Wills and Inheritance in Malaysia

Information pertaining to writing a will in Malaysia, and the laws relating to inheritance and distribution in Malaysia…

The purpose of writing a will is for a person to leave behind a legacy for loved ones, and to ensure that they are well provided for in the unfortunate event of the testator’s passing. If a person dies intestate (without having written a valid will), then the provisions under the Distribution Act 1958 will apply unless he or she is a Muslim in West Malaysia and Sarawak or is a native of Sarawak. If the person is in the state of Sabah, then the Intestate Succession Ordinance 1960 will apply. Both the act and ordinance set out the manner of distribution of any property to specific beneficiaries, after all outstanding debts (including taxes) are paid. In addition, the provisions under the Inheritance (Family Provision) Act 1971 allow the courts to grant an order that the maintenance of certain categories of dependents shall be reasonably provided for where such dependents have not been provided for, or are inadequately provided for, under the testator’s will.

Foreigners and Wills(馬來西亞外國人與遺囑)

Malaysia recognises the validity of international wills that relate to properties and assets owned by the testator in other parts of the world.  However, it is highly recommended that a foreigner make a will in Malaysia under the following circumstances:(馬來西亞承認國外遺囑,但是最好在馬來西亞本地立有遺囑)

• They are living permanently in Malaysia and would be considered a ‘permanent resident’ of Malaysia at the time of their passing
• They own immovable properties in Malaysia (land and buildings, for instance)(當你有房地產在馬來西亞,最好在馬來西亞有遺囑,當然國外的遺囑也可以)

Failure to make a will in Malaysia may mean that delays occur in the transfer of their properties and assets in Malaysia to their beneficiaries, wherever they may be. In short, having a will made in their country of origin that covers all assets is still valid, but there may still be delays when it is applied in Malaysia, especially when it involves immovable properties bound by administrative red tape. As such, it would be advisable to make a will in Malaysia addressing Malaysian properties and assets to avoid the risk of delays that may take years to settle.(如果遺囑是國外的遺囑,雖然可受益,但是會拖慢受益人受益的時間)

Qualifying to Make a Will

There are three prerequisites that must be satisfied when making a will before it is considered valid:

• The testator must be at least eighteen years old as stipulated under the Age of Majority Act 1971 in West Malaysia and Sarawak, whereas in Sabah, the age of majority is twenty-one years old as stated under Section 4 of the Wills Ordinance 1953(立遺囑人必須年滿18歲)
• The testator must be of ‘sound mind’ (“testamentary capacity”) as provided by Section 3 of the Wills Act 1959(立遺矚者必須頭腦清楚)
• The will must be in writing, and must also be signed by the testator (or affixed with the testator’s mark) at the foot or end of the will in the presence of two witnesses. The will must be attested by two or more witnesses in the presence of the testator and each other(立遺囑時必須有兩位見證者,必須被書寫成文字)

Intestacy – Letter of Administration

When a person dies intestate (without leaving a valid will), there may be a delay in distribution due to the following:

• Choosing an administrator: the beneficiaries may not agree on the person intending to apply for the Letter of Administration. The Probate and Administration Act 1959 requires all lawful beneficiaries to waive in writing their right to be administrator when appointing an administrator
• Valuing the estate: a lot of time and manpower is required to locate, collect, assess and value all assets and liabilities. As a result, there will be increasing costs to the estate and its beneficiaries as the need for legal services, accountants, tax consultants and other professionals arises.
• Finding two sureties: the administrator must find two sureties to sign an administration bond, and the sureties must have assets within the jurisdiction equivalent to the value of the deceased’s estate.  However, no surety is required if:
  1. the estate does not exceed RM50,000
  2. a trust corporation is being appointed as the administrator
  3. the administrator is the sole beneficiary, in which case sureties are waivered at the discretion of the court (as per Section 35 of the Probate and Administration Act 1959)
• Lawful beneficiaries: When an individual dies intestate, their estate is distributed according to the Distribution Act 1958. Due to the delays caused by the factors mentioned above, sometimes the estate will have to be distributed to many beneficiaries who inherit from the original beneficiaries (who may have passed away over time), or who may have relocated to different countries. Even if there are no difficulties with having many beneficiaries or with finding them, the application of the intestacy law in Malaysia will create other difficulties as shown below, be it the Distribution Act 1958 or the Intestate Succession Ordinance 1960. In addition, the intestate will not be able to dictate the terms of the distribution of their estate to the people chosen to be beneficiaries, determine what assets are to be inherited by whom, or choose the manner of their distribution. Section 6 of the Distribution Act 1958 Provides the following:

Employee Pension Fund (EPF)

It is highly recommended that all employees who contribute to the Employee Pension Fund (EPF) nominate their beneficiaries on the EPF nomination form. Failing this, the EPF assets will be distributed in accordance with their will. If the person dies intestate, then it will be distributed in accordance with the acts earlier stated.

Cancellation, Alteration and Revocation

A will is automatically revoked when one or more of the following circumstances occur:

• Marriage: marriage will revoke a will made earlier by the testator unless it was expressed in the will that it was made in contemplation of marriage, and shall not be revoked by the solemnisation of the marriage contemplated to the named fiancé(e) (Section 12, Wills Act 1959)
• Writing a new will: only the latest will would be recognised as the valid one by the courts (Section 14, Wills Act 1959)
• Declaration in writing of an intention to revoke the will: the testator makes a written statement about their intention to revoke the will. The said statement has to be signed by the testator in the presence of two witnesses
• Conversion to the Islamic faith: Section 2(2) of the Wills Act 1959 states that the Act does not apply to wills of persons professing the religion of Islam. When the testator (previously a non-Muslim) embraces the Islamic faith, the will made previously shall be void as it no longer comes under the ambit of the Wills Act 1959. The testator, after conversion, can write a new will in accordance with the Islamic Laws whereby only one third of the total estate can be disposed of by way of a will, and the remaining two thirds by Sijil Faraid (a certificate of Muslim inheritance law). If the Muslim testator would like to dispose of more than one third of their total estate, the consent of all lawful beneficiaries must be obtained
• Intentional destruction: a will can be burnt, torn or otherwise intentionally destroyed by the testator or a third party in the presence of the testator and under their direction, with the intention to revoke the will (s. 14). Accidental or malicious destruction by a third party does not render the revocation effective