Bringing your new spouse into your estate planning may be complicated. However, if you have children thrown into the mix, the matter may be a bit more complex than it seems. Understanding some of these important issues surrounding second marriages can help you with reshaping your estate plan. Here are some things to consider when you are planning your estate after entering your subsequent marriage. 

What happens to my existing will upon divorce? 

That is a valid question asked by many people after they have divorced. When you have successfully and legally divorced from your spouse, your existing will that includes them will no longer be valid. That existing will is automatically revoked upon your remarriage to your new spouse – if you ever remarry, that is. 

The only time and exception when that will “remains valid” is its inclusion of a “contemplation of marriage” clause. However, it does not mean that the will is entirely invalidated after your divorce. It just means that you will need a new will in such circumstances. 

Restriction on your spouse’s rights 

You will have substantial discretion to determine the restriction on your spouse’s rights. It may involve naming someone else other than your spouse to be the trust or trustee. You may quite likely choose one of your children to be the trustee instead of your spouse. In other options that you have, you may want to allow your spouse to receive income from the trust property but disallow them from being able to spend on the trust principal. 

If you own real estate, it is understandable that you will want to stay in the house with your spouse from your second marriage. At the same time, you may also feel strongly that you will want the house to belong to your children from the first marriage when your spouse has died. 

You can have that done by putting the estate in a trust that allows your spouse to use it but disallow them from selling it. You can also include clauses about whether your spouse can rent the house and peruse the rent income generated from it. 

Usually, it is spouses from subsequent marriages who create these types of trusts. It may or may not mirror each other. Imagine if each spouse leave their half of the house to their children, the children from the 2 different marriages may need to work out some ways to divide its values after the parents have passed on. The children may or may not know or trust each other. In such situations, it can lead to many complications in the near future. 

What can you do in such situations? 

Choose a trustee. With any trust, a trustee can have substantial authority. Trustees can help to manage the property in trust and ensure that your spouse is complying with the restrictions on their use of trust property. They can also determine whether payments to your spouse from trust funds are appropriate. 

You will understand that your spouse and children may have fundamentally different goals and needs along with conflicts that may be unavoidable. At the same time, retain a lawyer to help you make the trust documents as clear and fair as possible. In the end, the final decision is yours to make. 

Bottom Line 

Getting a divorce is already taxing enough. To have to rewrite your will to fit in the needs of your ex-spouse and your new spouse can make things a lot more complicated. To make things easier for you, appoint a trustee – someone you can trust – to manage your estate easier for you. That way some of your worries regarding estate planning will be put to sleep.

When we pass away, we tend to leave money behind for the kids and spouses. However, there are some cases where people do not want to leave money behind for their spouses. They want their money to go to their kids entirely. They just cannot accept leaving behind money for their spouses. 

The reasons for such cases are many. It is not surprising, however, as it’s a lot more common in Malaysia than we think it to be. Usually, when a spouse has passed away their surviving spouse will get a cut of the money left behind. However, can you not allow your spouse to have any of that money? 

The quick answer is yes. You can leave all your money to your kids in its entirety. You don’t have to include their spouses if you wish to also. However, it’s leaving it all to your kids and not letting their spouse get it is what matters. Here are some ways you can make sure your kids get the money and not their spouses. 

1. Have a trust ready and in place 

Perhaps the easiest way to shield your assets and have your kids enjoy them is to have a trust in place. In your trust, mention that you will want all your assets (including your money) to go to your kids and only your kids. 

You can mention in your trust how your assets are to be divided. Direct your appointed trustee how much the income and principal should be distributed to your kids. However, note that you cannot entirely exclude your spouse entirely from the trust as it can be contested. The reasons can vary. 

One way to minimize your spouse’s access to your child’s money is to have the trustee pay the expenses on your kids’ behalf. Meaning to say, instead of having your spouse having direct access or having a direct hand in your kids’ money, your appointed trustee will handle everything on your kids’ behalf instead. That way your spouse will have no way of having a hand in your kids’ assets. 

2. Getting your kids to do a financial test 

Here’s something you can consider. Before giving your kids the money after you have gone, consider giving them a financial literacy test. It may come across as tacky and weird. However, you may be surprised by the results you get in the end. 

The reason why we brought this up is that parents often give their kids without seeing how they use it. Who knows if your kids are not the smartest type and could be manipulated by their spouse? You wouldn’t want that to happen, do you? 

3. Give something that is not cash 

Instead of giving cash to your kids, which could be directly used by their spouses, why not give something else instead? Like assets and mortgages for example. If you give cash, their spouses may use that money on something else. It’s quite likely their spouse may take that money and use it for themselves instead. 

With non-cash assets, the spouses may not have a hand or say in it. Since that the entire asset goes to your child’s name and not their spouses. 

