Financial planning is the backbone of your wealth cycle − from protection to creation to accumulation to diversification and finally wealth distribution.  However, wealth distribution requires specialised Estate Planning advice to ensure that your wealth can be passed to your loved ones according to your wishes. The way to achieve this is to use the Estate Planning tools such as a Will, Trust or Foundation or a combination of these.

Enforcing Your Decision

Without a Will, your assets will be distributed according to the Distribution Act 1985 which has rigidly fixed the recognised beneficiaries and percentage for distribution. The Act states that your surviving parents, spouse and children have the first right to inherit. From this, we can see how the law presumes that the priority to inherit your assets is your immediate family members. However, this may not be the case in reality as other deserving or preferred beneficiaries may not be able to receive your assets without proper distribution planning made. There are parents who have issues with their children, adopted children, special needs children and spouses who are separated but not divorced. And there may be friends who are like family. Hence writing a Will is to put down exactly how and who you want to receive your assets.

Most Malaysians have little knowledge of this and are not aware of the many pitfalls when the instructions on how to distribute after death are not properly planned, ending in dispute among family members or causing unnecessary hardship to the surviving family members.

In most cases, lack of proper consideration on appointment of an executor due to underestimating the complexities of the estate administration process including clearing the debts and income tax, could lead to frustration and unnecessary delays in assets distribution to the beneficiaries.

A Will is a Responsible Act

Writing a Will is a responsible act which requires careful planning and consultation such as taking into consideration of the possible outcomes of instructions and protecting your loved ones.

For example, people often leave instructions to give away everything to their children in equal share. But in the case of a house, such instructions could later cause dispute among the beneficiaries if some wish to sell while others do not.

Giving too much too early is also another common mistake due to lack of planning. Say, for instance, a father writes a Will and gives his house to his son while his wife is still alive. This may cause insecurity on the part of the mother because his son could sell off the house if he wants to and deprive his mother of a home she is comfortable with.

Lack of a control mechanism on the distribution instructions of your assets would mean lump sum distribution of a large amount of money perhaps to spendthrift beneficiaries and end up wasting away what you worked hard to build. It is easy to picture what would happen to a 20-year-old child, who does not have the maturity to manage his spending, inheriting outright assets worth millions. This can be overcome by understanding their inclinations, then setting conditions for distribution. For instance, staggering the distribution to the beneficiaries over a period of time.

Remote Control from Heaven

With proper planning, a Will can be deemed a remote control from heaven where you can set conditions to inherit and space out the payments of the inheritance to preserve your estate to achieve your estate planning objectives.

A Will also serves an important function for you to appoint guardians to take care of your minor children’s wellbeing.

While planning for a Will, there are other important aspects that should not be ignored, such as debt cancellation, availability of liquid funds for upkeep of the family, continuation of the family business, estate preservation and an orderly administration of the estate. Without such careful planning, surviving spouse or single parents would have to shoulder the burden of maintaining and supporting the whole family alone, the family may run out of liquid funds to meet immediate needs such as school fees and health care, children may receive their inheritance prematurely and squander them and families shouldering the debts left behind in order to prevent the mortgaged house from being forcefully sold by banks, leaving the family homeless.

In addition, nowadays most people also own digital assets which can be worth a lot of money or are of great sentimental value. Digital assets can also be included when planning one’s will.

By engaging a Rockwills Estate Planner, you can be assured of the best practical solutions taking into consideration the practicality of your instructions, concerns and relationships between the beneficiaries. Depending on your circumstances, we could discuss further estate planning solutions such as setting up a trust to achieve your objectives.

Established in 1995 and supported by more than 30 legal advisors with more than 100 years of accumulative experience in estate planning, Rockwills is the specialist in providing comprehensive Will Writing, Will Custody & Trust services. We are one of the largest estate planning groups regionally, having written more than 220,000 Wills, 9,000 Trusts and holding over RM28 billion assets under Trust.

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