Personal finance matters are not just confined to managing one’s savings or investments, but includes passing on the inheritance assets
by SHAHEERA AZNAM SHAH/ pic source: www.rockwills2u.net
WHEN it comes to personal finance, Malaysians reportedly have been inadequately informed about managing their finances.
According to a recent Credit Counselling and Debt Management Agency survey, one in three Malaysians admits to being ill-informed of financial management matters.
Personal finance matters are not just confined to managing one’s savings or investments. It also includes passing on the inheritance assets after one’s demise.
A will should be drawn up to ensure the assets or property be distributed among the intended beneficiaries in a manner prescribed.
For Muslims, inheritance is governed by the Probate and Administration Act 1959, while non-Muslims’ inheritance is governed by the Distribution Act 1958 and Inheritance (Family Provision) Act 1971.
If the deceased does not have a will, the assets left behind will be instantly frozen indefinitely and not be transferred to the appropriate heirs.
In 2016, it was estimated that RM60 billion worth of frozen assets comprising properties and cash remained unclaimed.
Statistics by Life Insurance Association of Malaysia revealed that RM64 million was submitted by its members to the Registrar of Unclaimed Money in 2016.
Why Write a Will?
Writing a will has many advantages as it acts as a contingency plan in case of an unforeseen circumstance.
A will is needed to make the process of transfer of the assets and properties to be legally recognised.
In Malaysia, there are several types of will that are accepted by the legislative bodies, including wasiat, which is an Islamic-written will where a Muslim can make in declaration during his or her lifetime.
According to Rockwills Corp Sdn Bhd, the largest writing company in Malaysia, the law will decide the beneficiaries, trustees and guardian of the deceased in the event no will is made.
Family members of the deceased could also be tangled in a long-drawn legal battle for the assets when there is no will.
How To Do a Will?
In writing a will, one must determine the assets involved in the distribution, including properties, bank accounts, businesses, jewellery, vehicles and other valuables items.
It is important to provide proof of ownership to the assets with supporting documents.
Once the assets have been identified, an executor, who can be more than one person, has to be named to manage the assets.
When the foundation has been laid out, it is imperative to name the specific beneficiaries who will inherit the assets.
As one tends to leave all of their worldly goods to their children and other family members, there are also parties who choose to leave their assets to charitable organisations.
There are several ways to conduct will writing. The easiest option is to hire professional legal firms or companies that offer a will writing service.
It may be a costlier method, but it will give one peace of mind compared to a do-it-yourself will.
Some financial institutions, such as Malayan Banking Bhd (Maybank), offer an online will writing service for a fee.
The online service will allow for a quicker and more affordable process than the conventional service approach.
In the case of Maybank, the service can be accessed through its banking portal for the benefit of its existing customers. The service caters to two types of will, a conventional document for nonMuslims and wasiat for Muslims.
Muslim applicants have an option to distribute assets according to the Islamic Inheritance Law known as faraid or based on beneficiaries personally defined by the customers.
The will maker can distribute up to one-third of their assets to beneficiaries not covered under the faraid.
The service is available for all Malaysians of 18 years old and above, are residents of Peninsular Malaysia and Sarawak, and 21 years old and above for residents of Sabah.