ESTATE PLANNING

Summary Administration Only ARB is empowered to administer an estate summarily under the Public Trust Corporation Act 1995. estates are summarily administered without having to apply for letter of Administration from the High Court. This power is exercised due to:Whether there is will or notThe movable property in MalaysiaThe value of such property does not exceed RM600 000No person is entitled to apply for a Grant of probate There is no petition for Letters of Administration pending There is person making a claim on the property Small Estate If estate consist of movable and immovable properties not exceeding the value of RM600 000 ; ARB will administer the estate by making an application to the Land Office for a Distribution Order or for the appointment as administrator of the estate. High Court If the estate exceeds RM600 000 ; ARB will administer it by applying to the High Court for the Letters of Administration and distribute the estate. TYPE OF ESTATEOPPORTUNITY COST OF RATIONALIZING

Many people give little or no thought to putting their personal and financial affairs in order for their families that survive them

Demands of daily living can keep people from thinking about death

Plan while you are in good health

Estate planning is especially important for nontraditional households

ESTATE TERMSBeneficiaries die firstHeir beneficiary living at the time of deathNo one is entitled to inherit which are: SlaveryMurdererA Muslim is not entitled to inherit from non-Muslim, an a non-Muslim is not entitled to inherit from a Muslim

DISTRIBUTION OF SMALL ESTATEThe distribution of small estate is provided in the Small Estates Distribution Act 1955 (Act 98) (the Act). The Act provides the administration and procedure of distribution. The maximum value of a small estate is fixed at RM600, 000. Previously it used to be only RM25, 000. It is observed that a majority of Muslim estates in this country fall under the category of 'small estate'5.

DISTRIBUTION OF NON-SMALL ESTATESProcedurally, at the first instance the applicant shall apply for the grant of a letter of administration and following that, he shall also apply for a vesting order. Before making the vesting order, the High Court will normally require the Muslims applicant to obtain a sijil faraid from the Syariah Court. The applicant shall apply to the syariah court for the sijil faraid and make payment at certain amount.Then he would submit the sijil faraid to get a vesting order. The distribution order made by the High Court is made in accordance with the sijil faraid.

If the deceased dies leavingParentsSpouse Issues parents only,but no spouse and issuewhole estate-- spouse only,but no parent and issue-whole estate- issue only,but no spouse and parents--whole estate parents and spouse,but no issue1/21/2- spouse and issue,but no parents-1/32/3 parents and issue,but no spouse1/3-2/3 parents, spouse and issue1/41/41/2What if a person dies leaving no parents, spouse and issue?

If a person dies leaving no parents, spouse and issue, his estate will go to the following persons in order of priority:

(a) his brothers and sisters(b) his grandparents(c) his uncles and aunts(d) his great grandparents(e) his great granduncle and grandaunts

Therefore, if a person dies leaving no parents, spouse and issue, the estate will go to his brothers and sisters, who will share the estate equally. If a person dies leaving no parents, spouse, issue, brothers and sisters, the estate will go to his grandparents, and so on.

Only when a person dies leaving no parents, spouse, issue, and any of the above family members, will the whole estate go to the governmentWILLDefinition A document where a person states his intentions as to how his estate is to be administered and distributed after his death and who is to administer itNeither a contract nor an agreementOnly take effect upon the demise of the testator.

1. CHARACTERISTICSInclude information on the appointment of an Executor who will execute the willthe beneficiary(s) to the will and allocation of assets to the named beneficiaries.The appointment of guardian for minor beneficiariesRevocation of earlier willsDonation of organsDirection for burials

2.REQUIREMENT OF VALID WILLIn writing(contoh will writing company in malaysia)signAt least 2 /more witnessesSound mindnot be under the age of majority

AMANAH RAYAPenulisan Wasiat

AmanahRaya mempunyai kepakaran dalam Penulisan Wasiat mengikut undang-undang dan memenuhi keperluan syarak (bagi yang beragama Islam). Penulisan wasiat merupakan salah satu mekanisma perancangan perwarisan harta yang menzahirkan keinginan seseorang terhadap strategi pengagihan harta yang dimiliki.

