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Estate Planning & Will In Malaysia – To Ensure Your Minors Future


Estate Planning & Will In Malaysia

Estate planning for families with minor children is especially challenging because the minor children do not have the physical and mental capabilities to take care of themselves without other’s helps. Therefore, extra considerations are needed to ensure that they are properly taken care.

Without proper planning, your children may end up growing up with the relatives you don’t prefer because of their values system, life style and other reasons. Without sufficient money, their guardian and their children may resent them for making them skimp on extras and for sharing their bedrooms, toys and others. There is also a risk that unwanted people entrusted to manage your children’s inheritance. In short, your children could be caught in a life long nightmare, always wondering if their parents really care for them at all.

CASE STUDY

Mr and Mrs Wong were the late thirties couples staying in Subang Jaya. Both of them jointly owned a plastic manufacturing company in Shah Alam Industrial Area. They have two sons and one daughter age at 8, 5 and 3. Due to the business needs, Mr and Mrs Wong traveled to China very frequently. The children were taken care of by their Indonesian maid, Yati when they were not away.

On one of the trips to China, the plane crashed in the air of China Mainland. Both Mr and Mrs Wong died instantly, leaving behind the three children. Without the presence of Mr and Mrs Wong, the business failed. Business liabilities under Mr and Mrs Wong’s personal guarantee wiped up the liquidity left in their estate. With no proper provision of fund for children, none of the brothers and sisters of Mr and Mrs Wong can afford to take care of all the three children. Each family can only afford to be the guardian for one of the children each. In fact, it takes quite a numbers of family meetings before they could agree on who to accept the responsibility.

At the end, the three children were separated not only in different families, but also in different part of the country. The eldest was in Melaka, the second was in Alor Setar and the youngest was in Kota Kinabalu. As much as Mr and Mrs Wong love and care for their children’s future, their children end up with different growing environments, subject to different future awaiting them. In the mind of the children, they were definitely wondering about how much the parents love them.

 

SOLUTIONS

  1. Choosing a Guardian for your children

If your spouse survives you, you can expect your spouse will automatically become your children’s guardian. However provision still need to be made for the situation of both die together. If you are a single parent or a widow, the need for appointing a guardian for your children is even urgent and obvious.

The guardian is an important person to your children in your absence. He or she makes all the major and minor decision you would have made in raising the children. To appoint a guardian, you name the person you want to be the guardian of your children in your Will. If you do not appoint a guardian in your Will, anyone who is interested can apply for the position. The court then must decide, without the benefit of your opinion, the most suitable person to raise your children.

  1. Appointing a trustee for your children’s inheritance

It is important to appoint a trustee to oversee your children’s inheritance in your absence. You can use your Will to name a trustee who will handle money or property your children inherit until the children reach the age you specify. If your children are already over this age at your death, the trust never comes into being; the property will go straight to the beneficiary.

The trustee must act in the best interests of your children and follow your written instructions. Generally, the trustee can use the trust money for your children’s health, education and living expenses. When the children reach the age you specified in the Will, the trustee ends the trust and transfer the balance in the trust to your children.

  1. Factor special needs into your financial needs analysis

If you have minor children or children with a disability that require extra support, make sure your estate have sufficient liquidity to pay for the bills. Find out how much is really required. There is nothing worse for your children than living in an environment where they are resented everyday, because they have added the financial and physical burden on their Guardian’s family. It is important to make sure that you have provided sufficiently for their living expenses, education (primary, secondary and tertiary), tuition, hobbies, medical expenses. If your child has special needs that make it more challenging for the guardian to take care of the child, there must be more than enough money to cater for those needs.

  1. Distributing your children’s inheritance at the right time

In Malaysia, a minor child is legally capable of holding property upon attaining the age of 18. According to most of my clients, it may be premature for their children to handle their assets at such young age. Unless there is some special reasons, it is encouraged to leave the fund in the trust. You can have the choice of releasing the fund at later age – for example at 25 or releasing the fund in stages – for example, 1/3 at 22 and the remaining balance at 26.

  1. Reviewing estate plan and keep it flexible

Estate planning and will in Malaysia involving minor children is always subject to a lot of changes because the children are growing every day. As they grow into different stages of adolescence, the arrangement in the Will who seemed perfect three years ago might not be the right candidates anymore. Keep your estate plan flexible and review them every year.

If you die prematurely, your children will miss you and think of you every day for the rest of their lives. What you do or do not do, may make or break their future happiness. According to Stephen R. Covey, reactive people make love a feeling but proactive people make love a verb. Love is something you do and the sacrifices you make. Love is a value that is actualised through loving actions. Put your love into actions and start planning for your children.

Estate Planning Will Malaysia

 

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