4. Have your children set up their own wills and trusts 

Perhaps this is the other way of preventing your children’s spouses from getting your assets meant for your kids. In all honesty, when you are gone and your assets given to your kids, your assets will most likely become marital assets when it falls into your children’s hands. If you do not want this to happen, then have your kids do their own wills and trusts for themselves and their kids (if any). 

As much as it sounds crazy and chaotic, then this is perhaps the other best step to solidify your assets’ future. It does make you and your child sound irrational. However, if it works then it works. 

Key takeaway 

Not wanting your kids’ spouses to have a hand in your assets may come across as crazy. However, if you really do not trust your children-in-laws, then perhaps some of these things listed above can help prevent them from getting your assets. 

As NFT is becoming more and more popular, more Malaysians are investing in NFTs every day. However, NFTs are relatively new in the Malaysian market, therefore not many know about what they can do with it, especially whether it can be inherited. 

If you have NFTs to your name and have earned a sizable income from it, can you put it in your wills? Can it be part of your estate planning? Find out more in this article. 

What is NFT? 

NFT is an acronym for Non-Fungible Tokens. It is a kind of digital asset. They are held in digital wallets like how cryptocurrencies are. Cryptocurrency can be considered as an NFT too. 

NFY can include digital and online assets such as photos, videos, audios, artwork, gaming tokens, or any sort of digital files. So how are these digital assets created? 

NFTs are created on a blockchain, which is a growing list of records. These records are called blocks, which are linked together using cryptography. 

Each block has a cryptographic hash of its previous block, a timestamp, and a transaction data. The timestamps are used to prove that the transaction data exists when the block is published in order to get into its hash. 

NFT does not contain the intellectual property, photo, videos, etc. It’s referred to the intellectual property. The original creator promises that work is either unique or they are only going to create a limited amount of it. 

For example, a creator says they will create only 10 of the artwork. You buy one from this creator and own, let’s say the 7th piece in the 10 piece artwork. Each of these NFTs have its own address. If you have the address and access to it, then you own the NFT. NFTs also contain a smart contract. That means when the artwork is sold, they will get a certain cut of the profit when their NFT has been sold. 

Why do people create, sell, and/or own NFTs then? 

It does get very confusing when it comes to NFT ownership and creation. However, let’s put this in an analogy so everyone can understand it better. 

Take rare collectible cards and autographs for example. Items such as these are rare and close to inaccessible worldwide. Only a few people have them in physical copies. That means these items will fetch a high price if whoever have them want to sell them. 

However, with NFTs being around, it means it can take this concept of uniqueness and apply it to digital works. It gives NFT owners a great way and method to sell and monetise their digital works. 

The scarcity that was created through the NFT makes the digital work even more valuable. It can easily lead to more profits for the people who have created it. It’s the same for people who buy and sell NFTs. 

How do NFTs and estate planning tie in together then? 

Having said all of that above, I think you’d have a clear basic understanding of how NFT works. You may or may not own many valuable NFT assets in your lifetime. If you do, then this is for you and you should start seeing how you can protect it. You can also see how you can leave it behind for your next-of-kin when you are no longer around. 

The first thing you should do is to have your NFTs placed in your wills and trusts. Update them periodically if you have to. In your will, mention how it will be divided up between your beneficiaries. Say how many percent your beneficiaries will get from the proceeds generated from your NFTs. 

When you are done updating your wills and trusts for your NFTs, your next obvious step is to mention how to access your NFTs. You can put in place a list of locations where you have stored your NFTs. Then list the login details and keys to your NFT accounts. 

If it makes anything easier you can also include a step-by-step guide to help your beneficiaries access your NFT accounts. Get a lawyer to help if you need any guidance too, if that makes things easier for you and yourself. 

Key Takeaway 

If you need any assistance in NFTs and will planning, feel free to talk to us. We can help you with estate planning and wills. If you own NFTs and wish to put it in your will, we are here to assist you.

However, have you ever thought about what will happen to all that money you’ve made in crypto when you have passed away? Where will it go when you are no longer around? Who can lay claim to your crypto assets when you are dead? 

Everyone knows that when you have passed away, your assets and properties will go to your next of kin in Malaysia. Whether you have a will or not, your next of kin will get it regardless of how long they have to wait for it. The only difference is whether you have a will and/or will or not. 

For crypto, it works almost similarly. Read on to find out more about where your crypto will go when you have passed away. 

Having a will 

Having a will can make things easier for you when you have passed away. If you have one, you can put in whatever assets you have there. When you have passed away, your named beneficiaries will get a cut of that distribution. That’s how wills work, generally. 

It’s the same thing here with cryptocurrency. You can list your crypto in your wills so when you’ve passed away, your beneficiaries will get whatever profit your crypto is valued at that point in time. 

