Estate Administration

There are many matters to be settled by your executor before distribution. This include :

• collecting all immovable and movable assets [including bank accounts, vehicles, shares in companies, unit trusts, house etc];
• settling the debts of the deceased [including income tax and loans];
• applying for grant of probate and submission of the relevant documents to the High Court;
• dealing with government authorities and financial institutions.

Understandably, you may want to appoint someone close to you as the executor. Selecting an individual to manage your estate may do more harm than good, apart from the risk of loss from misuse or mismanagement. The executor will be required to deal with various tedious and time consuming legal matters beginning with the application for probate, attending court hearings, preparing reports, etc. until the distribution according to the instructions in the will. The process can get very complicated. And, can you trust this person with everything you have and will he/she be always there for your beneficiaries?

As a trustee company, Rockwills Trustee Berhad have the experience, the expertise, the impartiality and the checks and balances that will make the estate distribution a smooth process for your loved ones. Why?

• Legal Knowledge of various legal issues
• Professionalism, Expertise and Experience
• Perpetuity and Continuity in administering the estate
• Time to manage and administer the entire estate
• Impartiality and Security
• Trustworthiness and Accountability
• Professional management skills
• Professional indemnity

Estate Administration

Articles taken from FPAM

It is glad that there is a great deal of awareness on the importance of Wills among Malaysians; however, a sizable number of them think that all their estate planning issues are settled once they have a Will written. This is untrue because writing a Will merely indicates the wishes to be carried out after our lifetime. Who carries out those instructions? And how is it going to be carried out when you are no longer around?

So, what is estate administration? .....
During the estate administration process, the personal representative is responsible for locating and collecting the deceased’s assets, paying off the debts and distributing the assets. The personal representative will be an Executor when there is a valid Will or an Administrator when there is none.

Most people are under the mistaken impression that the deceased’s beneficiaries receive the assets almost immediately upon death or as soon as the probate or letters of administration has been obtained. This is certainly not the case because there is a process to follow.

For example, one thing is to try to locate the bank accounts and life insurance policies the deceased have by writing to financial institutions and insurers. Another issue maybe is to find out what real properties the deceased has or which private limited company he hold shares in. Upon the conclusion of the estate administration, the executor is obliged to prepare a statement of accounts to be given to the beneficiaries.

The estate administration can be an extremely tedious and difficult process. The estate administration process may span years.

Imagine if you have only one executor and he dies before the administration of the estate is
completed, in this case, who will be your executor? The answer is his executor (i.e. the executor of the said deceased executor) will also be your executor, who could possibly a total stranger! Therefore, consider appointing a trust corporation to eliminate this uncertainty.

Joint Tenancy

When a husband passed away, he has a joint saving account with the wife. Most people would think:-- when the husband passed away, the wife will get the money automatically since it is joint account. But NO! She could not withdraw even a single cent!! Why.....??

Joint saving account is meant for convenience when either one of the spouse needs it the most. But most people always assume once the other holder dies, another half will get the money automatically which is INCORRECT! Why.....??

When one person dies, the other joint holder of the saving account will get the money automatically IF that particular bank practises 'JOINT TENANCY' - which means when one party dies, the other joint party gets money automatically.

Unfortunately, not all banks practise JOINT TENANCY, some foreign banks practise and most local banks don't. If you want to be sure, just ask your bank if the joint saving account is based on JOINT TENANCY.

Some banks have this clause called “Survivorship Clause“. This is more easily understood….to mean that if there are two or more names in a joint-account, the survivor (the one who didn’t die) gets to have all the money in the joint account.

It is a separate paper for the account holders to sign when opening, or sometimes even after the account have been opened previously, in order to say that the account holders themselves, opt for this “Survivorship Clause”.

Will -- common queries raised

Witness ~ are not beneficiaries under the will and who are not the husband or wives of the beneficiaries. An executor who is not a beneficiary or a husband or wife of any beneficiary under the will may witness the will. A witness does not need to know the contents of the will.

Executor ~ You must have at least 1 and a maximum of 4 executors named in your will. If there are minor beneficiaries, who are below the age of 18 years named in your will, you must name at least 2 executors. The executor need not be a beneficiary but should be at least 21 years old and must have the willingness and capability to act as an executor. If you have difficulties in appointing an executor, you can always consider the Trust Corporations. You may also state in your will that the executors are also to act as trustee to hold any assets or invest or use any money for the benefit of the minor beneficiaries named in your will.

