Do you know that more than 80% of Malaysians do not have a valid will?
In 2025, some RM65 billion, in cash and real estate, remain unclaimed due to poor estate planning.
Understandably, most in the sandwich generation – families with parents and children – prioritise on wealth accumulation. They include career or business progression and investments. Will writing, on the other hand, is often viewed as a cost that can be delayed at another time. It goes to the bottom of our list of financial priorities and that’s normal.
Now, despite a lack of urgency, there is no better time to secure our families’ financial future with an estate plan than today. This begins with having a valid will written. Here, I’ll list down 5 key pointers for young families to get started with will writing in Malaysia:
Point 1 – What’s a Will Document and Why?
Imagine a person passes away, leaving behind financial assets (estates) and family (beneficiaries).
Sure, even without a will, the person’s beneficiaries could inherit his or her estates. But the question is – Who gets what and how much of it and when? Since he or she passes away without stating his or her wishes in a valid will document, nobody knows. So, the government steps in and decides on how the estates should be distributed based on the Distribution Act 1958. There is ambiguity and it often leads to days, months and years of unnecessary squabbles and tensions.
Trust me – none of us would want to go through that.
So, with a will, there is greater clarity on who gets what and what percentage. Disputes lessened and the transfer of assets to your beneficiaries could be expedited according to your wishes with greater efficiency at lower cost.
Point 2 – What Financial Assets are Involved?
Once a person passes away, his or her real estate, bank accounts, stock brokerage accounts and even crypto-wallets shall be frozen. The only exceptions are his EPF and life insurance policies.
A valid will is needed to be presented to the High Court to obtain the Grant of Probate (GP). With the GP, these estates can be “unlocked” and be used to pay off his or her outstanding debts and taxes. It’s only upon clearance of debt and taxes that the balance shall be distributed to beneficiaries.
Without a will, your beneficiary shall apply for the Letter of Administration (LOA). This would take a longer time and could be costlier for the beneficiaries (subject to the person’s financial wealth).
So, here’s a quiz:
A husband owns a house jointly with his wife. Will his wife automatically inherit the husband’s portion of the house if he passes away?
If your answer is yes, think again.
The answer is only a yes if the husband has no surviving parent or child.
But, if his parents are alive and has children (with the current wife or from a previous marriage), it’s definitely a no – unless he bequeaths his portion of the house to his current wife in his will. If not, his ownership of the house would be shared with his parents, wife and children.
Hence, if you assume inheritance is automatic, it’s best to think again. That is why a will document is crucial to our estate planning.
Point 3 – The Will’s Executor
From above, I’d touched on the tasks such as:
- Presenting a valid will to the High Court.
- Obtaining GP from the High Court
- Retrieving estates from the deceased
- Settlement of outstanding taxes with LHDN
- Settlement of outstanding debts with all creditors
- Distribution of remaining estates to all beneficiaries
Who shall be responsible for doing the above?
That is where we can appoint an executor to execute the above on behalf of our beneficiaries.
The executor can be a beneficiary in our will documents. After all, a beneficiary has a vested interest in the estate.
But, the question is – “Is a beneficiary always the best person to execute our will documents?” This is subject to debate. It is because most people would underappreciate the job scope in executing a will. It can be a lengthy, thankless role which carries legal responsibilities. So typically, we could choose a trust corporation to act as an executor in our will documents.
It is more efficient as a trust corporation has manpower, experience and expertise to carry out these duties. But, of course, there are charges for its services.
Point 4 – The Guardian of Your Children
Let’s assume you are a parent and you wish to leave behind RM1 million to your child.
The RM1 million is meant for his living and education expenses.
Your intention is noble. But, the question is – “Can your child receive this money as he or she is still a minor?”. Obviously, the answer is nope. So, an adult known as the guardian would collect this sum of money on behalf of your child.
Immediately, you may think – “Yup, definitely that guardian would be my husband or wife.”
That’s understandable. But, here’s a scenario. What if you and your spouse go on a holiday but never return from it? If that’s the case, who shall be the child’s guardian?
Could it be your parents, your spouse’s parents, your siblings, your spouse’s siblings … etc?
Who knows?
That is why we appoint a substitute guardian in our will to counter this unfortunate event.
Point 5 – Don’t Write It Yourself
At this stage, just know that estate planning is a technical subject – requiring multiple expertise such as legal, finance, real estate, … etc.
So, especially if you have 6-figures in net worth, it’s better to engage a lawyer or an estate planner to write a valid will.
The cost of writing a will is not much – depending on the complexity of financial and marital status.
But still, it is worth it.
What is important to know is that your will is valid, enforceable and aligned with your intentions.
To obtain the most suitable assistance, you may contact any of the following below:
1. Sim & Rahman
2. Nathalie Annette Kee – Thomas Philip (Principal Associate)
3. Financial Planner: Stephen Yong, Wealth Vantage Advisory
