According to MWD Wills Depository Sdn Bhd, only two million (or about 28%) of the total seven million people that make up the Malaysian working population have a will.
Just like how it is never too early to plan for retirement, it is also never too early to look into writing your will – especially if you have dependents and beneficiaries. When planning your retirement, it could be worth looking into drawing up your will.
Unlike the anxiety around continuing family legacy and providing for future generations, a will does not require extensive discussions and plans. At best, it is a legal safety net that protects assets and gives full control to you to disseminate as you please.
Furthermore, passing on the wealth of a generation does not need to come at the expense of its retirement.
“Caring for yourself (and not the younger generation) would be the most financially responsible thing to do,” advises Felix Neoh of Finwealth Management. However, with any excess should you outlive your wealth, this can be easily passed on with the right estate planning,” he adds.
It is always difficult to stare down the topic of death, and most of us are reluctant to face the morbid subject of our mortality. Samantha Lim of FA Advisory believes there are plenty of benefits and considerations to writing a will.
“If insurance and EPF nomination is important to you, why not your estate?” she questions.
With a proper will, you can articulate all your wishes, which can run the gamut from what you wish to give to each of your loved ones; and whether they are to benefit from the gift immediately or over a period of time.
You can express the apportionment of your assets to each of them – whether as a measure or endorsement of your love for each of them, or a reflection of your intention to cater to their special needs or nurture their nascent talents, adds Lim.
According to Lim, other benefits of having a will and trust includes, but is not limited to:
- Being clear about who will get your assets, and you can work out the details down to who gets what and how much
- Keeping your assets out of the hands of people you do not want to have them (like an estranged relative)
- Setting up a monthly maintenance allowance for children with special needs or an aged spouse who are not capable or no longer fit to handle their own financials – by setting up a trust
- Setting conditions such as to leave the house or property unsold until the passing of spouse or children
- Your heirs having a faster or easier time getting access to your assets
- Transferring of immovable assets (real property, land) to beneficiaries by way of the will, which only costs RM10 stamping for each property, saving thousands on stamp duty as compared to not having a will
- The Declaration of Trust to handover businesses can be done in the safest and fastest way. Imagine when you are no longer around and creditors start to demand for payment. On the other hand, banks will be concerned if the key shareholder has no proper succession planning, which may affect business operation and growth. They may eventually want to review their existing lending to the business. All this may be a disaster to the business’ cashflow if credit facilities were to clawback or reduce, especially if business risk is exposed to this.
Note: A will facilitates distribution of estate only upon death, while a trust, on the other hand, ensures access of funds without waiting for probate and can be effective immediately.
“We should start to think about estate planning when we start owning an asset of value like property or investment, have someone financially dependent on us like a spouse, children and ageing parents,” advises Jessie Ooi, Senior Estate Planner of Rockwills.
She also notes that when there are significant changes like marriage, birth, death, divorce or when there will be major changes to your financial situation, the Will needs to be reviewed.
“A divorce will not revoke the existing will. So if one passes on after divorce without re-writing the will, the ex-spouse can also inherit your assets according to the will.”
“Not all assets grow at the same pace, sometimes you might need to review and re-allocate the asset among the beneficiaries. If you want fairness in the estate distribution among the beneficiaries, you need to regularly review your estate plan,” adds Ooi.
What Happens If I Die Without A Will?
Lim informs that there are contingency plans set in place for Malaysians that do not have a will drawn up to ensure a legal safety net for their assets as below:
- Assets will be distributed according to the formulas set out in the Distribution Act 1958, and not according to your wishes or the needs of family members;
- The court will appoint a trustee and executor to administer the estate, and this may give rise to disputes between family members or beneficiaries on who should be appointed; and,
- The distribution process will take longer and cost more, ordinarily requiring a bond and the appointment of two sureties to guarantee the proper administration of the estate, as well as further court orders to effect the transfer of real property.