In most cases, you do need a Will; and will drafting is not as easy as downloading a template from the internet – there are many intricacies in estate planning, involving considerations of legislations and various tax issues. Consulting a professional who is well versed in the art of will drafting and the laws of inheritance and succession will protect your legacy and ensure that your loved ones are taken care of after your death.
DO YOU NEED A WILL?
A usually morbid but practical topic – many often quietly ponder whether it is necessary to have a Will, and when is the right time to get a Will. If you are single, have no assets (money or property), and no dependents, it is unlikely that you need a Will, yet. However, if you have a positive net worth (some accumulation of assets, regardless of value), have some treasured worldly possessions (such as CDs, books, or even clothes you wish to donate) or you are married, have children or dependents – it is important to have a Will or a trust in place.
A Will is a legal document that sets out your wishes regarding the distribution of your belongings, ensures the smooth legal transition of any businesses or assets, and the care of any minor children or dependents. It is not just for the rich and wealthy. Regardless of how much or how little money you have, having a well-drafted Will ensures that all your wishes are heard.
In Malaysia, Muslims and non-Muslims are governed by different sets of laws. Estates of deceased Muslims are governed by Syariah laws, while estates of deceased non-Muslims are governed by Will’s Act 1959, Distribution Act 1958 (for non-Muslims in Peninsular Malaysia and Sarawak) or Intestate Succession Ordinance 1968 (for non-Muslims in Sabah only). Should there be an unlikely event where you die without a Will, your death will be classified as “intestate”, which means there is no instruction on how or to whom your estate (i.e. assets owned) will be distributed.
DISTRIBUTION OF ESTATE FOR THE INTESTATE
Technically, if you die intestate, you do indirectly have a written Will (as prescribed by the Government) – however, the exact manner in which your estate is distributed may not be to your liking. Your estate will first be used to reimburse funeral expenses and pay off outstanding debts, then, below is how the rest of your estate will be distributed:-
Should you die without any parent, spouse or issue, your estate will go to the following persons in order of priority:-
5.Great granduncle and grandaunts
Should you die without any of the above family members, your estate will go to the Government.
PROCEDURE FOR FAMILY MEMBERS OF THE INTESTATE
As there is no valid Will, your surviving family members will have to apply for:-
(ii)a Distribution Order from the District Land Administrator (for immovable (e.g. lands, properties) assets under RM600,000); or
(iii)a Declaration/Order from Amanah Rakyat Berhad (for movable assets (e.g. cash, shares, unit trust) under RM600,000) only.
This is a lengthy process, particularly to apply for a Letter of Administration. Should there be an outbreak or crisis, which we are currently experiencing due to the pandemic COVID-19, this will affect and prolong the process of transferring legal ownership of assets, delaying the rightful beneficiaries of their entitlement. Hence, to save time and avoid possible family disputes over your assets, it will be practical to have your Will drafted by a professional.
DISTRIBUTION OF ESTATE WITH A WILL
If you have a Will, your executor should be aware of it, and where it is stored – in a safe and accessible place or with your lawyer. Your appointed executor will then just have to obtain a Probate from the High Court to distribute your estate to your desired beneficiaries. This is an easier and simpler process, and especially so if you have a range of assets in various jurisdictions and different classes of beneficiaries.
EPF AND INSURANCE POLICIES
It is also important to note that all of the above does not apply to your Employment Provided Fund (“EPF”) or insurance policies, as the monies will go to whomever you nominate in your respective EPF account and insurance policies. It is also important to regularly review your beneficiary(ies) for your EPF and insurance policies, as the monies from these can turn out to be a significant sum.
HOW OFTEN SHOULD I UPDATE MY WILL, OR IS IT EVEN NECESSARY?
It is advisable to review your Will every 5 years to ensure that your Will still reflects your wishes, or when there are changes to the law or changes in your life such as:-
(i)Having new children/grandchildren;
(ii)Being married (do note that getting married will revoke your existing Will unless it was made in contemplations of the marriage. Otherwise, should you die unexpectedly, you will be deemed to have died intestate);
(iv)Having your beneficiaries die before you; or
(v)Your executor dies or becomes incapable of carrying out their duties under your Will.
Generally, your lawyer will also include a “Residuary Clause” in your Will. This clause acts like a “catch-all” to cater for the unlikely event of you passing away without an updated Will – which covers assets void against the beneficiary(ies), assets void or lapse by the death of the beneficiary(ies) during the lifetime of the testator (i.e. you), assets missed out at the time during the drafting of the Will or acquired subsequently.
It is important for anyone with a positive net value or dependents to have a Will and to consult someone professional with knowledge in estate planning to draft your Will. Especially with the uncertainty that this pandemic is bringing, it is prudent to take this time to organise your affairs.