Rewrite ~ You should review your will regularly. You may change your will at any time and from time to time during your lifetime. It is advisable to review your will if any of the following happen to you....

• Change of marital status (married, divorced)
• Change of your executor status (migrate, death, relationship breakdown, incapacity, bankrupt)
• Change of your guardian status (migrate, death, relationship breakdown, incapacity, bankrupt)
• Change of mind with regards to your beneficiaries (children reach the age 21, different beneficiaries)
• Change of your witnesses status (migrate, death relationship breakdown, incapacity)
• New family member (new born child)
• Substantial increase of wealth (started a business, purchased properties)

However, you should never attempt to change your will by deleting words or adding words in or by attaching anything to it. If you do, your will becomes ineffective or invalid unless the changes are properly made.

Under the Wills Act 1959, no obliteration, interlineation or other alteration made in a will, after its execution, is valid or has any effect except so far as the words or effect of the will before the alteration are not apparent, unless the alteration or a memorandum referring to the alteration and written on the will, is executed in the manner in which a will is required to be executed.

Executor

The cornerstone of the Will lies in your choice of Executor because who you choose will determine whether your instructions are carried out when you are no longer around. While most individuals are awared of the duties the Executor are entrusted to, but, few realize the Executor they appoint will be granted temporary custody over the estate which the Executor is going to distribute. They, possess the same power & right over the estate as the deceased person, i.e. issuing cheques, transfer or liquidate the estate be it movable or immovable.

It is understandable that when choosing our Executor, we would consider someone whom we trust or familiar with. None of us would think of appointing someone whom we are uncomfortable with, furthermore if it is a trust corporation especially when fees are involved during the estate administration.

Although there is advantage appointing someone whom we are familiar with, there is risk involved. Selecting an individual to manage your estate may do more harm than good, apart from the risk of loss from misuse or mismanagement. Below is an example...

Frank was a fit man and was always on the go. Already a general manager of a large financial group at the age of 40, with a big house, no liabilities and more than RM 10 million in investments to his name, he was in the prime of his life. At the suggestion of his wife, Angeline, he decided to have his will done, naming his wife and kids as beneficiaries. He appointed Angeline as executor and his younger brother, John, as substitute executor.

One day, he and his wife were travelling outstation. Fate played a harsh hand and they met with an accident that left no survivors. John, in his capacity as executor, took over the administration of his estate. Coincidentally, John was struggling with his business and had a large debt at this point of time. Succumbing to pressure from his creditors, he used part of the proceeds from the sale of Frank’s investments to cover his own debt. The business deteriorated further and he continued his ‘temporary borrowings’ to fund his business losses. Soon, he was using the estate to fund the education of his own children along with that of Frank’s kids!!

Setting up a TRUST

As parents, you would protect your children. For example, you may purchase insurance so that in case something happens to you while they are young, there will at least be cash to provide for their needs. If you have taken insurance, chances are, you may think that you have done enough in providing security to your loved ones by nominating them as your beneficiaries in your insurance policies. Think again...

Are your loved ones completely protected when you nominate them as beneficiaries in your insurance policies? Is that actually enough?

You may want to consider:

• If your spouse is the sole beneficiary to your insurance policy, what happens to the insurance proceeds upon your spouse’s passing? Or,
• If your young children are the beneficiaries, who should claim the insurance proceeds for them in the event both you and your spouse are unable to?
• Are your beneficiaries mature enough to handle large sums of money?
• Is there someone competent enough to assist the beneficiaries?

TRUST

You have probably accomplished a great deal with your life. Over the years you have worked hard, planned and saved.

You have made sacrifices to be where you are. You will want to pass along your wealth to your loved ones with minimal hassle and delay by the legal process. What arrangements have you made?

If you have yet to draw up a Will, then you must have one and update it periodically. If you have drawn up a Will, that is the first step. It may however not be enough. To complete your estate planning process, you may need to create a TRUST.

A Trust is one of the most effective financial planning tools to safeguard your assets for your loved ones. The Trust will contain specific instructions to manage, protect, preserve and distribute your assets. It will also outline the duties and responsibilities of the Trustee.

