For this very reason, there is no inheritance tax in Malaysia for inheriting your parents’ properties and assets currently. 

Bottom Line 

Estate planning for high-net-worth individuals is not the most complicated thing to do. It may seem long-winded but it’s nothing short of simplicity. You’ll just need to be meticulous with all the assets and properties you have within Malaysia and outside of the country.

Should you need any help with estate planning as a high-net-worth individual in Malaysia, feel free to reach out to us for help. We will be more than happy to help you with it. 

Nonetheless, it does not matter how many years you have those properties. As long as you own multiple assets regardless off the length of time, they are all yours nonetheless. If you own multiple properties and have no idea how to include them in your wills and trusts, then you have come to the right place. 

In this article, we will highlight key points in how to include them in your wills and trusts. Estate planning for people and families with multiple properties are not necessarily the most difficult thing in Malaysia. We will summarize everything into bite size information to make things easier to digest. 

List down all the assets you have first 

This is the easiest thing to start things off with. When you have a lot of assets and properties, you are bound to miss out one or two of your assets. Don’t just list out the assets you have in Malaysia. If you have assets outside of Malaysia, it’s best to list them down as well. 

It does not matter if you only have one asset outside of Malaysia. Just list it down nonetheless. It’s just as important as any other assets that you have within Malaysia as well. 

Assets do not just limit to properties and financial accounts. It can also include cryptocurrencies as well. As cryptocurrencies are everywhere, there are bound to be people who have a piece of it. You may have some so it’s worth including it in this list. 

Talk to a lawyer 

After listing down all the assets that you have within Malaysia and beyond the country, your next step is to reach out to an experienced lawyer. An experienced lawyer will walk you through what else is needed besides the list of properties you have just come up with. 

Usually, you will be asked to produce a legal document stating that the asset is owned by you. This is all for legal purposes and the future of those assets. Those documents can include title deeds, legal letters, etc. 

Creating a will 

The next step will be creating a will. Creating a will is not exactly the most complicated thing in the world. In the will, you can include all the assets you have previously listed out. Don’t forget to have the legal documents stating your ownership included as well. 

In the will, you will list out all the beneficiaries you wish to include. Usually, people will include their family members. Sometimes, some people may include their friends, girlfriends and/or concubines. For some people, they may even include their pets (it’s possible). 

At the same time, you will also state how much each beneficiary will get from your assets. If you only have 3 people named in your will, most people often will go 33.3% for each named beneficiary. 

If there are no beneficiaries named in the will, and you do not have a will, then things will work out differently. If you find yourself in such a situation (usually it’s your family members), then your assets will be distributed as per Distribution Act Malaysia. 

Appoint a Trustee 

Assuming that you do have a will in place and everything listed in it, then you will next appoint a trustee. A trustee is someone who helps distribute the assets listed in your wills to the named beneficiaries. They ensure that everyone gets their fair share of your assets as per listed in your updated will. 

A trustee is not an executor, who is a different person who handles different aspects of your will. However, a trustee will continue to oversee the distribution of your assets for as long as they are around. If there are any conservatorship or guardianship appointed, the trustee will see to it that they carry out their duties. 

An executor may be appointed 

Sometimes, even though you have a trustee appointed, it does not mean that it will end just there. In certain situations, an executor may be appointed to work alongside a trustee. An executor is someone who is appointed to locate more assets under your name – inside and outside of Malaysia. The executor will also ensure that all debts are paid off before the assets are being distributed to the named beneficiaries or next-of-kin. Note that this may take a long time depending on how complex the matter is. 

However, an executor is not like a trustee. An executor is only temporary whereas a trustee is permanent. Once the debt has been paid and all the assets located, everything else will be handed over to the trustee and the beneficiaries. The executor will exit itself thereafter. 

The trustee, on the other hand, will take over the newly found assets (or the remainder, depending on the situation). S/He will then ensure that the remaining assets will be distributed to the beneficiaries in the fairest possible way. 

Consider having a living trust 

We know this sounds like it’s a lot of things to consider for your future – but anything to fortify your future for yourself and the people around you. If in any situation, you find yourself in an accident or illness. You may find yourself incapacitated, which is not the best state to be in for anyone. That means you can no longer carry out your day-to-day tasks and work like usual. You may be bedridden or wheelchair-ridden for the rest of your time. 

If you’ve found yourself in such a situation, fret not. You may consider having a living trust for yourself. A living trust is a legal document stating what will happen to you and your assets when you become incapacitated. In the very same document, you may say who will take care of you, what’s going to happen to you, etc. 

