What’s going to happen to your Malaysia bank account after you die is a question or topic that is becoming more and more common every passing year. As you grow older you will ask questions that can affect your future and your present decisions. At the same time, as uncomfortable as the question may be, it’s a question that many adults have.
Before we continue, let us clarify one thing first. Bank accounts are considered assets, even when it’s a Malaysian bank account. So when we say “assets”, it also includes your Malaysia bank accounts and whatever savings and investments that are in them.
Let’s get started on the burning question that people have been looking for. We will make this article as easy for you to read as possible.
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Did You Appoint Beneficiaries and Trustees in Your Malaysia Bank Account?
Some people may or may not be aware of this, but back accounts do allow you to appoint beneficiaries and trustees.
According to Investopedia, a beneficiary is someone you appoint to benefit from your assets. In this case, it’s your bank account. You can choose to appoint 1 beneficiary where s/he gets 100% of whatever is in your bank account. Sometimes, people appoint more than 1 beneficiary. You are allowed to appoint more than 2 beneficiaries up to a maximum amount as set by the bank.
You can appoint people who are not necessarily your immediate family or relative to be your beneficiary. However, in Malaysia most people often appoint their parents, siblings, relatives, or spouses to be their beneficiaries. There are instances where some people appoint close friends or a certain special someone that has no blood relations with them as beneficiaries.
Each beneficiary will receive a certain percentage % of the money that you have in your bank account at the point of your death. Some beneficiaries can receive a bigger percentage, while some others have a smaller chunk of the money. For instance:
- Beneficiary A: 40%
- Beneficiary B: 20%
- Beneficiary C: 30%
- Beneficiary D: 10%
We should also mention that a beneficiary may not necessarily be a person. Some people appoint an association to be their beneficiaries. It can be a church, mosque, or temple. Sometimes they may appoint schools to be their beneficiaries also.
A trustee, on the other hand, is a person who is appointed within your bank account to administrate the monies accordingly. They may or may not receive any kinds of money from your accounts unless they are a beneficiary too.
A trustee doesn’t necessarily need to be an appointed person. Sometimes, people get a trustee service (for example: Rockwills) to help them with administering the monies they have left in their accounts.
Why beneficiaries and trustees are important:
Having mentioned all of that in the above section, we are sure you can see where we are coming from. In hindsight, a lot of people think that beneficiaries and trustees are not important. At the same time, they think that it’s less likely their beneficiaries will get the money in their lifetime (assuming you didn’t appoint your parents or someone else older than you as beneficiaries).
However, we’d advise you to appoint trustees and beneficiaries for your bank accounts. You will never know when or what will happen to you in your lifetime. Just in case if your demise, your money will go to your loved ones without any problems. They will most likely just need to wait for the money to come their way.
In summary, if you passed away at any given time, then whatever money will be passed on to the named beneficiaries. Whoever you have appointed as trustee will administer the money accordingly for you when you pass.
What If I Didn’t Appoint Beneficiaries and Trustees in my Malaysia Bank Account?
This is where the real questions and worries set in. You or your family members may question whether you have appointed anyone to be trustees or beneficiaries. In this The Star article, it’s said that there are up to RM60bil unclaimed monies by heirs in Malaysia since 1957. That is a lot of unclaimed money that has been kept by Bank Negara Malaysia (BNM).
There are ways that you can take the money back. However, there will be differences in the assets inheritance (including your bank accounts) if you are a Muslim or a non-Muslim.
For a Muslim, when you pass away your assets will be frozen until the case has been settled. As Muslims, you will first have to obtain the Faraid certificates from the Shariah court. It contains information on the value of the estate, the eligible beneficiaries’ names, and the proportions of each beneficiary.
Then your heirs (Quarnic heirs or Ashabul Farud) must all agree on the same administrator. It must be in written form and be approved by the magistrate or the Commissioner of Oath. Then your wealth will be distributed accordingly based on Shariah law. It’s the same thing when you have a legal wasiat.
However, note that your funeral expenses and other outstanding debts will have to be paid off first. Then whatever money you have left will be distributed to your family member. If you have no heir, then your money will go to Baitumal (Islamic financial institute).
For non-Muslims, your estate will also be frozen until you have settled the case. You and your family members will need to appoint an Administrator, a decision that needs “approval” from all family members. Then you will swear an oath with a Commissioner of Oath.
The wealth will be distributed equally or according to what you have written in your will (if you have a legal and valid one prior). Again, like with the Muslims, the money will first be used to pay off any funeral expenses and any debts. If there are any money left, then the money will be distributed accordingly and evenly between family members.
However, if you have children under 18 years old, the court may appoint a guardian (may not be your choosing). If you have children, the money will “still go to them” in the sense that they need money for education and whatnot. However, the appointed guardian will still need to go to court every time s/he wants to withdraw money from your accounts.
Now for the streamlined answer for those who haven’t got it. If you did not appoint beneficiaries, trustees, or have a will written already, then it will be held on to by Bank Negara Malaysia (BNM). BNM will hold on to the money until someone comes to claim it. Oftentimes, these can get pretty tough as you will need to produce more than death certificates to claim. There are times where your family claiming for your Malaysia bank account money can get very aggressive and confusing.
Having said that, we will strongly advise you to appoint beneficiaries, trustees, or even write a will when you can.
Will Writing a Will Make any Difference?
This is another common question when people find out that wills do indeed influence the outcome of your bank’s money distribution. Some of you may have the thinking where “I don’t even have RM100 in my bank account so why should I care?” It’s a valid thought as you may not have a loaded bank.
However, in the near future, we are sure that you will have more money in your bank. You will have your own assets that you will like to leave to your loved ones. So yes, write a will. Most Malaysian banks (if not all) offer will writing services available. Or you may consult Amanah Raya to help you with will writing. The charges from each bank and will-writing institutions differ though. So that’s something you will have to look out for.
In summary, if you have not appointed a beneficiary already in your Malaysia bank account, we will strongly advise you to do it soon. Consult your bank branch when you can and have it settled. Alternatively, you may write a will and have it legalised. Because if you don’t, it will be very difficult for your loved ones to get whatever money you have in your Malaysia bank account if you pass away one day.