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With sky rocketing property prices in Singapore, many Singaporeans have moved their investment into Malaysia properties.

malaysia-property

But when you own million dollar property assets in Malaysia, have you ever thought about this question:

“What will happen to your Malaysia properties if you die?”

Inheritance Laws in Malaysia

Previously, I talked about How are assets distributed if a person dies without a will in Singapore. Although Malaysia is also a common wealth country, the intestacy law is slightly different. For example, under Singapore law, surviving parent(s) will not receive anything if the deceased leaves surviving spouse and children, but parent(s) will be entitled 25% in the same situation under Malaysia law.

Many Singaporeans have “invested” millions of dollars in Malaysia properties with their spouse, parents and even friends. If not careful, the distribution under the law may be very undesirable to the deceased’s family.

For West Malaysia and Sarawak, the law governing the distribution of estate upon intestacy is the Distribution Act 1958 (Amended Act 1997). However, this law is not applicable to Muslims and natives of Sarawak.

INTESTATE LEAVES SURVIVING

ENTITLEMENT TO ESTATE

Spouse

Parents

Issue

Spouse

Parents

Issue

Yes

No

No

100%

No

No

Yes

100%

No

Yes

No

100%

Yes

Yes

No

50%

50%

Yes

No

Yes

1/3

2/3

No

Yes

Yes

1/3

2/3

Yes

Yes

Yes

25%

25%

50%

Issue refers to children and descendents of children

If a person passes away without a will and do not have any surviving spouse, parent or issue, then the following will  have priority:

  1. Brothers / Sisters
  2. Grandparents
  3. Uncles / Aunts
  4. Great Grandparents
  5. Great Uncles / Aunts
  6. Government

Prolonged Process of Asset Administration

When a person passes away without a will, an administrator must be appointed and every beneficiary must agree to the appointment and renounce their rights to petition. This can at times be a problem when the beneficiaries cannot agree on whom should be the administrator. This dispute can sometimes turn into a legal suit that can drag on for many years.

Even if all the beneficiaries agree to the appointment of the administrator, the administrator has to find two sureties. The purpose of the sureties is to protect and secure the creditors and beneficiaries against losses caused by the improper administration of the estate. These two sureties must have assets equivalent to the value of the deceased’s estate and will stand guarantee in the event that the administrator runs away with the deceased’s assets.

Most of the time, It is almost impossible to look for two sureties, especially if they were have to guarantee million dollars for the properties.

You can easily understand how badly the whole process will be delayed, not to mention the additional hefty legal fees involved.

There are many other factors to be considered such as Foreign Investor Scheme restriction to the beneficiaries. I will discuss them in another post.

In a nutshell, if you are buying a million dollar property in Malaysia, invest a couple of hundred dollars in a will and it will save your family the day. Contact me if you need will and estate planning services.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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