Will writing in Malaysia: What you should know about estate planning

A will is an important part of estate planning – it is necessary for deciding who gets what assets and also for making sure your loved ones are not left to deal with laborious paperwork and legal processes.

Will writing is still a relatively taboo subject in Malaysia because it is associated with the death of a person. Nevertheless, a will is extremely important to ensure that your property and assets go to specific persons, instead of being decided by Malaysia’s inheritance law. Known as the Distribution Act 1958, this inheritance or intestacy law is for non-Muslims. In this article, we will detail all you need to know about will writing and estate planning in Malaysia.

What is a will?

A will is a document that lists out how a person intends to distribute his or her assets upon death. It is an essential part of estate planning, allowing you to make advanced distribution planning for all the assets you own to the people under your care when you die.

What is the Wills Act Malaysia?

In Malaysia, all matters related to wills for non-Muslims are governed by the Wills Act Malaysia 1959 while a wasiat for Muslims is governed by Islamic Law. Some states in Malaysia do have their own State Ordinance governing the wasiat.

The Wills Act states that a will is “a declaration intended to have the legal effect of a testator’s intentions concerning his property or other matters which he desires to be carried into effect after his death…”

The Act says that a will includes a testament, a codicil (a supplementary document with modifications to your last will) and an appointment by will or by writing. Besides the distribution of assets, guardianship or custody of a child can also be included in a will.

What is an executor of a will?

The executor is the individual appointed by the person making the will, also known as the testator – to administer and manage the distribution of assets.

According to Rockwills Corporation Sdn Bhd Assistant General Manager (Franchise Development & Training) Sam Chan, the appointment of an executor is important as he is the one you will rely on to carry out your will instructions. The person will have to manage all matters related to taxation, financial and legal matters of your estate.

“We would suggest our clients appoint a licensed trust company that specialises in estate administration services to serve as the executor. When the executor is an individual, some causes of concern include:

• The individual would likely not know what needs to be done as an executor
• The individual may act for his interests rather than for the interest of the estate and beneficiaries.

You may think by appointing a beneficiary to be an executor is a good choice as he/she will be willing to carry out the task, but the concerns mentioned above cannot be discounted,” he said.

What is a beneficiary of a will?

A beneficiary is a person named in a will to inherit all or part of the assets of the testator.

Why is a will important?

By having a will, you can have peace of mind knowing that you have properly planned out the division of your estate and that your executor will have an easier task of distributing the assets to your loved ones.

Simplifies the distribution of assets

Having an appointed executor will make the process of distributing your estate much easier. The executor will need to apply to the High Court for a grant of probate (GP) to be authorised to act.

In the absence of a will, the process becomes a bit more complicated. The family of the deceased will have to unanimously decide on an administrator before applying for a letter of administration (LA). Appointing an administrator (among inheriting family members) is often tricky and a lot of drama can ensue during this process.

If the assets of the deceased are worth more than RM50,000, then the family will also need to find two people to act as sureties. A surety is a person who serves as a guarantor where he or she provides an administration bond of the same amount as the gross value of the estate. The administration bond acts like a security that can be used to compensate damages or losses incurred due to the negligence or fraudulent acts committed by the appointed administrator.

“The beneficiaries will have to trust that the administrator will carry out his or her duty of distributing the assets fairly and in accordance with the law. For example, the bank will release the whole amount from the deceased’s bank account to the administrator,” said Chan.

In the event that the administrator decides to use the monies/assets for his own gain instead of distributing them to the beneficiaries, then the beneficiaries could sue the administrator to recover their share. However, if the amount involved is small, the legal tussle would not be worth the time and money,” he added.

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You can make very specific arrangements

You can decide what goes in your will and who gets exactly what – leaving no room for any disputes. If you want to leave your assets to non-family members or even to charities, you can do so in your will. You can also make arrangements for the guardianship of young children and be assured that they will be taken care of by a person you have chosen.

What happens if I pass away without a will?

If you die without a will or die intestate in Malaysia, your assets will be distributed according to the Distribution Act (amended in 1997) if you reside in West Malaysia and Sarawak. Meanwhile, the Intestate Succession Ordinance 1968 will apply to those living in Sabah.

When you do not have a will and you have minor children with no surviving parent, then you will have to rely on the goodwill of your relatives to apply to the court to be the guardian for your young children. This can be avoided by having a will in place, where a guardian of your choice can be named.

Take note that your Employees Provident Fund (EPF) payments and insurance policy benefits will not follow the distribution formula under the Distribution Act 1958.  Instead, it will go to the persons you have nominated in the respective accounts. Only if you did not nominate anyone prior to your death, will it follow the formula above.

Chan said that while the Distribution Act 1958 ensures that your estate will be distributed to your family members, how they are distributed might not be very practical. “Let’s say a deceased person has four children and four properties. If he did not leave a will, then each property will be split between the four children and this can lead to complications in future. If he left a will, he can leave one property to each child,” explained Chan.

In Malaysia, Muslims and non-Muslims are governed under different sets of inheritance laws. To find out more about Islamic inheritance laws, read What happens to your property if you die without a will in Malaysia.

How to write a will in Malaysia?

So how is a will executed in Malaysia? Under the Wills Act Malaysia 1959, the following conditions must be met:

• The testator must be at least 18 years old but for Sabahans, the testator must be at least 21 years old under the Sabah Wills Ordinance
• The testator must be of sound mind at the time of signing the will
• The will must be made in writing and signed.
• The signing must be in the presence of two witnesses and they must also sign the will in your presence.

There are several options that you can consider for drawing up a will.

