The process of distributing your assets after probate in Malaysia is not exactly the most difficult task. In all honesty, if you have everything in order, then the distribution of your assets listed in your wills and trusts will be as straightforward as it ever gets. At times it may take slightly longer depending on the bulk of your listed assets. On the whole, it shouldn’t be the most difficult thing in Malaysia.
Have you got everything in order?
By “in order”, we mean the following:
1. Have a will and trust ready
Create a will and/or a trust under your name and have it validated by a recognized lawyer in Malaysia. If you haven’t got one, get one nonetheless. Regardless of the size of your wealth, it’s always good to have one. There is a difference between a will and a trust:
“A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children. If you die without a will, those wishes may not be carried out. Further, your heirs may end up spending additional time, money, and emotional energy to settle your affairs after you’re gone.”
Trust, on the other hand, means:
“A trust is a legal entity with separate and distinct rights, similar to a person or corporation. In a trust, a party known as a trustor gives another party, the trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary.”
2. Update your wills and trusts regularly
Some people think that it’s okay to leave their wills and trusts as they are. Though for some people, this may be the case, it may not be the same for everyone else. Not everyone’s assets will remain the same forever. If your assets grow exponentially every year, then yes you will need to update your wills and trusts regularly.
For example, this year your assets are only limited to your bank accounts and insurances. However, by next year you may have a house or other new assets. You will need to update your wills and trusts to fit these assets in.
At the same time, if you just got married or have kids, it will be great to include them as well. As you include them in your wills and trusts, don’t forget to list out how much each of these beneficiaries will get.
|Assets that you have||a. 3 houses
b. RM1,000,000 in money in your bank accounts
c. Insurances with a total payout of RM600,000
d. 3 cars
e. Cryptocurrencies worth RM50,000
f. Pets – 2 cats and 1 dog
Wife – 40%
Kid #1 – 20%
Kid #2 – 20%
Wife – 1 House
Kid #1 – 1 House
Kid #2 – 1 House
Kid #1 gets all 3 pets
You can include such distribution in your wills and trusts. In the event you passed away unexpectedly, your named beneficiaries in your wills and trusts can get the assets you have left behind.
If you did not leave behind a will and trust, your assets will be distributed according to Malaysia’s Distribution Act. You may not agree to what the Distribution Act of Malaysia says but it’ll be too late by then. Always have an updated will and trust ready.
d. Appoint a trustee
A trustee is someone who holds your money and assets for the benefit of intended beneficiaries named in your Trust Deed or Will. A trustee may not necessarily be the executor of your Will. You will need to have a trustee legally appointed at the courts before they can start helping you to distribute your assets. If they are not validly recognized, then they will have zero power in helping you to distribute your assets.
An executor – on the other hand – will be put in place to do the job instead. However, an executor’s job is more extensive than a trustee’s. An executor will have to locate all assets listed and not listed in your will. After that, the executor will need to find out if you have any outstanding debts. If you have debts, the executor will use your assets’ monies to pay it off before distributing the assets – in accordance to the Distribution Act of Malaysia.
What happens after that?
After everything is in order – after your wills and trusts have been updated and a trustee appointed, it’s time to move on to the next step. After you have passed away, your wills and trusts will be taken to court to be distributed to your next of kin. Your appointed trustee will see to it that it is distributed as per what you have listed in your wills and trusts.
If you have any outstanding debts and assets that are not listed, an executor will be appointed to locate and settle those. Don’t be surprised to find out an executor is appointed to work alongside your trustee. It’s a common occurrence.
The importance of having a Grant of Probate (GOP) / Letter of Administration (LOA)
A Grant of Probate (GOP) and a Letter of Administration (LOA) are legal documents that tells the relative and relevant institutions that the owners of the associated accounts have passed away. In the very same documents, it requests for the institutions to release the assets to the deceased’s next-of-kin.
However, there are some differences between the 2 documents:
|Grant of Probate (GOP)||Letter of Administration (LOA)|
|a. According to Legal Smart, a GOP is:
“A Grant of Probate is a document, issued by the High Courts, which appoints an executor (or up to 4 of them if acting jointly) to manage and distribute the estate. This can be one of the most straightforward ways to get access to the diseased property with a minimum time required.”
b. GOP documents are usually used when a person has passed away. An executor will be appointed to locate all unlisted assets and debts and settle the debts (where applicable).
|a. According to GTRZ.com, LOA is:
“A Grant of Letters of Administration is a document issued by the High Court of Malaya allowing the person named therein to administer the estate of a deceased who has died without leaving a valid will. The application for a Grant of Letters of Administration will have to be made to the High Court.”
b. A LOA is not just for when the owner has passed away. It is also applicable when the person is still around but incapacitated. However, most times it’s used when the person has passed away.
c. A GOP is still needed to locate all the unlisted assets and debts before the assets are released to the beneficiaries or next-of-kin.
Though it does seem like there are a lot of things to do, the outcome would be worth it in the end. Just remember to have a will and trust in place – updated and all – before you’ve passed away. Always ensure smooth sailing for your next-of-kin and your beneficiaries should anything happen to you in the future.
If you need any help with will writing and preparing a trust, feel free to reach out to us for further assistance. We are more than happy to assist you in your wills and trusts.