Wills in Malaysia

Post 212 of 217

by Raymond Mah & Gan Chong Chieh

MahWengKwai & Associates offers you a personalised will writing service. Our lawyers will answer your questions, advise you and help you to write your will to suit your circumstances and your wishes. If you so require, you may also deposit your original will with us for safe-keeping.

For your benefit, we have set out below our answers to some frequently asked questions regarding wills for non-Muslims in peninsular Malaysia. We hope you find the information helpful.

1. What is a will?

In simple terms, a will is a document which contains a person’s intentions on the distribution of his or her assets at death.

Section 2 of the Wills Act 1959 defines a will in technical terms as “a declaration intended to have legal effect of the intentions of a testator with respect to his property or other matters which he desires to be carried into effect after his death and includes a testament, a codicil and an appointment by will or by writing in the nature of a will in exercise of a power and also a disposition by will or testament of the guardianship, custody and tuition of any child.”

2. What are the advantages of having a will?

Having a will enables you to:

  • Choose your beneficiaries and how your assets are to be distributed;
  • Choose your trustee and executor to administer your estate;
  • Set up a testamentary trust for your minor children, heirs with special needs or charities;
  • Choose the guardian of your minor children;
  • Minimise the chances of family disputes over property;
  • Speed up the distribution process considerably;
  • Reduce the costs of administering your estate;
  • Express your wishes for your funeral arrangements.

3. What happens if I die without a will?

If you die intestate:

  • Your 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 your family members;
  • The court will appoint a trustee and executor to administer your estate, and this may give rise to disputes between family members or beneficiaries on who should be appointed;
  • The court will appoint a guardian for your minor children, and the person appointed may not be your preference;
  • The distribution process will take longer and cost more, ordinarily requiring a bond and the appointment of 2 sureties to guarantee the proper administration of the estate, as well as further court orders to effect the transfer of real property.

4. Who will inherit my assets under the Distribution Act 1958?

Section 6 of the Distribution Act 1958 sets out various scenarios for intestacy and provides a fixed formula for the distribution of the person’s assets. The following are some examples:

  • Leaving a spouse, issue and parents:  spouse ¼  issue ½  parents ¼
  • Leaving a spouse and parents but no issue:  spouse ½  parents ½
  • Leaving a spouse and issue but no parents:  spouse ⅓  issue ⅔
  • Leaving issue and parents but no spouse:  issue ⅔  parents ⅓
  • Leaving no spouse, issue or parents, then the following persons are entitled in accordance of priority: brothers and sisters; grandparents; uncles and aunts; great grandparents; great uncles and aunts; government.

5. What makes a will valid?

To make a valid will, you must:

  • Be at least 18 years old;
  • Be of sound mind;
  • Have your will in writing;
  • Have signed your will;
  • Have your signing witnessed by at least 2 witnesses who will then sign in your presence and in the presence of each other.

6. Can my beneficiary witness my will?

No, a beneficiary will not be eligible to receive any benefit from the estate if he/she or his/her spouse signs as a witness to the will.

7. How long will my will be valid for?

Once executed, your will is valid until it is replaced by a new will, revoked in writing or destroyed intentionally. You will automatically be revoked if you marry or remarry, or convert to Islam.

8. How does marriage or divorce affect my will?

Your will is automatically revoked upon your marriage or remarriage. An exception is where your will expressly provides for an expected marriage in a ‘contemplation of marriage’ clause.

A divorce does not affect the validity of a will. A new will is necessary in such circumstances.

9. What is the role of my executor and trustee?

The role of your executor is to ensure that your wishes in your will are fulfilled.  This will involve your executor (1) locating your will, (2) applying to court for a grant of probate, (3) calling in your assets, (4) paying off your liabilities, (5) distributing your assets according to your will, and (6) preparing a statement of account.

When your executor takes charge of your assets, he will also take the role of a trustee holding your assets on trust for your beneficiaries until the assets are fully distributed. Your trustee will be subject to the responsibilities imposed by the Trustee Act 1949.

