What Is Estate Planning And Why Everyone Needs A Will In Malaysia
Inevitably, we will bite the dust and join the earth someday. Not all at once I hope, but everyone has their own time. But what happens when we die? What happens to our assets? The house(s), the car(s), land(s) and money. That is where estate planning comes in. Estate planning is a series of procedures arranged which helps to overlook one’s assets in the event of his/her death. All these procedures include setting up the next of kin for the passing’s assets and settling taxes. All these can be done by hiring a suitable attorney that is experienced in estate law.
To break it down, estate planning includes arranging how one’s assets would be distributed (to the next of kin) and managed after his/her death. Estate planning also considers overlooking one’s financial obligations in the event he/she is incapacitated. More to the list of assets would be stocks, valuable paintings, pensions and ever more so, debt. One would consider estate planning to ensure that their family would always be provided and covered for in the event of their untimely death. Some may want to preserve their family’s wealth while others want their assets donated to the unfortunate.
The foundation to all estate planning involves writing a will. Now I am sure you’ve heard what wills are for. If you haven’t, give me a second I’ll cover that in a jiffy. For now, some other estate planning objectives include reducing estate taxes by arranging trust accounts in the name of the next of kin (beneficiaries), setting up guardianship for your children/grandchildren/pet, placing someone as an executor of the estate to manage the terms of the will, managing durable power of attorney (POA) to direct other assets if need be and many more.
Okay, now for Will. Why do you need one? Just in case you die, of course. Then at least your assets will go to YOUR next of kin. A will documents what the late person wants to do with his/her property when they die. A will only takes into effect after the writer a.k.a. the testator, dies. The testator can also reverse the will any time prior to their death. Obviously. So by having a will, you can decide how and to whom your estate will be distributed to. If one dies without a will, there will be little to no chance that your ‘last wish’ will be carried out. Having a will helps, ESPECIALLY IN MALAYSIA, to minimize family fights that can, may, and surely will occur over your assets.
Before we go over the next point, touch wood. Done? Alright, so in the case of your untimely death you leave behind children who are minors, a will allows you to arrange and fix your children’s next guardian. If you have not written a will, the court will arrange a guardian from your pool of family members. If none are deemed suitable (which is unlikely the case in Malaysia), he will be sent to foster care or orphanage. So, better have one ready. And a good one.
If one doesn’t already have a will and unfortunately passes on, all his/her estates will have to go through a VERY lengthy probate process. What is that you may ask? Simply handling the legal documents of one’s estates, name transfers, and so on. When one dies without a will, the probate court takes it upon itself to administer, handle, and manage your estates, which is one hell of a long process accompanied with unnecessary delays. Ergo, you need a will to save time for your next of kin. After all, Malaysians are rather impatient, aren’t we?
By having a will, you can allow someone else to inherit your estate by law. Many Malaysians are probably unaware that they can disinherit individuals. To put it simply, I have a Ferrari that will go to my wife when I die. But, we recently got a divorce. So I will let my new wife inherit my Ferrari when I die. Get the picture? Wills will explicitly state in black and white how and to whom your estate will be distributed. You wouldn’t want your ex-wife driving your Ferrari would you? Then, get a will.
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