Trust is a legal arrangement where the creator of the trust called the Settlor entrusts and transfers legal ownership of the assets to another person called the "trustee" under a Trust teed. The Trustee then acts for the benefit of the named beneficiaries in the Trust deed for a specified period of time.

Where is the best place to keep your Will?

Is your Will kept so safe that no one could find except the RAT?? Then it is as good as having no Will...

Although making a Will ensures your wishes will be fulfilled, you should however also ensure that your Will can be found quickly & easily when the need arises. Writing a Will is just half of the story, the other half is to keep it in a secure place.

Some people hide their Wills so well, it is as good as lost! Or, some people would keep it in a bankNot a good idea to keep the Will because when a person passes on, all the bank account including the safe deposit box will be frozen too!

So.... Where is the BEST place? ~~ i) it is known to your family members, ii) confidentiality is maintained, iii) can be found when the need arises in many years to come

Where....? Yes, at Rockwills which offers you the professional custody services for your Will by Rockwills Trustee Berhad. Our unique retrieval service will ensure your Will could be found quickly & easily when the need arises.

Here is why :

1. Prevent tampering and confidentiality preserved
2. Safe from calamities, such as flood or fire
3. Free from deliberate destruction
4. Controlled access with special custody identification card
5. The Unique retrieval system with personal bar-coded custody card
6. Will custody centre with humidity control, CCTV & bio-metric security

Estate Planning

Does it mean having your Will written mean that you have sufficiently planned the distribution of your estate. On the contrary, you should have an estate plan, before you have your Will written. This is because your Will merely implements your estate plan. If you refuse or fail to plan, there is a possibility that things may not turn out the way you wish when you are no longer around.

Estate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity.

An Estate plan will achieve maximum realization of the testator's objectives - which include provision of financial management for the benefit of a surviving widow and children, appointment of trustees or guardians for children and selection of executors and a trusted adviser.

Your estate planning sets up contingency planning to meet your goals and allows you to plan for your disability and direct the distribution of your property upon your death.

With an estate plan you can control all your property, giving what you own to whom you want to receive it, the way you want them to receive it and when you want them to receive it in the event of disability or if you die.

It also provide instructions for your health care matters in the event of your disability where you are unable to give directions. Estate plan also allows you to leave explicit instruction for the care of your loved ones and create protective trusts for your children.

Article extracted from FPAM

In planning your Will, be sure not to make the following common but dangerous presumptions:

i) As your parents are older, they will predecease you
*Possible consequences:
So you leave them out of your Will. Big mistake! If they depend mainly on you financially, could your spouse be expected to support them on your behalf when you are no longer around, especially when your spouse may not be in the position to do so financially, or may remarry?

ii) Your children will be looked after by your spouse in the event of your demise
*Possible consequences:
As a result of this common presumption, many parents fail to appoint testamentary guardians or create testamentary trusts in their Wills. In some cases, a parent may even will everything to the spouse in the expectation that the spouse will look after the children. What happens if the spouse is also unable to be there?

iii) Your spouse will pass on the property she inherited from you to your children
*Possible consequences:
It is likely that some or all of what you will to your spouse, may end up with your spouse’s new husband or wife, parents, siblings and children by the new marriage instead of your own children. Are you willing to take this risk? Would not your children be better protected with a testamentary trust?

iv) Your parents will leave to your children the assets which they inherited from you
*Possible consequences:
You may not mind a part of your estate going to your parents. However, you must remember that they are entitled to do whatever they wish with the portion which they receive, including passing it on to whomsoever they wish. If they do not have a Will, your other siblings may also receive the assets you meant for your children. Is that fine with you? Isn’t there a possibility that your nephews and nieces will be grateful for the inheritance from their grandparents when
it could actually be part of your hard-earned savings for your children’s education or spouse’s retirement?