10 Who can I appoint as my executor or trustee?

You can appoint any adult (18 years or older) to act as your executor and trustee. You can appoint between 1 to 4 executors to jointly administer your estate. You may also name persons to step into the shoes of your appointed executor(s) in the event any of them predecease you or renounce their executorship.

Alternatively, you can appoint a trust company to act as your executor and trustee. The decision on whether to appoint a friend or relative or a trust company will depend on the size and nature of your estate as well as the complexity of your will and testamentary trust.  Your friend or relative may not have the necessary education or experience to properly administer the estate. Alternatively, you may feel that your friend or relative may not be sufficiently trustworthy or impartial to your wishes. In such circumstances, may wish to consider appointing a trust company to act as your executor and trustee.

11. Can I appoint a beneficiary as my executor?

Yes, your executor may also be a beneficiary to your estate. In fact, if you are leaving everything to your spouse or adult children who are capable of managing their finances, it is a natural choice to appoint your spouse or one or more of your children as your executor(s).

12. Should I inform the person I want to be my executor?

You are encouraged to inform and obtain the consent of the person who you want to be your executor and trustee. There is little point in appointing someone who will renounce executorship later.

13. Where should I keep my will?

You should keep your original will in a safe place. You may also engage the services of a will depository to secure your will. However, it is important that your executor knows where to find and retrieve your original will.

14. Should I give copies of my will to my executors?

It is entirely up to you whether you want to disclose the contents of your will or to give a copy of your will to your executors or even your beneficiaries. Even if you choose not to give a copy of your will to your executors, they should know where to find and retrieve your original will at the necessary time.

15. What will happen if my original will cannot be located?

As a general rule, the courts will require your original will before allowing a grant of probate. However, a copy of your will can be accepted if it can be proven that the original will was lost or destroyed without your intention to revoke the will.

16. Is my executor entitled to payment from the estate?

Your executor and trustee is entitled to deduct from your estate expenses reasonably incurred in administering your estate, including legal fees incurred. Trust companies will typically charge a fee for acting as executor and trustee. Even a friend or relative is entitled to charge a reasonable fee for their time spent in administering the estate.

17. What assets should my will cover?

Ideally, your will should deal with all your assets, whether specifically or collectively. You may consider the following:

  • Real property: land and buildings, residential, commercial, industrial or agricultural properties;
  • Personal property: cash, bank balances, shares, transferrable memberships, vehicles, movable furniture, clothing, jewellery, books, camera equipment, computer equipment, etc.;
  • Intellectual property: copyrights, patents, designs;
  • Trust property: property which is being held by a trustee on trust for your benefit;
  • Future benefits: assets which you expect to receive in the future, including an inheritance.

18. Do I have to list all my assets in my will?

You are not required to specifically list all your assets in your will; it is sufficient to refer to your assets generally, e.g. “all my real property” or “all my bank accounts”.  However, it is advisable to state the particulars of all your existing properties as this will make it much easier for your executor to identify and call in your assets.

19. What happens if I have left out certain assets or acquire assets after making my will?

Your will should include a residuary clause which deals with the distribution of all your assets which are not specifically covered by any other clause in your will. If you want to specifically deal with a new acquisition in your will, you will either have to execute a new will or a codicil.

20. Can my will deal with my insurance policies or EPF money?

Benefits under any insurance policy will be paid to the persons nominated by you under the policy. Your will cannot override nominations under the insurance policy.

Payments from your Employees Provident Fund (EPF) will also be made in accordance with your nominations registered with EPF. However in circumstances where EPF has no record of your nominations, your EPF contributions will be paid in accordance with your will.

21. Can my will include foreign property?

Yes, your will can include with both assets within Malaysia and abroad. In order to enforce your will overseas, your executor may need to re-seal the grant of probate in a court of the foreign jurisdiction.

