Nonetheless, it does not matter how many years you have those properties. As long as you own multiple assets regardless off the length of time, they are all yours nonetheless. If you own multiple properties and have no idea how to include them in your wills and trusts, then you have come to the right place. 

In this article, we will highlight key points in how to include them in your wills and trusts. Estate planning for people and families with multiple properties are not necessarily the most difficult thing in Malaysia. We will summarize everything into bite size information to make things easier to digest. 

List down all the assets you have first 

This is the easiest thing to start things off with. When you have a lot of assets and properties, you are bound to miss out one or two of your assets. Don’t just list out the assets you have in Malaysia. If you have assets outside of Malaysia, it’s best to list them down as well. 

It does not matter if you only have one asset outside of Malaysia. Just list it down nonetheless. It’s just as important as any other assets that you have within Malaysia as well. 

Assets do not just limit to properties and financial accounts. It can also include cryptocurrencies as well. As cryptocurrencies are everywhere, there are bound to be people who have a piece of it. You may have some so it’s worth including it in this list. 

Talk to a lawyer 

After listing down all the assets that you have within Malaysia and beyond the country, your next step is to reach out to an experienced lawyer. An experienced lawyer will walk you through what else is needed besides the list of properties you have just come up with. 

Usually, you will be asked to produce a legal document stating that the asset is owned by you. This is all for legal purposes and the future of those assets. Those documents can include title deeds, legal letters, etc. 

Creating a will 

The next step will be creating a will. Creating a will is not exactly the most complicated thing in the world. In the will, you can include all the assets you have previously listed out. Don’t forget to have the legal documents stating your ownership included as well. 

In the will, you will list out all the beneficiaries you wish to include. Usually, people will include their family members. Sometimes, some people may include their friends, girlfriends and/or concubines. For some people, they may even include their pets (it’s possible). 

At the same time, you will also state how much each beneficiary will get from your assets. If you only have 3 people named in your will, most people often will go 33.3% for each named beneficiary. 

If there are no beneficiaries named in the will, and you do not have a will, then things will work out differently. If you find yourself in such a situation (usually it’s your family members), then your assets will be distributed as per Distribution Act Malaysia. 

Appoint a Trustee 

Assuming that you do have a will in place and everything listed in it, then you will next appoint a trustee. A trustee is someone who helps distribute the assets listed in your wills to the named beneficiaries. They ensure that everyone gets their fair share of your assets as per listed in your updated will. 

A trustee is not an executor, who is a different person who handles different aspects of your will. However, a trustee will continue to oversee the distribution of your assets for as long as they are around. If there are any conservatorship or guardianship appointed, the trustee will see to it that they carry out their duties. 

An executor may be appointed 

Sometimes, even though you have a trustee appointed, it does not mean that it will end just there. In certain situations, an executor may be appointed to work alongside a trustee. An executor is someone who is appointed to locate more assets under your name – inside and outside of Malaysia. The executor will also ensure that all debts are paid off before the assets are being distributed to the named beneficiaries or next-of-kin. Note that this may take a long time depending on how complex the matter is. 

However, an executor is not like a trustee. An executor is only temporary whereas a trustee is permanent. Once the debt has been paid and all the assets located, everything else will be handed over to the trustee and the beneficiaries. The executor will exit itself thereafter. 

The trustee, on the other hand, will take over the newly found assets (or the remainder, depending on the situation). S/He will then ensure that the remaining assets will be distributed to the beneficiaries in the fairest possible way. 

Consider having a living trust 

We know this sounds like it’s a lot of things to consider for your future – but anything to fortify your future for yourself and the people around you. If in any situation, you find yourself in an accident or illness. You may find yourself incapacitated, which is not the best state to be in for anyone. That means you can no longer carry out your day-to-day tasks and work like usual. You may be bedridden or wheelchair-ridden for the rest of your time. 

If you’ve found yourself in such a situation, fret not. You may consider having a living trust for yourself. A living trust is a legal document stating what will happen to you and your assets when you become incapacitated. In the very same document, you may say who will take care of you, what’s going to happen to you, etc. 

