What is Estate Planning?
An estate plan is a written expression of how you would like your assets to be owned, managed, and preserved during your lifetime and how you want them to be disposed of upon your death.
It is a common misconception that estate planning is important for only those who are wealthy or advanced in age. Unfortunately, this is simply not the truth. In Malaysia, if you are a property owner, your children or family could be subject to probate. By planning your estate in advance, you would possibly save your loved one months, if not years of agony and literally thousands of dollars in court fees and/or estate taxes.
Arranging for the distribution of one’s wealth is what estate planning is all about. An essential part of estate planning is creating documents that outline your wishes for distributing your assets upon your death. Each individual must have an estate plan. If you do not have a formal written will or trust, your estate plan is created by default by the government. Every country has their own laws governing the distribution of property in the absence of a will or trust upon one’s death. If you have not made any plans for the distribution of your estate before you pass, your estate would be distributed according to your country’s “intestate succession” statues (Distribution Act 1958 – amended 1997) which aids the distribution of your estate to your spouse and relatives in the order established by your state’s law. Therefore, the question is not whether or not you will have an estate plan, but whether you will have an estate plan of your own selection or one imposed upon you by the law.
Unfortunately, many people have neither a will nor a trust, which would help identify their intentions and desires after their death. They become so involved in their daily activities that they give little thought to the consequences of their demise. However, many people do realize the role played by estate planning documents in the protection of their dependents, as people often die prematurely, causing their dependents to become unprotected. Families can be financially devastated and ripped apart due to this procrastination.
So, as has been discussed before, your choices for estate planning are as follows:
- Doing nothing
- Preparing a will or a trust
Distribution Act 1958 (amended 1997)
