How Malaysian Law Allocates Your Assets If You Do Not Make a Will

Relevant law and authorities: Wills Act 1959 – s2; Distribution Act 1958 – s6; Probate and Administration Act 1959 – s16; s30.

*Statutes applicable only to non-Muslims in West Malaysia.

What is a will and what does it do?

A will is defined in s2 of the Wills Act 1959 as a “declaration intended to have legal effect of the intentions of a testator with respect to his property or other matters which he desires to be carried into effect after his death”. It mainly allows for someone to make their own decisions on who to trust to manage their estate, who to give gifts to, what each person receives and the respective proportion, as well as miscellaneous instructions on subjects like the guardianship of minor children or funeral plans.

What happens if you don’t have a will?

For those who don’t make a valid will within their lifetime, their estate will be distributed according to a set of fixed rules from Malaysian statute. Section 6 of the Distribution Act 1958 establishes both the order of priority for relatives entitled to inherit the estate and the fixed amount of the estate they will receive.

Surviving spouses, children and parents will all receive varying amounts of the estate according to the combinations of surviving relatives given in the following table.

If there are no surviving relatives in the aforementioned groups, the estate will then be passed to the next available class of more distant relatives, with the order of eligibility as follows: siblings, grandparents, uncles and aunts, great-grandparents, great-granduncles and great-grandaunts, with the estate being shared equally by all members in the eligible group.

If no eligible family members qualifying in any of the categories stipulated by the Distribution Act are surviving, then the estate would be left to the Government of Malaysia with exception of land, which reverts to the relevant State Authority.

Effects and consequences of not having a will…

There are differing legal processes for distributing estates with and without wills. When a valid will exists, the generally simpler process of probate is used through an application by the pre-determined executor named in the will. In the absence of one, an eligible family member must apply to be appointed as an administrator and receive a letter of administration.

This process generally takes longer and can potentially be more complicated for the responsible family members. The absence of a comprehensive list of the deceased’s estate or of all family members eligible to be beneficiaries can lead to a time-consuming process of tracking down missing information for the application for the letter of administration.

Additionally, as mentioned above, the standard estate allocation for those without a will is pre-determined by statute, and hence is in no way a reflection of any possible intentions of the deceased. The rules are strictly limited to legal family members and don’t consider non-legal relationships such as close friends, romantic partners who are not married, or even children who are not legally recognised (such as children born out of wedlock, step-children, or non-legally adopted children). Additionally, the significance and closeness of relationship with a specific family member is not distinguished as all family members in each class are treated equally and will share equal portions regardless of one or some of them being closer to the individual than others in their class.

Why should you make a will?

The issues caused by the intestate distribution procedure, namely the complicated letter of administration process and the strictly familial and uniform estate distribution, are essentially avoided by having a valid will.

Firstly, from the information given in the will and the simpler probate process, responsible family members could complete the whole distribution process much more efficiently and save time compared to the administration process, as well as potentially avoiding additional legal costs of a complicated administration process.

Next, wills enable freedom over personal matters after death, such as for the distribution of an individual’s estate, allowing gifts to be provided to anyone, including those outside the immediate family like close friends or charities, and in any proportion, hence allowing greater rewards to important family members.

The option to be as detailed as desired on any matter provides an extra level of tailoring to the writer’s intentions. This includes instructions for: the legal guardianship of minor children; funeral arrangements and the allocation of funds to meet those wishes; conditions attached to gifts, setting out requirements to be fulfilled before they are distributed; the purposes of certain assets, such as funding someone’s education; and the gifting of specific items of personal significance or sentimental value, rather than simply distributing a portion of their monetary value once sold.

Additionally, specific executors can be chosen based on the writer’s discretion depending on factors like relationships or trust rather than by the standard hierarchy of priority used by the courts, which stems from s30 of the Probate and Administration Act 1959 typically requiring administrators to be a beneficiary and the hierarchy of relatives from s6 of the Distribution Act 1958.

Finally, the nature of wills aims to truthfully and authentically reflect the true intentions and wishes of the writer clearly in writing. This can be crucial to avoiding potential familial disputes over speculation on the wishes of the deceased and the deservedness of the gifts allocated to each family member as a will eases this ambiguity.

Conclusion…

Without a will, Malaysian law determines how your estate is distributed through rigid guidelines under the Distribution Act that may not reflect your personal intentions. By writing a will, you get to control your estate and other personal matters, ensuring everything is carried out according to your wishes and saving your family extra stress. Ultimately, writing a will makes sure any of your loved ones are provided for in the way you see fit.

Drafted by See-Teng Wong under the supervision of Partner Patrick Tan Yan Hong.

Disclaimer:

This article is intended for informational purposes only and does not constitute legal advice. Every situation is unique, and specific legal advice should be sought based on the particular circumstances. Readers are encouraged to contact us at info@tnhlaw.com.my if they require legal advice or have any questions regarding the content of this article.