Hire a lawyer

Most law firms will provide will writing services.

Professional estate planners

There are professional estate planning companies that specialise in will writing, such as Rockwills. These companies often also provide trustee services, which means that they can hold and administer your assets for you. For example, you might need a trustee to administer a property until your children turn 18 or you need to set up a trust fund to pay for your children’s education.

There are also individual estate planners who can help you write a will.

Banks

Many banks in Malaysia also provide trustee services, including will writing, either in person or online, among them:

• Maybank (done via the online portal)
• Public Bank Trustee Services (done in person and available at Public Bank branches)
• Hong Leong Bank (online or in-person)
• RHB (in person)

Amanah Raya Berhad

Amanah Raya is a government-owned trustee company and offers a range of trust, will and estate services.

What do you need to prepare to write a will?

Writing a will sounds like a big undertaking but Chan said the only document you need is your identification card (IC).

“There’s no strict requirement on what you need for a will. You don’t even need to show us your land title or any such documents,” he said. However, he suggests these basic things to consider:

1. Decide who to appoint as your executor.
2. Decide on the two witnesses (they cannot be one of your beneficiaries or married to the beneficiaries as they will lose their inheritance).
3. Prepare a list of your assets (basic information like the address of the property, bank account numbers) and any specific instructions you might have for each asset.
4. Have the name and details of your beneficiaries ready.
5. The estate planner or lawyer will draw up the will for you to sign. Both witnesses will have to be present when you sign your will and must also sign the will in your presence.
6. A will does not need to be stamped in Malaysia.

Can you name someone as a beneficiary if you do not have their details?

“You can name a beneficiary without their details as long as the person can be identified with the basic information that you provide. If a testator names his son John without providing details like IC number, it is still acceptable because it is not likely for the testator to have more than one son named John.

“However, if the testator lists a friend named John as a beneficiary without providing his full name or a home address, it will be quite challenging to determine for sure who this person is,” Chan explained.

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Can a person have more than one will?

Chan explained that a person can only have one will within a jurisdiction (one will in one country). “If you have assets in different countries, you can have a will for each country where you have assets. We do advise our clients to do that because with a separate will it will be faster and easier to get a court order to transfer assets in those countries. We can help them draw wills for countries such as Singapore, Australia, New Zealand, UK, Vietnam and China – these locations are where many Malaysians usually own property,” said Chan.

When is a good time to write a will?

Ideally, anyone above 18 years old who wholly owns any property or asset should have a will but the reality is that only about 1 in every 10 people have a will.

“These days, it is not so much due to the taboo around death but more because people procrastinate. People will only think about wills when something happens, like when a person is on their deathbed.

“We received a lot of enquiries during the COVID-19 pandemic from people who want to prepare a will for someone who is in the ICU on ventilators. At that point, is that person still considered to be in sound mind to prepare a will?” said Chan.

What should be in your will?

While there are no strict requirements on what you need to include in your will, Chan said that the more information you can provide and include in the will, the easier it will be for the executor. “Remember that the will is not for you but for the people you are leaving behind. Putting in very specific distribution instructions will also help to avoid confusion and conflicts.

“Most people think that they are being fair by evenly distributing all their assets but that is not necessarily true for all situations. For example, if a client evenly distributes his company shares to all of his children when in reality only one of them has been helping him run the business, it could cause resentment,” he said.

Some of the usual items included in a will are:

• Property such as houses, condominium units or commercial units. If you have several properties, it is better to list down the address of each unit so that your executor would not have to waste time getting the details.
• Cars (provide car registration numbers)
• Bank accounts (provide bank account numbers)
• The distribution and beneficiaries of all these assets
• A guardian for your children
• Residuary clause for any items that might have been overlooked
• An alternative executor in case the appointed executor does not survive you
• An alternative beneficiary for your EPF and insurance policies in case your named beneficiary does not survive you

Chan said that people can also set up trust funds for things like children’s education fees or monthly expenses.

Here is a sample of a will from Tokio Marine.

Can you write your own will in Malaysia?

The Wills Act Malaysia does not specify who can prepare a will so yes, you can write your own will. Chan said this option works best for those who do not have many assets and have fairly straightforward distribution instructions to only a few beneficiaries.

“There are many situations that people overlook or forget to consider, for example, what if the executor passes away before you do or what happens if your children are still below 18 years old when you pass away? If you want to make sure that you do not leave anything out, it is better to hire a professional estate planner. Some estate planners like Rockwills also have a trusted service, so they can make all the arrangements for you,” he said.

To write your own will, you need to prepare the same things as someone who is hiring a professional estate planner as mentioned above. These include your IC, two witnesses and a list of assets you would like to include in your will.

Instead of creating one from scratch, you can look for a template online. Do a search with the keyword “will template” and you will find that there are many templates available online, such as this one from Halim Hong & Quek.

There are also some free online will writing services where you need to key in your information on their platform and a will is generated for you. As with all services that require you to provide information online, be sure that it is trustworthy and secure because you are providing sensitive information such as your IC number and those of your witnesses, executor and beneficiaries.

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How much does a will cost in Malaysia?

The cost of writing a basic will (both in-person and online) ranges from RM250 to RM500.

Contrary to what most people believe, Chan said that the cost of the will does not depend on how many assets a testator owns. Rather, it depends on the complexity of the distribution and in the case of trust services, how long the service is needed.

“At Rockwills, our fees start at RM480 and are capped at RM25,000. Generally, most of the wills will cost around RM1,000 because testators would want to specify the assets they have in their will,” he explained. To make sure that your loved ones are taken care of when you pass away, a will could be the best gift you are leaving behind for them.

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