It’s said that there are billions of dollars worth of unclaimed crypto assets left unclaimed according to this article by New York Times. 

In order to include your crypto in your will, it’s best that you include the private keys to your crypto in it. Let your lawyers know where you keep your cryptos and how you store them. Do you store them in cold wallets or hot wallets? Because those 2 wallets have different ways of accessing your cryptos. 

Prepare a set of instructions for your next-of-kin for inheriting your crypto assets 

Not everyone is tech-savvy, including some of your family members and relatives. What that happens, it’s quite likely they have no idea how to access your crypto accounts to get the money you’ve left behind. 

With that in mind, a lot of people are advised to leave behind a set of instructions for their non-tech-savvy family members. List down a detailed list of instructions for your relatives and family members on how to withdraw your crypto money at a later date. They will thank you later. 

Some people leave instructions in a notebook and stash it away in a safe space. In your instructions you should have the following vital information: 

• Where you store your cryptocurrencies
• The passwords and keys to your crypto wallets and accounts
• Get and assign a digital executor to delegate your crypto
• List your crypto assets in your will and specify who gets what 

Is crypto subjected to the same foreign asset tax treatment in Malaysia? 

This is a common question asked by many crypto miners and is a valid one at that. In some countries like Australia and the UK impose capital gains taxes on cryptocurrencies. Malaysia does not, apparently, according to The Malaysian Reserve news published on LHDN’s website. 

In summary – the article says that cryptocurrencies are volatile and unstable. It’s not a controlled currency like your typical MYR, GBP, USD, etc. That means no countries control cryptocurrencies, making it not recognizable as a legal tender currency anywhere. Not officially, at least, though there are some stores that accept crypto as payment. Therefore, cryptocurrencies are not taxed in Malaysia for now. 

Conclusion 

Cryptocurrencies may not be recognized by the Malaysian government. However, it does not stop Malaysians from trading it online. Just remember that you have everything prepared and listed in your wills – while you are alive, of course. Don’t wait till it’s too late and when you have passed away. If you have, your next-of-kin will have a hard time trying to retrieve your profits when you are no longer around. 

The choice of the trustee in any wills is crucial, if not life-changing at that. Oftentimes, people may think that choosing a trustee is an easy task. However, it is not as easy as it seems to be. 

Choosing the wrong trustee may bring you a lot of headaches. They may or may not follow through with your final wishes when you have passed away. Sometimes, they may not be located even when you are no longer around. 

Therefore, it is important to understand who your trustee is and the types of trustees available before you choose one.

Types of Trustees 

What people don’t know is that there are different types of trustees. There are professional trustees and family trustees. 

Professional trustees are usually trustees from a professional trust firm. They are usually well-trained in being a trustee and how to handle a myriad of problems surrounding a trust. There are trust companies, bank trustees, and attorneys. 

Professional trustees are good for businesses and companies. However, there are some people who use a professional trustee for their own personal wills too. Professional trustees’ line of work is diversified. It’s not limited to just one area. 

Family trustees are where people choose family members (usually) to be their wills’ trustees. Sometimes they may appoint a close family friend or relative to be their trustee. One good thing about getting a close family friend or a family member to be a trustee is that they know and care about the beneficiary personally. If you have a beneficiary who has special needs, then these family members appointed trustees are a good fit for the role. 

Sometimes, some people think that appointing a professional trustee may not be sufficiently good enough. They may also have the same thinking towards a family trustee. If that’s the case, they can choose to appoint co-trustees. 

Co-trustees are where the person appoints a family trustee and a professional trustee in place. They can get the best of both worlds. 

Qualities and Skills a Trustee Should Have 

After you know the different kinds of available trustees, do you know what skills and qualities a good trustee should have? Here are some skills and qualities they should have. 

1. Skills 

They should have the following skills: 

1. Legal skills
2. Accounting skills
3. Investing skills
4. A solid understanding of the will owners’ intentions. They will also need to know the needs, strengths, and weaknesses of the beneficiaries
5. Independence and objectivity when handling the will 

2. Qualities 

Here are some of the best qualities a trustee should have: 

1. Trustees should make sure that the funds in the trusts are invested properly and wisely. They should have wise regard to the timing and amount of distribution made from the trust.
2. Any trustees should make sure that the investment policy will preserve the assets. They should also make sure that the investments made by the beneficiaries are in the best interest of current and future beneficiaries.
3. Trustees should ensure that the trust will meet both the terms of the law and of the trusts.
4. Trustees should make sure that they maintain good records of the trust. If they see any inappropriate issues, they should report it at once to the interested parties.
5. They should also administer and distribute the assets and monies in the most tax-efficient manner possible. 

Bottom Line 

Having said all of that, it is important that the trustee’s role should fit your specific needs. Find one that synergizes well with you and your beneficiaries.