Preparing a suitable estate plan

WHILE more and more upwardly mobile professionals are beginning to draft their own wills, the vast majority of Malaysians still have not prepared a detailed, well-crafted estate plan.  

One of the major obstacles is removing the stigma attached to estate planning, as many Asians are superstitious and reluctant to dwell on the thought of death. 

Saw Leong Aun

A person’s estate may include property; investments such as savings accounts, stocks, unit trusts, jewellery and collectibles or business interests; pensions; and life insurance policies. It may also comprise assets such as cars and intellectual property or liabilities such as corporate or personal loans. 

The key to understanding estate planning is realising that you can rest assured that your family will be financially independent in the event of your passing.  

In a nutshell, estate planning allows you to decide on the people or charitable organisations that will benefit from your estate and the proportions you want them to receive.  

An estate plan should also include non-financial aspects such as appointing a guardian for your children in the event of the death of both parents, trustees in charge of the assets until the children become adults, and the person or executor who will carry out the wishes of your will or trust.  

“Estate planning fulfils several goals,” said Saw Leong Aun, chief executive officer of Rockwills Corp Sdn Bhd. 

“It gives you control of your assets, a business exit strategy if you have equity interest in a business and instructions for asset management for your family if you become incompetent.  

It also protects the assets that you leave to your spouse and children from creditors and devious persons. An estate plan will leave your assets to whom you want, when you want and however you want.” 


Understanding the Estate Planning Process  

To understand the dynamics of the estate planning process, calculate the estate duty that you may incur. A sensible estate plan can ensure your estate incurs the least possible estate duty. 

While no taxes are imposed on your estate, estate duty is derived from the fair market value of the share of the estate your beneficiaries or descendants inherit.  

Estate planning can help you minimise taxes and post-death administrative costs not only in your own estate, but also in the estates of your spouse and your descendants. 

The next step is to gather detailed, precise data on your family such as bio-data, insurance plans, income and finances, liabilities, business interests and factors that may affect the estate plan such as the age of children, involvement in charity, and retirement age. 

This information should be sorted into specific categories and the estate transfer costs should be estimated. The findings will enable you to formulate an estate plan. 

Most people appoint an experienced, well-qualified advisor to manage their estate. The advisor should also ensure your estate plan would be comprehensive enough to provide financial resources to your family, not only in the event of your demise, but also if you are disabled.  

The advisor will help you determine how your estate will be divided among beneficiaries, the timing of disbursement, and whether you need to appoint a trustee to continue managing your assets on behalf of your next-of-kin.  


Making Adjustments to an Estate Plan  

The estate plan must be updated when there are major developments in your life such as a career change, divorce or the birth of a child.  

As a general rule of thumb, you should review your estate plan once in two years. 

You should also conduct a full estate audit once in three to five years. You can seek assistance from estate planners, financial advisors and other relevant professionals such as lawyers or accountants due to the complexity of the laws relating to estate transfer.  


Writing A Will  

One of the basic estate planning tools is writing a will. A will is a planning tool for the living, not the dead. It is a written, legally enforceable declaration of how a person's property should be distributed upon his death.  

The person is called the testator while those who benefit from the will are called beneficiaries. The executor is nominated by the testator to manage the will.  

If there are beneficiaries under 21 years of age named in your will, you will need a minimum of two executors or trustees who will hold assets, invest or manage funds for the benefit of the minors. 

In your will, you should name the persons or organisations that you wish to give away your property and assets to. Two people must witness the signing of the will.  

However, in order for the person to benefit under your will, he/she must not witness the signing of your will.  

You should inform your family and your executors that you have made a will and where it is kept, or alternatively your lawyer can look after your will.  

In this case, it is important to provide your executors with your lawyer’s name and address. 

According to Rockwills Corp, most people who write wills are aged 35 to 50.  

However, more and more young executives aged below 30 are beginning to write wills, particularly in light of global catastrophes such as the terrorist attacks in the US on Sept 11, 2001, recent terrorist attacks in Asia and the threat of severe acute respiratory syndrome (SARS). 


The Merits of Having a Will  

If there is no will, your estate will be distributed according to provisions in the law and certain people who are dependent on you may not receive anything. So, writing a will ensures that your family’s needs are protected in future. 

If you pass away without making a will, your assets will be distributed according to the rules of intestacy as laid down by the intestacy law in Malaysia.  

In other words, your assets may be given to people whom you do not intend to give anything to. 

In addition, the people who would look after your estate, called administrators, may not be of your choice. 

Generally, if you are over 21 and of sound mind, you can make a will and change it at any time during your life.  

You should consult a lawyer who would be able to advise and draft a will for you.  

Your will should be reviewed when the following events take place:  

·You or anyone mentioned in the will changes name;  

·An executor or trustee dies or becomes unsuitable to act due to age or ill health;  

·Death of a beneficiary;  

·You subsequently sell or part with any property mentioned in the will; or  

· There is a major change such as when you acquire property or assets, which had not been mentioned in your will. 


Wealth Preservation and Estate Planning  

Estate planning is a lifelong process in which you assess your needs and plan for the future. It requires that you consider a wide range of legal, financial, emotional and logistical issues.  

It can be a positive experience as it involves reviewing your state of affairs and planning for your future. Although most people find it unpleasant to think about the possibility of disability or death, planning in advance will reduce distress to your loved ones and give you peace of mind since you have made sufficient preparations.  

In the event of death, failure to plan could result in your family having little control over your estate, possibly resulting in financial hardship and family disputes. In short, the consequences of failing to plan could range from inconvenience to disaster.  


  • The above views reflect those of Citibank Bhd as at the date of publication. They are intended for general information and/or discussion of the topic. They are not intended to be relied upon in any way by any investor in foreign currencies or other investment products. While every effort has been made to ensure the accuracy of the information, no liability whatsoever will be accepted by the bank or the author whether in contract, tort or otherwise, for any error of fact or omission herein which may lead to any direct or consequential loss arising from any reliance upon or use of this report. If you have any feedback on our articles, please e-mail us at cis.malaysia @  

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