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.