v) The relative or close friend who you appointed as your executor will not charge an executor fee on your estate
*Possible consequences:
Many Malaysian are reluctant to appoint trust corporations as executors to administer their estates, despite the obvious advantages because trust corporations charge for their professional services. In an attempt to save on estate administration costs, they appoint relatives and friends
instead. Sometimes, this backfires. Under Section 43 of the Probate and Administration Act 1959, an executor or administrator of an estate may be allowed by the High Court a commission of up to 5% of the value of the assets collected by them. This provision is applicable even though your Will does not expressly provide that the executor can charge. In addition, these relatives and friends may not have the time or expertise to administer the estate. As a result, lawyers and other professionals are engaged, whose fees are also charged to the estate. Consequently, the estate administration costs and fees are as much as, if not significantly more than, in cases where a trust corporation is appointed. Is it not worth considering appointing trust corporations, who are specialists in this area, to be your executors?

vi) The relative or close friend who agreed to be appointed as your executor will continue to accept the appointment even years later
*Possible consequences:
It is not uncommon for testators to appoint their friends and relatives as executors of their Wills without informing them. There is no certainty that these friends and relatives are willing to take on the responsibility. Even where an executor is informed of their appointment, a testator may only pass away years after the Will is made. Will the executor still be willing and able to undertake the responsibility then? More importantly, will the executor even remember his
appointment under the testator’s Will? Is there not a possibility that the executor himself may be deceased or no longer reside in Malaysia?

Q & A re Nomination on EPF

Extracted from ~ kwsp.gov.my

Q : I have made a nomination and at the same time I also have written a Will. What is the status of the nomination and the Will?

A : The status of nomination supersedes the will. Payment will be made to the nominee/nominees that you have elected.

Q : I did not nominate the beneficiary of my savings, but I have a Will on my savings. What is the status of this Will?

A : The will cannot be used to determine the beneficiary of your savings. Your next-of-kin needs to produce the Letter of Administration/Grant of Probate/Distribution Order to claim your EPF savings.

Q : What will happen to the member's savings if the member and his nominee die simultaneously?

A : If the member and his nominee die simultaneously, payment will be determined according to the time of death and the age between the member and the nominee. If the nominee dies before the member, payment will be made as for cases without nomination. However, if the nominee dies after the member, payment will be made to the nominee’s next-of-kin.

Q : What is a letter of Administration?

A : A Letter of Administration is an appointment letter for administrator/administrators issued by the High Court to administer the deceased member’s properties.

Q : What is the Letter of Administration/Court Order?

A : The Letter of Administration or Court Order is an Order granted by the Court to the administrator/administrators to administer the estate of the deceased.

Q : What is the Grant of Probate?

A : Grant of Probate is a document granted by the High Court to administer the deceased's estate when the deceased had left a Will.

Q : How to obtain the Letter of Administration or Grant of Probate?

A : The documents can be obtained as follows:

• Letter of Administration is issued by Amanah Raya Berhad
• Distribution Order by the Land Office
• Grant of Probate by the High Court

Q : How does the EPF process application under the Death Withdrawal for embers who dies without making any nomination?

A : Applications from member's next-of-kin are processed according to the amount of savings as follows:

a. RM2,500.00 and below
Full amount will be paid to the member's next of-kin immediately after application is received.

b. RM20,000.00 and below

First payment amounting to RM2,500.00 is made immediately after application is received.
The balance is processed after two months from the date of member’s death.

c. Exceeds RM20,000.00
First payment amounting to RM2,500.00 is made immediately after application is received.
Second payment (not exceeding RM17,500.00) is processed after two months from the date of member's death.
The balance is paid upon producing the Letter of Administration/Grant of Probate/Distribution Order.

However, if the Letter of Administration/Grant of Probate/Distribution Order is presented at the point of application for withdrawal, payment will be paid to the persons/administrators concerned accordingly.

Q : Can I nominate an association or welfare organization as beneficiary of my saving?

A : No. You can only nominate an individual or several individuals as beneficiary of your savings.

Q : When someone has nominated the children who are all below 18 years old as beneficiaries, and in the event when this person and the spouse have passed away at the same time, can the children claim the saving? If not, what are the procedures?

A : The nominee may apply to withdraw the deceased member's savings provided that the nominee is 18 years old and above. If the nominee is below the age of 18 years, he/she will not be eligible to apply for the death withdrawal until he/she has turned 18 years old. However, the guardian of the nominee may apply for the withdrawal attached with an appeal letter on the grounds of financially supporting the nominee. The appeal will be considered at EPF's discretion.

Don't wait...