You can have a living trust besides a will. It works and both can run alongside each other and still be valid. You don’t have to worry about whether if you should retract one to let the other one run on its own. 

Bottom Line 

Estate planning for people who have multiple assets and properties in Malaysia (and outside of the country) is not necessarily a complicated thing. Should you need any help with estate planning and will writing, feel free to reach out to us today. We will be more than happy to help you with your wills and trusts

What is a trust? 

A trust is a legal document that functions like a legal container. It holds assets like money and properties. These assets will be managed by you or a trustee when you have passed away or are incapacitated. Or the trust can be managed by another person or organization that is asked to oversee your trust until all your assets are transferred to your beneficiaries. 

You can establish specific terms for your trusts like naming your children as the beneficiary of your heirloom collections but only after a certain time period. You can choose what things go to who after your passing and the trustee will see to it that they get into the rightful hands. 

Establishing a trust makes it easier for you to transfer belongings to the people or organizations you choose. It can help reduce the tax burdens these people and organizations may face. 

What is a will? 

A will is also a legal document that directs and distributes your assets after your death to your named beneficiaries and heirs. Wills can include your instructions for matters that need decisions after your death. You can include executors to your will and guardians to minor children. It can also include directions for your funeral and burial. 

In a will, you can also direct an executor to create a trust and appoint a trustee to hold assets for the benefit of a particular person. A will has to be signed and witnessed as needed by state law. Implementing a will needs a legal process. It has to be filed with the probate court in your jurisdiction and carried out by a designated executor. The document can be publicly available in the records of the probate court that oversees the execution and has jurisdiction over any disputes. 

Do you need to have both? 

That depends on your circumstances. Although a will and a trust has so many things in common, the key difference is that a trust can be used during life and after the death of the creators. A will can only take effect after the creator has passed away. 

With both or without either one, wills and trusts can be used to serve effective state planning. Again, this depends on the circumstances of your life. 

If you die without a will, your assets and properties will be distributed according to the Distribution Act of Malaysia. If you have any underage children, the state will appoint the best guardian they see fit to take care of them. It may not be someone you like but that’s what happens when you passed away without a will. With a will, you can choose who to be their legal guardian when you are no longer around. 

Trust is when you need to do a lot of estate planning. You may use a trust to distribute assets without the cost and publicity of probate. Asset and transfers by trust can be a lot quicker and more efficient than transfers by will. It enables grantors to maintain privacy concerning the nature and value of their assets. 

Bottom Line 

You don’t necessarily need both to distribute your assets and choose your guardians. It all really depends on the circumstances of your life and what fits you best. For some people, having a will is more than sufficient whereas some others may need just a trust. For some other people, they may need both depending on what they have in life. 

If you need any help with creating a will or a trust, feel free to contact us today for further assistance. We will be more than happy to help.

When people hear of trust, they often think of its application within a family setting. However, what some people don’t know is that there is such a thing as a trust for businesses. If you haven’t known there are trusts for business, perhaps this article can explain what it is. 

A business trust is, of course, for a business. It usually covers the general areas of how the income is split, if one owner dies then what happens to their portion of the company, and many more. 

How does a business trust function? 

A business trust functions almost similar to a personal/family trust. The similarity is mostly that you will be allocating which business property to who and who gets how much money in the business. It works similarly to a family/personal trust – except on a business level. 

So whatever assets and properties a business has will be divided and allocated to the named beneficiaries. 

What goes into a business trust? 

Now that you know what a business trust is and how it works, here are some things that go into a business trust. Generally, most of the contents are similar to what a personal trust has, except with a few extra clauses and items. 

Distribution and splitting of assets and properties 

This is the most common item in a business trust. Basically, when you have passed away, your properties and every asset will be distributed to your beneficiaries whom you have named. It works similarly to how a personal trust functions and is a very self-explanatory part. 

Asset protection 

This is where a very solid line is drawn between your personal assets and business assets. Sometimes, if something went wrong, it can go very wrong on so many levels. 

