Do secret trusts even exists in Malaysia?
Secret trusts are indeed a thing in Malaysia. People don’t often think much about it or think that it is illegitimate. We understand that people often see secret trusts as not valid, and we can see where they are coming from.
People may have this thinking that if it is made in secret, it must either be illegal or have no legal value. It would just be another piece of paper. However, if you fully read into it and the situation surrounding it, you would understand the scenario better.
In this article, I will summarize how secret trusts in Malaysia are valid.
Are secret trusts valid in the first place?
To be short and precise: yes, secret trusts are very valid in Malaysia.
Many people are quick to dismiss secret trusts in Malaysia. However, many people don’t know it can be just as valid when legalized by a lawyer. It holds just as much validity as an open, “not secret” will.
When the person dies and leaves behind 2 wills, one secret and one not in secret, both wills will have to be followed thoroughly. Just like how people will uphold open, “not secret” wills.
However, there can be times when secret wills can fail also. When the secret will fails to be recognized or be legalized, then the known will is the legal will that is to be followed by all beneficiaries, trustees, and executors. As long as the known will is legal then it is less likely that it can be challenged, although contestable.
People should not doubt the existence of a secret will or trust. A secret will or trust exists because it serves to facilitate the intentions of certain parties related to the owner. It will still be treated in equal to the open or public will. It will, however, be treated outside of the formalities of the Wills Act 1959. Hence, it confirms the validity of secret trusts in Malaysia.
If the secret will fails, then the appointed trustee will be entitled to accept the assets held in trust in entirety. It can be as with no obligation to the intended beneficiary at all.
Circumstances where a secret will is needed or exists
Some people may wonder why there is a need for secret wills. People may question why all the secrecy surrounding the owner and their assets. There are some circumstances when a secret will is needed. Here are some scenarios where it is needed.
a. The owner having a secondary partner
Not everyone is made to be 100% faithful to their partners. Some people may be seeing someone else – a mistress or another man. If the owner is seeing another mistress and has kids with her, then he may have a very good reason to provide and leave behind assets for them.
In this kind of scenario, the secret will can be contested and it can become a very messy situation. The process can be very long and sensitive to be dealt with.
b. Linked to parties not agreeable by the owner’s family members
There are times when the owner may be in the company of people or societies that are not agreeable with their family members. Their family members may not want their spouse or parents to be linked with these people or societies, hence making sure that none of the owners’ assets go to them.
However, the owner may still want to give some or part of his assets to these people or society. Again, this can be a contestable will.
Secret wills exist whether people like it or not. People may not be able to accept it. However, they are as legal as known wills are.