Why it is important for you and me. We might have the perception that Estate Planning is for rich people only. But to be honest with you, estate planning is for everyone. If you have your assets, property, or money and you want to pass it down to the next generations, you need to plan the distribution accordingly.
Estate planning refers to planning on your wealth distribution ahead according to your wishes before any unfortunate event happens. Specifically, death. All your property, investment funds, insurance interests, etc. will be distributed according to the person's wish based on his or her Will.
Do you know that 90% of Malaysians do not have estate planning, and there are more than RM40 billion across the country that is remained unclaimed*, therefore having a well-thought-out plan ahead of time is crucial for you and your beneficiaries to make sure they don’t need to go through a long legal procedure to inherit all the assets left behind?
Why do you need an estate plan? There is no automatic transfer of the estate to family members or relatives after anyone dies, especially in the absence of a will, the property will be distributed by legal process under the Distribution Act 1958. The process of "freezing" an estate application can take two or three years, which may affect your family's daily life and expenses.
And the distribution of Assets will be distributed according to this Table. Proper estate planning can ensure that your family can live as usual and have the same quality of life.
How to start your own estate planning?
1. There is no better way to ensure that your last wishes are properly executed after death than to make a statutory will. After the death of the party concerned, the heirs only need to present the estate inspection certificate, and then the products can be distributed according to the will, which saves time in the procedure. Successfully, the inheritance can be obtained within 6 months,
2. Separate assets to distribute from your retirement savings will bring better results. This ensures that you have adequate retirement reserves; you can manage your retirement reserves more efficiently and independently, without worrying about spending assets set aside for inheritance.
3. Leveraging an Insurance Plan as a Wealth Succession Planning Tool. On the one hand, it can help you to leave a certain amount of funds and protection for the designated family members, on the other hand, it may also help you with asset appreciation.
4. Get ready for your retirement with a Private Retirement Fund Scheme (PRS). A private pension plan is a voluntary long-term savings and investment plan designed for individuals to accumulate retirement savings.
The PRS provides all Malaysians, employed or self-employed, one more option to top up their pensions in this well-structured and regulated environment and helps you to make the distribution of wealth easier as can direct appoint beneficiaries during or after the applications.
Remember, if we do not have a will at the time of death, our estate will be distributed according to a designated formula in the Distribution Act 1958 unless you are a Muslim in West Malaysia and Sarawak or is a native of Sarawak. If you have a permanent home in the state of Sabah, then the Intestate Succession Ordinance 1960 will apply. In this situation, there will have a lot of problems will be faced by our loved ones.
Firstly, the manner of distribution of assets will be dictated by the Distribution Act 1958, and then possible family disputes might happen under this distribution. A long-term court case, which is a waste of time and money, you will be losing the right to appoint an executor for your Will.
Losing the right to nominate a guardian of your choice to take care of the assets in case the child is minor. In this case, the court will appoint an administrator under Section 30 of the Probate and Administration Act 1959 who can act as a guardian.
Alternatively, the court will appoint a guardian under Section 8 of the Guardianship of Infants Act 1961 to look after your children’s interests. However, the person appointed may not be of your preference. Similarly, family disputes may arise as to who is the most appropriate guardian.
And a Lengthy distribution process. For your information, the process to apply for and obtain a Grant of Letters of Administration will entail more cost and time, typically requiring an administration bond and the appointment of two sureties to guarantee the proper administration of the estate, as well as further court orders to affect the transfer of real property.