Estate management and planning are commonly regarded by society as unimportant. Many believe that estate management and planning are meant only for people who are wealthy or who have high-incomes and for the elderly. Such an attitude could lead to endless problems with no solution in sight. Hence it is important that people from all strata's of society have a clear understanding of what is really meant by estate planning and management. Such awareness would certainly put a stop to the never ending problems associated with estate management.

Estate management and planning consists of asset management before and after death. This is to ensure the deceased's accumulated wealth is properly inherited and enjoyed by the surviving heirs.

Wisdom and care need to be exercised in estate planning and management, for estate management is not merely the rounding up of, or management and conservation of the assets; it must necessarily culminate in the smooth and hassle-free transition of the accumulated wealth to the lawful heirs.

A Testator making a Will is actually performing the noble task of conveying his wishes regarding the disposition of the wealth amassed by him during his lifetime. A proper planned property distribution in a Will would ensure the properties are distributed to the loved ones for their benefit.

Don't wait until it is too late...

Appoint a Trustee Company to administer your estate

[The following is an adaptation based on a true story. The names have been changed to protect the identities involved.]

“Frank was a fit man and was always on the go. Already a general manager of a large financial group at the age of 40, with a big house, no liabilities and more than RM 10 million in investments to his name, he was in the prime of his life.

At the suggestion of his wife, Angeline, he decided to do a will through a will-writer, naming his wife and kids as beneficiaries. He appointed Angeline as executor and his younger brother, John, as substitute executor.

One day, he and his wife were travelling outstation. Fate played a harsh hand and they met with an accident that left no survivors. John, in his capacity as executor, took over the administration of his estate. Unbeknownst to Frank, John was struggling with his business and had a large debt. Succumbing to pressure from his creditors, he used part of the proceeds from the sale of Frank’s investments to cover his own debt. The business deteriorated further and he continued his ‘temporary borrowings’ to fund his business losses. Soon, he was using the estate to fund the education of his own children along with that of Frank’s kids.

By the time Frank’s kids grew up, there was hardly anything left for them. When they questioned him on how this could arise, he said he had to settle their father’s debts and gave no account of the monies used.”

Cases like this are common. When you wish to write your will, the keys are:

• Who will get what and how best to provide for your beneficiaries?
• Who do you appoint and is that person qualified to be the executor of your estate?
• Can you trust this person with everything you have and will he/she be always there for your beneficiaries?
• You have started planning for your loved ones by writing a Will but you wish to ensure that your wishes in your Will would be followed.
• You need the Executor to have the expertise and experience to handle your estate and spare your family from the hassle of administering your estate.
• Ensure continuity in the Estate Administration and avoid delay caused by the critical illness or death of the appointed Executor, his delay, procrastination or his disinterest in administering your estate.

Understandably, you may want to appoint someone close to you as the executor. Selecting an individual to manage your estate may do more harm than good, apart from the risk of loss from misuse or mismanagement. The executor will be required to deal with various tedious and time consuming legal matters beginning with the application for probate, attending court hearings, preparing reports, etc. until the distribution according to the instructions in the will. The process can get very complicated.

Therefore, you need these qualities to be the Executor :-

• Knowledge and experience in administering the different aspects of Executorship and Estate Administration so that the management and distribution of the estate can be completed smoothly and expeditiously.
• Continuity – unlike an individual who may be affected by death, critical illness or cause delay, a Corporate Trustee provides continuity in carrying out the terms and conditions of the Will.
• Independence and accountability – Rockwills Trustee is independent in its management and administration of the Estate and acts impartially to all beneficiaries. At the same time, we are under legal obligation to ensure that the funds are properly managed, accounted for and properly distributed.
• Peace of mind – with Rockwills Trustee acting as your trustee, you are assured of a professional and experienced trustee to follow through all your wishes.

Appoint a Trustee Company to be your Executor

If you feel the duties of an Executor are too compelling to burden your family or friends, have doubts about the abilities and honesty of your potential Executor, or can not find an appropriate Executor, do consider to approach a Trustee Company. It is an excellent alternative to individual Executors. Registered under the Trust Companies Act 1949, it is authorized to act as executor, Trustee or Investment Manager, if required.

