Some people think they do not need to write a will because they do not own property or are not rich. While this perception isn’t wrong, in many cases you will find you have assets in your name, such as a savings or fixed-deposit account, unit trust investments, a car, or a share of the house.
In truth, writing a will becomes even more important if one is not wealthy but has dependants. You would want them to receive your assets quickly and with minimal hassle, especially if it is money in the bank.
Insurance and EPF laws allow for the nomination of beneficiaries, but other assets are left unprotected. And if your beneficiaries are minors, you have to appoint someone trustworthy as a guardian to look after their welfare.
Issues to consider
If a single person dies without a will, the estate goes to his or her parents. If the parents have also already passed away, then it will be divided equally among the deceased’s siblings.
If there is no such category of survivors, the estate will be inherited by the following beneficiaries in order of priority: grandparents; uncles and aunts; great-grandparents; great-uncles and -aunts; and the government (for non-Muslims in peninsular Malaysia and Sarawak).
When it comes to handing over the belongings of a deceased individual, time and effort will be required to compile the necessary documents to apply for a letter of administration, and to file them with the appropriate authority such as the high court or probate office.
Then there is the question of who will carry on with monthly loan repayments while the estate is being administered. The deceased’s bank account will be frozen and, after a few months of missed payment, the bank will consider the account non-performing and can exercise its right, as per the loan agreement, to repossess or auction off the assets, as the case may be.
Here are four more reasons why one should have a will:
1. Appoint one’s own executor
When a person dies, no one can legally act on his or her behalf. With a will, a dependable person or trust corporation can be appointed as the executor.
Without an executor, consent is needed from all the deceased’s lawful beneficiaries before an administrator can be appointed to handle the estate, thus delaying the whole process.
2. Complete the process
It is important to ensure one’s assets – insurance, unit trusts, shares and property – are passed down to one’s beneficiaries in an efficient manner. Writing a will would complete the picture.
3. Unlock frozen assets
A will would speed up the process of unlocking frozen assets. The letter of administration can be issued without the need for an administration bond and sureties.
4. Enjoy peace of mind
Enjoy inner peace knowing you have left instructions and that the welfare and interests of your beneficiaries will not be compromised.
Lee Khee Chuan is a Securities Commission and Bank Negara-licensed financial advisor who has been practising estate planning for over 17 years. He also researches and writes extensively about the subject, besides lecturing for the Certified Financial Planner certification programme.
For more information, visit www.estateplanningmalaysia.com.