You can have a living trust besides a will. It works and both can run alongside each other and still be valid. You don’t have to worry about whether if you should retract one to let the other one run on its own. 

Bottom Line 

Estate planning for people who have multiple assets and properties in Malaysia (and outside of the country) is not necessarily a complicated thing. Should you need any help with estate planning and will writing, feel free to reach out to us today. We will be more than happy to help you with your wills and trusts

As a matter of fact, charity giving can be a beneficial thing not just for the charity body. It is also beneficial for your estate planning and probate as well. There are various charity bodies in Malaysia you can choose to pledge for a good cause. You just need to find one that you can trust in the long term. 

Tax rebates for charity donation 

If you donate to recognized charity organizations, you are entitled to tax rebates within the country. There are up to a certain percentage of tax rebates you are entitled to when you are filing for your year taxes. The specific amount or percentage of rebates may vary and you may have to check with the relevant departments regarding this matter. 

How much you wish to donate is wholly on your own decisions. People don’t just contribute to charity donations on a personal level. Some people donate on their estate level for the tax rebates too. It all comes down to your own decisions in the end. 

Types of charity donation via estate 

As there are benefits to donating to charity organizations, it is without a doubt both giving and receiving parties can benefit from it. Here are some examples of how charity donation works. 

a.      Charitable giving as part of your will or trust 

This is the most simplest and straightforward way of donating to charities for your estate planning. As it does reap certain tax rebates and benefits, all you need to do is to name a charity organization, foundation, or non-profit organization in your wills or trusts. This type of charity donation are often bequests. 

It can be a general bequest where a monetary gift is paid out of the general estate assets. It can also be a specific bequest where specific monetary amount or items from the estate are given to the charity. Or it can be a demonstrative bequest where monetary amounts from specific parts of the estate be given to the charity. Sometimes, it can also be a residuary bequest where the remainder of the estate are donated to the charity in question. 

b.      Charitable reminder trust 

Charitable reminder trust is also known as split-interest trust. It offers financial benefits for both estates and charities. Charitable interest trusts go into effect when the owner is still alive and around. As soon as the trust is in effect, the owner begins to receive income from the trust up to the point of their death. When the owner and their descendants have passed away, the assets named within the charitable reminder trust will be donated to the charity named in their wills and trusts. 

c.       Donating appreciated stock to charity 

You can also choose to donate appreciated stocks to charity organizations. If you have made any financial gains through the stock market, you can residually donate part of that amount to charities. Or you can donate it in whole when you are no longer around. 

If you choose to sell that particular beneficial charity, you will be liable to pay for capital gain taxes. However, if you donate it to charity, you can avoid having to pay for taxes. Again, you can get a charitable income tax deduction for the full value of the stock at the time of the gift donated. 

Bottom Line 

If you hadn’t know that charity donation entitles you to tax exemption, well then, now you know. You can certainly get tax exemptions from it, but only up to a certain amount or percentage. All you need to do is to include it in your will and trust for such tax exemptions. 

Need help with will writing and trusts? Talk to us today so we can help you with writing your will or trust.

The role of insurance in estate planning is a very straightforward one. In this article, we will summarize and explain the role of insurance in estate planning. 

The Basics 

Here’s the basics on what you should know about insurance in estate planning. There are 3 main roles of insurance policies in your estate planning: 

a.      You named beneficiaries receive death benefits from your insurance 

When you have passed away, the death benefit (a.k.a.: death benefit) gets distributed to your named beneficiaries. Or it will go to your estate if you hadn’t named anyone at the point of your death. 

b.      It provides liquidity that is helpful for your estate 

It provides easy access to cash from your life insurance upon your death. If your estate is in need for money, then this is where life insurance can be useful. Sometimes, you may not need to have passed away in order to access cash from your insurance policy. You still can access cash from your life insurance policy when you are still around. Of course it would also depend on the kind of insurance policy you have too. 

c.       Financial support for your loved ones 

This is provided your loved ones are named beneficiaries of your insurance policy and/or your estate. It wouldn’t make sense if some strangers on the streets benefit off your insurance policy, would it? As long as your loved ones are named beneficiaries, they will benefit off your insurance policy tied to you. 

Are insurance payouts in Malaysia tax-free? 

This is a valid question if you are asking it. The short answer is no. 

Death benefits from all kinds of life insurances are income tax-free. That simply means upon its payout, the beneficiaries will not need to pay any taxes to the Inland Revenue Board IRB / LHDN. Whatever payout you get, you will get all 100% of it.