The advantages of appointing a Trust Company are :

• It will never be biased towards any particular parties resulting an unfair distribution
• It has perpetual existence as compared to individual who may die, incapicitated, becomes of unsound mind or becomes a bankrupt
• It would be in a better position to handle and manage estate administration because of its expertise and competency
• The work done by an Executor is complex and the role of a Trust Company is basically deals with estate administration; therefore there is no issue in facing different obligation.

The individual Executor may charge a fee for his or her services. Often this individual is a relative, and he or she may choose not to charge a fee. If a fee is charged, the amount is regulated by statute, and in others it is what is “reasonable” for the work performed. In Malaysia, an Executor can charge up to 5% of the estate value.

Today, there are more testators appoint a Trust Company as their Executor for total peace of mind knowing your family will not face the problems, the estate administration is a small fee to pay. There are special packages available for reduction of the estate administration fees which amount to substantial saving for the estate.

Executor

The Executor is vital to ensure all the final wishes come true. He/She oversees and is responsible for the administration of the entire estate of the Testator until the distribution of the assets is completed. The Executor can be anyone whom the Testator decides on, including a spouse, a member of the family or a close friend. As your entire estate will be vested with your Executor to enable distribution, the chosen person must be honest, capable and a high level of integrity as the duties carried are tedious & time-consuming.

Depending on the size and value of your estate, and the age of your beneficiaries, the role can lasts over an extended period of time. Under the Probate And Administration Act 1959, a Testator can appoint upto 4 Executors to act jointly. When choosing the Executors, consider important factors such as assets management skills and professionalism, as a large assets and businesses may require the Executor to direct, invest or continue these operations to enhance your estate. They will also need time to understand and to garner the expertise to obtain the legal rights to execute the Will so that that neither unnecessary costs not further grief is incurred or caused.

The expertise and legal understanding involves obtaining a Grant of Probate from the High Court by submitting various documents. The Executor has to confirm and settle all the liabilities and debts by writing to Financial Institutions, Government Departments and search for records so that the remainder of your estate can be distributed to the beneficiaries. Upon completion of this, the Executor will prepare a proper set of accounts for the approval of the beneficiaries before subsequently distributing the estate according to the terms of the Will.

Small Estate

If the gross value of the estate does not exceed RM 600,000 and consists of movables only, Amanah Raya Berhad(ARB) can administer the estate by issuing a declaration whereby the assets will be administered and distributed accordingly. Should there be a Will, the distribution will be according to the Will; and if it is Intestacy, the distribution will follow the Distribution Act.

If the gross value of the estate does not exceed RM 2mil and consists of both immovable & movable assets, ARB will not stand in to administer. For those who dont have a Will, the lawful beneficiaries have to go to the District Land Office and will follow the Distribution Act. For those who has a Will, the procedures will be according to the High Court.

Administrator

When a person passes away without a Will, the first issue arise would be to determine who to be the Administrator of the estate. How to appoint? He can be someone appointed among the beneficiaries to act on behalf of the deceased; he can be one of the beneficiary also. Every other beneficiary must agree to the appointment and renounce their rights if they are not applying as an Administrator. This can be lead to a contention when the beneficiaries can not agree on who should be the Administrator, the dispute may turn into a legal suit and drag for years.

All the lawful beneficiaries under the Distribution Act 1958 (as amended in 1997) must give written consent to appoint 1 Administrator if all lawful beneficiaries are 18 & above OR, 2 Administrator if not all are 18 & above.

Estate Planning = Written your Will??

Does Estate Planning associate with a Will written? Prior to having a Will written, one have to understand the importance of Estate Planning as to ensure your loved ones are able to receive your assets soonest possible and to your choice of beneficiaries. It is a legacy of love to your family.

So, how to ensure your loved ones are able to receive your assets soonest possible? We all know under the law, all the deceased's assets will be frozen until Probate (where there is a valid Will) or Letter of Administration (where there is no Will) granted by the High Court. Therefore, the dependents are unable to withdraw the money from all the bank accounts, sell/transfer the ownership of the properties i.e. houses, shares, unit trust, cars etc. If a person dies without a valid Will, there is delay in unlocking the frozen assets and incur unnecessary costs.

And, the first issue is to appoint an Administrator of the estate. Since there is no Will to appoint the deceased’s choice of Executor, the petition for a Letter of Administration is normally filed by a beneficiary who has priority over other beneficiaries. Every other beneficiary must agree to the appointment and renounce their rights to petition. This can at times be a problem when the beneficiaries cannot agree on whom should be the administrator. This dispute may turn into a legal suit, who knows, it may drag on for many years... Would you like that to happen to your dependents?