However, it is better to obtain specific legal advice for foreign real property because the law governing the willing of real property vary from country to country.  In certain circumstances, it may be advisable to write another will dealing specifically with your foreign property.

22. If my will is made and proved overseas, can it be enforced in Malaysia?

Generally, yes. Your executor may apply to the High Court to re-seal the grant of probate in Malaysia. Thereafter, your executor may deal with and distribute your assets in Malaysia according to your will.

23. Do I need to appoint a guardian in my will?

You should specify the appointment of a guardian in your will if you have children below 18 years. The appointment of a guardian is necessary if both parents die when their children are under 18 years.

24. What is a testamentary trust?

A testamentary trust is a trust that is specified by a person in his will. It is a trust which only comes into effect upon the death of that person. The most common usage of a testamentary trust are as follows:

  • To hold residential property so that dependents can live in the house until they are financial independent or until their death. This is to prevent the property from being sold prematurely. The property can be sold and proceeds given to the beneficiaries when the trust ends.
  • Instead of giving a lump sum to beneficiaries, a testamentary trust can be used to give them a monthly allowance over a period of time. This can be used where beneficiaries are too immature to responsibly handle a lump sum benefit.
  • A testamentary trust can be used to motivate a beneficiary with payments being made upon the condition that the beneficiary achieves certain goals, e.g. obtaining a university degree.
  • Leaving assets to children will have the effect of impliedly creating a testamentary trust where your trustee will hold the assets on trust until each child attains the age of majority.

25. How does a testamentary trust differ from a living trust?

A “living trust” (also called an “inter vivos” trust) takes effect upon creation whereas a testamentary trust only takes effect at death. A living trust does not have to go through the probate court. However, the stamp duty involved in transferring real property to a living trust (at 3%) his higher than transferring it to a testamentary trust (at RM10).

26. On what grounds can my will be challenged?

A will may be contested on the grounds that the contents have been altered, that your signature is forged, or that the execution was not properly witnessed. It may also be alleged that you were of unsound mind or under undue influence at the time you made your will.

Ambiguity or important omissions in your will encourages dispute. If your intention is to exclude your spouse or any one of your children from your will, it is advisable to do so expressly. Giving a justifiable reason for the exclusion will reduce the chances of a successful contest.

If you are making your will under circumstances where the soundness of your mind may later be called into question, it is advisable to have your doctor examine you and certify that you still of sound mind. If there is a challenge, your doctor may be required to testify accordingly.

27. Can the courts override my will?

The courts have the power under the Inheritance (Family Provision) Act 1971 to make reasonable provisions for (1) your spouse, (2) a daughter who has not been married, (3) an infant son, or (4) a child who is incapable of maintaining him or herself due to some mental or physical disability, provided that in the court’s opinion your estate does not make reasonable provision for the maintenance of that dependant. When deciding such an application, the court will have regard to all circumstances including size of the estate, the interest of the named beneficiaries, the assets and income of the dependant and the conduct of the dependant to the deceased.

28. Does my will need to be stamped?

No, your will does not need to be stamped to be effective.

29. Will my estate be subject to estate duty?

No. The estate of any person who dies on or after 1 November 1991 will not be subject to any estate duty in Malaysia.

30. Should I rewrite my will?

The decision whether to rewrite your will depends on the change in your circumstances and whether such change is adequately provided for in your will. You may consider rewriting your will in any of the following circumstances:

  • Marriage, separation, divorce or remarriage;
  • Birth or adoption of a child;
  • Death of a family member or other beneficiary of your estate;
  • When you want to change your beneficiaries or the proportion of distribution;
  • When your appointed executor, trustee or guardian dies or is unable to act as such;
  • When you decide to name someone else as your executor, trustee or guardian;
  • When the size of your estate changes significantly;
  • When there are changes probate or tax laws that could affect your estate.

Please contact us if you have any further questions, or if you would like to write your will.

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