THE BORNEO POST with the expert help of Rockwills Trustee Bhd, the leading specialist in estate planning having pioneered wills and trust 27 years ago, is publishing a regular Q & A column on estate planning. It will feature questions which readers have in mind but don’t know who to ask.
Question 1: I have a friend who does not like to be tied down by a long-term relationship even though he is already in his 50s. For all I know, he does have children with different women. What happens to his assets when he passes away? Will those women and their children inherit the assets he left behind?
Answer: If your friend passed away without a will, his assets will be distributed according to Distribution Act 1958 where only his legal spouse, children and parents are entitled to inherit from his estate.
Assuming he never married any of his lovers, none of them will receive anything from his estate. However, things will be different for his children. The recent case from Federal Court now allows illegitimate children (or commonly known as children born out of wedlock) to inherit the estate of their biological father. Therefore, the children will inherit your friend’s estate equally.
The question is whether your friend intend to have the children inherit his wealth.
If he does not want any of them to inherit his wealth and intend to pass it on to another person, he will need to have a will prepared to name the person to benefit.
If he does not leave behind a will, his children will inherit as mentioned above.
If your friend would like to distribute specific assets to different children, he would need to prepare a will. This will prevent family contention when he leaves behind clear instructions who is to inherit his wealth. As a result, it will prevent fragmentation of assets when your friend segregates different assets to be given to different children.
Without a will, all these children would share the ownerships of properties which requires every one of them to agree for any sale or rental. Some of them may even demand to reside in the properties without paying rent. If you friend owns a business, the ownership will certainly be fragmented. As the children did not grow up together, it is very unlikely they can easily come to agreement to deal with the properties and business.
The problem will be compounded when the children have their own children. Asset ownership will be further fragmented possibly causing more and more difficulty and disagreements among them.
Question 2: I am from Denmark, currently working in one of the oil and gas companies here in Sarawak for several years, hence my EPF account has accumulated to a sizeable amount. I was being told that I cannot do any nomination because I am a foreigner. What can I do with it?
Answer: You can write a Malaysian Will to give away the monies in your EPF account to your beneficiaries. Your beneficiaries may be residing in Denmark or residing in any part of the world. Your Malaysian Will can include other assets you have in Malaysia such as your property, bank accounts and business.
You should also have a Danish will to distribute assets there to your beneficiaries.
With separate wills, the respective executor named in the Wills, would be able to apply for Probate in each country at the same time. Without separate Will, your Danish Will executor would firstly have to obtain probate in Denmark before obtaining a separate probate in Malaysia. There will be delay and it can be very costly.
We advise you to engage an experienced estate planner for this so that your assets can be well planned.
This Q&A Column in published as a joint public service and educational initiative with Rockwills Trustee Bhd. Please email your questions related to estate planning to [email protected] or Rockwills’ training and business development assistant general manager Sam Chan ([email protected]).