Next, is to look for 2 sureties, akin of Guarantor. Each of the sureties must be willing to provide an administration bond more or equivalent to the gross value of the estate of the deceased. Obviously, it is not easy to find 2 sureties unless they have an interest in the estate or they have a special relationship with the deceased. The purpose of the sureties is to protect and secure the creditors and beneficiaries against losses caused by the improper administration of the estate.

The court may have its discretion to reduce the number of sureties or dispense with them, and/or reduce the amount of the bond. In the event where a trust corporation is appointed as the administrator or where the gross value of the estate does not exceed RM 50,000, no surety shall be required. No also required if the administrator is the sole beneficiary of the estate.

When all these requirements have been fulfilled, the High Court will then issue the Letter of Administration and only then can the deceased’s estate be distributed according to the law of intestacy.

By having a Will, all these hassle could be avoided. You also exercise your right under the Law to appoint people of your choice to administer your estate and carry out your wishes, ensure and safe guard the interest of those you love and care.

Trustee?! Who and what are the responsibilities?

A Trustee is a Trust Corporation or a person chosen by you to carry out your instructions. As a Trustee, he has a fiduciary duty to act in the best interest of the Beneficiaries. This is achieved by fulfilling the terms of the Trust and governed by various laws and regulations, such as the Trustee Act 1949 and the Probate and Administration Act 1959.

The Trustee is the keeper of trust assets and acts as the implementer of terms of the Trust Deed for the Beneficiaries who shall enjoy the income generated from the Trust during the trust period and also the trust capital when the Trust ends.

Isn't a Will enough? Why is there a Trust is set up too?

If you have drawn up a Will, that is the first step. It may however not be enough. To complete your estate planning process, you may need to create a Trust. Why?

Do you know that trust is an extremely effective Estate Planning tool to protect your assets and to pass wealth to your heirs efficiently whilst maintaining privacy? You can continue to have control on how the assets are distributed even when you are no longer around.

A Trust is one of the most effective Financial planning tool to safeguard your assets for your loved ones. The Trust will contain specific instructions to manage, protect, preserve and distribute your assets. It will also outline the duties and responsibilities of the Trustee.

A Trust is where the creator of the Trust called the "Settlor" entrusts and transfers legal ownership of the assets to another person called the "Trustee" under a Trust Deed. The Trustee then acts for the benefit of the named Beneficiaries in the Trust Deed for a specified period of time.

A Trust which can be used in many ways to benefit your loved ones is generally set up with various objectives such as;

• distributing assets quickly and without the hassle of applying for Grant of Probate or Letters of Administration;
• staggering the distribution of money and assets over a specified period of time;
• preserving the accumulated assets from breakup and loss in value for the enjoyment of successive generations;
• risk management to protect your assets against claims by creditors;
• supporting various family members for objectives such as education, maintenance, retirement, medical and for handicapped children.

What to consider on planning your estate

If you have decided to write a Will, planning your estate should be taken into consideration thoroughly.

Think of --

• What do you have? (movable : cash, unit trust, stock/shares, insurance, EPF etc..even your expensive jewellery, antiques, artwork..; immovable : house, shop, land etc..) And, not necessary in West Malaysia but also East Malaysia.
• What do you owe? (bank loan, house loan, car loan, tax, credit card, overdraft etc..)
• Who to give? (not only to your children or husband, maybe your siblings, parents, good friend, charity etc..)
• How to give? (periodically, in a lump sum etc..)
• Who do you trust? (to be your Guardian of your children, to be the Trustee to hold the Trust and an Executor to run all matters related to your last wishes in the Will)
  

Appointing Executor is an important decision in your Will because this person will be responsible and full authority for the administration of the deceased's estate. Therefore this person must be reliable, honest and just, also to have the time and competence to complete the process.

If you have minor children (children below 21 years old), do appoint Guardian(s). The surviving spouse is duly act as the role of a Guardian and the appointed Guardian is the substitute when both parents are not around anymore.