For example, if your business owes money, the creditors will ask you to sell your assets to pay off debts. They didn’t mention which assets, as in personal or business assets. So if you do not have a clear cut business asset in place, the creditors or debt collectors will start selling your personal assets to pay off the outstanding debts incurred by your business. 

You do not want this to happen because one thing will lead to another. It’s good to have a business trust in place and have it updated periodically. 

Income splitting and reduced taxes 

Income splitting allows the named trustee to distribute the business profits to the named beneficiaries at a different level. The reason why business trusts have income splitting is so that the lower-income earner beneficiaries can have a bigger chunk of profits. 

Besides, profit distributions may increase any of the beneficiaries’ income into a higher tax bracket. The trust can make a distribution to the corporate trustee. The corporate trustee will ensure that the beneficiary will only be subjected to a company tax rate of a limited percentage. 

Why do you need a business trust? 

I think we all know quite clearly now why you will need a business trust. Having a business trust allows you to divide your personal assets from your business assets distinctively. In the event where you have passed away but still owe money, things tend to get very messy, for example. 

Having said that, by having a business asset in place instead of having none is better than having nothing at all. If you do not have a business trust, the creditors and debtors will come for your personal assets and income, which can cause a lot of problems. 

Bottom Line 

Now you know why it’s good to have a business trust in place. It can benefit you in the long run and provide some much-needed directions for your business when you have passed away. 

If you want to learn more on how to use trust to protect your business, feel free to reach us out.

When people think of wills, they only think of it as just that: a will. But people never really think if any wills are any different. There are some differences to a will, which usually are classified into 2 kinds: 

• Comprehensive Will
• Basic or Simple Will 

Not everybody needs a comprehensive will, but everyone should have at least a basic will. You may think “are there really any legitimate differences between a comprehensive will and one that is not?” 

Short answer: yes. There are differences between a comprehensive will and one that’s a basic will. 

Difference Between The 2 Wills 

Let’s establish the basic understanding of the 2 wills for you first. 

Basic Will 

A basic will usually include all the entitled people (called beneficiaries) who will be legally entitled to your assets after you have passed away. Basic will usually do not have a lot of monies and assets listed in them. A lot of the clauses are pretty simple and straightforward. 

It also can include a guardian for any underage children you have. In some basic wills, the will owner can also include a trustee, though it’s kind of not so popular. 

Comprehensive Will 

A comprehensive is one that includes everything a basic will has, and more. Comprehensive wills are usually more complicated as there are many facets to tackle. A comprehensive can be further divided into many kinds of wills. However, here are some of the more popular comprehensive wills. 

1. Testamentary Trust Will 

A testamentary trust will put some assets into a trust “in favor” for your named beneficiaries. In this kind of will, you will name a trustee to handle and oversee the trust. Most times people name a trustee in their will is because they still have underage kids. The will owners fear that they themselves will die before their underage kids become of legal age. 

In these kinds of wills, you can put your assets in trust and put multiple conditions in the inheritance. The conditions can be gradual based on beneficiaries’ age and factors. 

1. Joint Will

Joint wills are wills that are signed by 2 people or more. Each testator will have a separate will but mirrors a partner’s will. It can sometimes be called mirrored wills typically executed by spouses in favor of the other spouse to inherit everything. 

You will be unable to change executors, beneficiaries, and other provisions even after your spouse has passed away. Due to this inflexibility of joint wills, it can be seen and experienced as problematic for the surviving spouse. Since that the surviving spouse’s wishes may change after the death of his or her spouse. 

1. Living Will 

A living will isn’t one that distributes your property when you have passed away. Rather, it allows you to choose what medical treatments you’ll want to have when you become incapacitated. You could have a living death disease that renders you “functionless” when the disease gets worst. Or maybe you’ve gotten into a life-changing accident that you no longer can function as a proper human being. 

Then, in this case, you will have a living will in place. In this same will, you can name someone to make decisions on your behalf. You can also include advance healthcare directives for any of your future health issues. 

Which Will Should I Go For? 