Let’s say the insurance policy’s death benefit is RM150,000, the beneficiaries will get the entire amount. Of course it will be distributed according to what the policy holder has set within the insurance policy’s distribution. If there are no beneficiaries named, then the distribution of the death benefit will follow the Distribution Act of Malaysia. 

Income replacement and access to cash 

Many people think that insurance is a get-rich-quick scheme for beneficiaries. That is not entirely true if you have certain basic knowledge of insurance and how money and finance works. 

Considering how if you have debts to pay off and funeral expenses to settle, then the death benefit is not working as a get rich quick scheme. 

For example: 

The above table is a simple example of how payout works upon the death of an insurance policy. That payout distribution between the 2 beneficiaries were just an example of how insurance payouts work. It does not mean that if the death benefit is RM150,000, the 2 beneficiaries will get RM75,000 each. 

There are other expenses the policy holder may still need to settle before having the remainder is evenly distributed to the beneficiaries. If there are no debts from the policy holder, then at the most the money will be used to pay for the funeral expenses. Only then are the remaining death benefits evenly distributed to the beneficiaries. 

Bottom line 

Insurance payouts for your estate planning may not necessarily be the most complicated thing in the world. If you need help with insurance payouts and estate planning, feel free to reach out to us for further assistance. We will be more than happy to help you with it.

While they are not wrong, they often overlooked other factors and possibilities of outliving their pets. You may pass away suddenly from illness, diseases, and accidents. You have no control over the course of your future when it comes to illness and accidents. Hence, there are possibilities that you may not outlive your pets, however chances may be low. 

If you want to plan for your pets’ future, you may consider these plans. 

1.      Get a secondary caregiver 

In the event that you are no longer around to take care of your pet, find someone to whom you can entrust your pet. That someone can be a family member, a relative, or even a close friend. Get someone who doesn’t just like pets and is familiar with your furry friend, and find someone preferably your pet is familiar with. 

These family members, relatives, or close friends can permanently adopt your pet in the long term until the end of their lifetime. Even when you are no longer around, your pet will have someone to take care of them properly. 

At the same time, if you are away for long periods of time, your appointed pet caregiver can also take over and take care of your pet for you. 

2.      Choose a permanent home for your pets 

Just in case if you don’t have family members or close friends looking after your pets after you’ve died, you may choose a permanent home elsewhere. Find a suitable pet home for your pets. You will have to see if your pet likes the place enough to want to “retire” there for the rest of its last days. 

Ideally, it will be best to leave your favorite pet with someone you can really trust to take care of your pets. However, not everyone is ready to take care of pets as they may not want to commit. For that very same reason, you may want to find a permanent pet home to leave your pets after you have passed away. 

3.      Create pets in your will 

You may list your pet as a beneficiary in your will. This is not a joke, it’s for real. You may list your furry friends in your will detailing what they will get and what will happen to them after you have passed away. Essentially it works as a regular will for your family members and friends, but just for your pets, that’s all. 

You will not need to list temporary caregivers in your will. The temporary caregivers, however, will need to step in before anyone has executed the will. You will certainly need to list the permanent adopter of your pets in your will along with any additional provisions you have come up with, 

After you have created a will and include your pets in it, assign an executor. Assign an executor who ensures that all your instructions are followed. They will need to act in your best interest and the interest of your pets. You may also set aside funds to take care of your pets. 

If you cannot find a permanent caretaker for your pets, you may rehome them in animal homes. If you are doing this, you will need to set aside some funds from your estate to cover these costs. You may grant your executor the authority to make decisions for your pets too. 

4.      Create trust for your pets 

Trusts function differently from a will. It can go into effect immediately and it provides care for your pet as soon as you cannot provide that care. It also applies when you have become too sick to care for your pets. 

You may set aside money in your trust to care for your pets too. Like a regular trust, you can assign a specific trustee who takes control of the trust when you have passed away or have become too ill to take care of them. 

The money set aside in your trust will only be assigned to be used on your pets, specifically just your pets. Those funds are spent only by the trustee with your permission and only for the care of your pets. If you are creating a trust for your pets, make sure that the trustee is either the permanent caregiver you have appointed or the emergency caregiver if you need to find a new home for your pet. 

Bottom Line 

Most Malaysians may not have thought of including their pets in their wills or trusts. They’d thought it is just for their relatives and family members. However, that is not the case. You may include your pets in your wills and trusts too in Malaysia. Just make sure you have everything in order before you passed away before your pets do. 

If you need any help with will writing, feel free to contact us for further assistance. We are more than happy to help you with your pets and your wills and trusts