As for the beneficiaries, they will be someone you love in your immediate family or extended family. You can also benefit any charitable and other non-profit organization. It is highly advisable to name substitute beneficiaries should there be an event when the sole beneficiary predeceased the testator.

If you have written a Will before, you have to re-write in these circumstances :-

• Marry or Re-marry
• Change of Executor/Guardian/Beneficiaries
• Change of Assets (Start of a new business or partnership, new properties purchased or inherited etc..)
• Addition of new family member (New-born or adoption)

we are all mortal and we can't deny it...

As we are all mortal and death often comes like a thief when we least expected, we owe it to our loved ones to make a Will during our lifetime. After reading my earlier blogs, we know that it is important to write a Will because by not making a Will, all our assets will not be distributed according to our wishes after our death.

When a person dies without making a Will, he is said to have died "Intestate", his property is called his " Estate" and his children, his "Issues". The law that deals with the distribution of the property of an Intestate is the Distribution Act 1958, which applies to non-Muslims in Peninsular Malaysia only. An Intestate's estate will be distributed among the surviving family members according to the Distribution Act. The same law applies to the male or female deceased persons. The procedures for an Intestate to apply the Letter of Administration will be different from those who has a valid Will.

About Writing a Will

Q : How to define a valid Will?
A : The testator must be of sound minded when signing the Will and above 18 years old (West Malaysia & Sarawak whereas 21 in Sabah); the Will in written/typed format, the testator sign in front of 2 witnesses & the 2 witnesses sign in front of the testator at the SAME time.

Q : Who can not be the witness?
A : The beneficiaries or their spouse. Otherwise, they will loose their right to inherit the assets.

Q : What is the name of the person to carry the duties to administer the assets? What are the duties?
A : Executor; the duties included

• To locate the Will
• To make funeral arrangement
• Apply for Grant of Probate (GP)
• Calling in assets of deceased
• To pay debts
• To prepare Statement of Accounts
• To distribute assets according to the Will
• To carry out wishes mentioned in the will

Q : Can a Beneficiary be the Executor?
A : Yes, and he can still inherit the assets.

Q : Who can be an Executor?
A : Someone you trust i.e. your spouse or one of your children or a Trust Corporation.

Q : What is the pro & con when appointing individual as an Executor?
A : It is understandable that you would appoint the one you trust and you have confidence in this perosn but it is not easy being an Executor, it is because this person needs to have enough knowledge in Estate Administration, legal or accounting related issues, and also the time & effort. Should this person lacks knowledge & time or may not be competent, the duration of a Probate granted will be prolonged. What if this person couldnt survive you? What if this person becomes greedy after obtaining the Grant of Probate since all assets are transferred under this person's name?

Q : How about appointing a Trust Corporation?
A : It is advisable to appoint a Trustee Company to be your Executor because there is continuity in administering your assets. It has the expertise & competency in handling your estate. A Trustee Company will be fair to distribute according to the instruction in the Will.

Q : Can my Will in Chinese? is it still valid?
A : A Chinese Will is still valid.

Q : How about a Will being tape recorded?
A : No, it is not valid.

Q : Can I distribute all my assets to my children in equal shares?
A : Not all, i.e. car. You can sell it and distribute the proceeds equally though. You can however distribute a house to all your children. But the problem is all of them must consent when selling the house.

Q : Is it necessary to have my beneficiaries around when I sign my Will?
A : Not necessary

Money left behind... Sigh!

From the Star newspaper dated 9 Nov 2009 ( more than a year ago).. there were RM3bil remain unclaimed from the Accountant-General's Department because the depositors failed to name their beneficiaries before dying. It could be the deceased depositors' next-of-kin or their children didnt even know didnt even know about the money that was left behind. The money could be left in the EPF or the banks, or they are not awared of the procedures to claim. Most of all, the deceased didnt write a Will before dying.

It is not that easy for the next-of-kin or children to inherit the deceased assets if there is no Will written. They have to go through a tough time before they could claim the deceased's assets. And it has to go according to the Distribution Act 1958. What is Distribution Act 1958?

The Distribution Act 1958(As Amended in 1997) is applicable to all Malaysian and Foreigners with Malaysian domicile who die intestate in Malaysia. The Act apply to foreigners whether they are working here as an expatriate or living in Malaysia on the MM2H programme(My Malaysia Second Home Programme). Please view the image attached.