It depends largely on your case. If you don’t have a lot of assets and monies, if you don’t have a lot of relatives to name for beneficiaries, then a simple will should do. 

If you have more assets and monies, then a more complicated will should be a better fit. It should make sense anyway since that you have more things to include and to think of. 

Not every will is for everybody. But there is a specific will for everyone with varying and specific assets in mind. 

When people think of wills and asset payouts, people often assume that it is done so when the will owner passed away. They will think everything will go smoothly, and that the beneficiaries will inherit the assets accordingly. Most times payouts are pretty straightforward and have very little problems. 

What if a beneficiary passed away before the will owner does? Or the fact that shortly after the will owner passed away, the beneficiaries passed away too? The circumstances may vary but the question remains. What will happen to the deceased beneficiary’s portion when he or she passes away? 

In this article, we will cover how the deceased beneficiaries’ portions will be handled if they are to pass away before the will owner does. 

How Do You Include Alternative Beneficiaries In Your Will? 

Typically in a will you are allowed to name multiple beneficiaries up to a certain number of people. It can be your immediate families and relatives, or you can also include close family friends. Sometimes, some people decide to name an organization as their beneficiary. 

If one of the beneficiaries passed away before the will owner does, the will owner can still award the deceased beneficiaries’ beneficiaries a portion of the assets and monies. The will owner can include alternative beneficiaries by using the “per stripes” and “per capita” clauses. 

By including the “per stripes” and “per capita” clauses, the will can ascertain that the deceased beneficiary’s portion of assets be given to his/her beneficiaries. The same clause will also make sure that it will not lapse and become residuary property.   

“Per Stripes” vs “Per Capita”: What Is The Difference? 

“Per stripes” allows a deceased beneficiary’s living next-of-kin to inherit the beneficiaries’ gift by right of representation. If the deceased beneficiary was promised 10% of the will owner’s assets, then they will get it. If the deceased beneficiary’s named next-of-kin is just 1 person, then the person will get the entire 10%. If there are 3 of them, then it will be the 10% divided among the 3 representatives. 

“Per capita” means distribution according to the current living beneficiaries. It means that when the beneficiary passes away, whatever he was promised will be returned to the will owner when he/she passes away. It’s to prevent any lapsing or having the property becoming a residuary property. 

If Named Beneficiary is a Child (Under 18 years of Age) Who Dies Early 

We fully understood that if any beneficiary dies before the will owner does, the money can either go to the beneficiary or be returned to the will owner. According to section 26 of the Wills Act, if the named beneficiary is a child and passes away, then the gift to the named child will not lapse. 

However there are survivorship clauses that states there should be a minimum period where a beneficiary will have to live for after the will owner’s death. Only then will the beneficiary receive anything from the will. 

Survivorship period can be anywhere from 1 day to 6 months. If the child is a named beneficiary, then the child will have to live for at least 30 days before being able to “receive anything”. But if the child dies after the 30 days period but before the will owner does, then it means that the will owner did not wish for them to receive anything from their will. 

With that being said the deceased child is still intended as a beneficiary and receive anything from the will. This is because by logic, children is not likely to pass away before an adult does for obvious reasons. It’s if the child was not born sick or with any living death deformities. But there are cases where the child is born with illness and deformities, and they will still receive assets from the will owners if they are named beneficiaries. 

Voided Portion of the Will 

If let’s say there are no “per stripe” or “per capita” clause included in the will. One of the named beneficiaries passed away before the payout. That means, according to Section 19 of the Wills Act 1959, his portion of the estate will be voided due to death. 

It can be included as part of the residuary estate and distributed according to the residuary estate clause. 

However, there are cases where when the beneficiary has passed away, he/she will still get their portion of the payout. The payout will go to the beneficiary’s estate and part of his will. That means whatever the beneficiary has received posthumously will be passed on to their named beneficiaries in their will. If there is no will left behind, the assets and monies will be distributed according to the distribution act. 

Conclusion 

Beneficiaries who have passed away before the will owner does can still receive their portion of the monies and assets. It all depends on the particulars in the will.