Klausa Penting Dalam Wasiat

Nasihat dan pesanan yang baik kepada suami atau isteri, anak-anak dan ahli keluarga yang lain.Nama isteri atau suami, anak-anak dan waris yang layak.Pengisytiharan harta dan hutang yang dimiliki.Arahan untuk melunaskan segala hutang.Menyatakan hasrat pengagihan harta kepada insan yang disayangi atau untuk tujuan kebajikan.Pelantikan Wasi, Pemegang Amanah dan Penjaga bagi anak di bawah umur atau orang kurang upaya dan cacat akal.Arahan Pewasiat terhadap perbelanjaan yang diperlukan untuk mentadbir harta pusaka. Pewasiat boleh menyatakan larangannya supaya tidak menggunakan hartanya bagi tujuan yang tidak bermanfaat kepada dirinya dan waris-waris yang ditinggalkan.Dokumen Wasiat mesti ditandatangani oleh Pewasiat dan disaksikan oleh;

Wasiat Islam:Dua (2) orang saksi lelaki atau seorang (1) saksi lelaki dan dua (2) orang saksi perempuan atau empat (4) orang saksi perempuan.Wasiat bukan IslamDua (2) orang saksi lelaki atau perempuan.

3.WHO CAN MAKE A WILL?Anyone who owns property, whether "personal property," such as cash, stocks, jewelry or furniture, or "real property," such as land and/or a house, should prepare a will.For Muslims, only 1/3 of the whole estate may be given away to non beneficiaries while the balance must be distributed in accordance with the Islamic Faraid Law

4.VALIDITY OF WILLSA person who has attained the age of 18 (Peninsular Malaysia & Sarawak) or 21 in Sabah Only a person who has attained the age of 18 can make a will. So the minor who is below 18 cannot make a will.Of sound mind Acting on his own free will and without coercionA person who wants to make a will should make on his own free will and without any forcing from another party.

5.WHY DO WE NEED A WILL ?Important tool of estate planning Helps in expedite the legal process involved in estate administration as no sureties or security deposits are required prior to the issuance of the grant of representation. Enables a person to choose and appoint his or her own executor and trustee to carry out his or her wishesProvide an opportunity for the testator to give and make allocations for any special needs of their loved onesWill also enables a person to bestow gifts to non-family members or non heirs as well as various charities and religious organizations that the testator may choose.

Parties involved in making a willEXECUTORTo identify the assets and beneficiaries of the estate.To collect and realize the deceaseds assetsTo pay the deceaseds funeral and testamentary expenses as well as debts due and owing to other partiesTo distribute legaciesTo complete the administration and distribute the residuary estate

TRUSTEETo manage the assets to which they said beneficiary is entitled to, for the benefit of the beneficiary.Be responsible in managing a trust created by the testator in his will.The executor and trustee can be the same person.

GUARDIANResponsible in taking care of the necessities and affairs of the minor children of the deceased Testator.The assets belonging to the minor children and/or the maintenance for their needs would be channeled by the Executor and Trustee to the guardian. Any parent who has parental responsibility for his/her child may appoint one or more individuals to be the childs guardian(s).

ATTORNEYPOWER OF ATTORNEYA power of attorney is essential for any individual who is concerned about losing control of their affairs and who wishes to minimize the expense and inconvenience of the courts supervision.This document is important when an individual wishes to see a financial, retirement, or estate plan carried out due to reasons including illnesses, poor mobility, or vacations. POAs can even be used in the unfortunate event of incapacity.

TYPE OF ATTORNEYprovides authority for financial decisionsauthorizes parties to make decisions about another's personal care

6.STEP TO WRITE A WILL1.Establish ones wealth distribution objectives prior to nominatingbeneficiaries and the estate allocation

2.Analyze and evaluate ones state of assets by compiling all therelated documentations such as insurance policies, certificate of unit trusts and others

3.Nominate beneficiaries and allocate assets for them as per ones wealth distribution objectives

4.Appoint a trustworthy executor with the capability to execute the Will in a reliable manner

5.Get assistance from a trustworthy will writer to assist in writing the will

6.Ensure that the Will is kept in a safe place and inform the executor on his or her appointment as executor as well as the location where the will is to be kept

7.REVOCATION OF WILL8.HOW TO UPDATE A WILL?The family changes as a result of a birth, adoption, marriage, divorce or death;Substantial changes occur in the amount or kind of property owned; for example testator want to add his other property Tax laws change; whether tax is increase or decrease so a will need to be updatedResidence changes from one state to another, for example the testator move from Malaysia to SingaporeThe designated executor, guardian or trustee can no longer serve for example they dont want to be a trustee or guardian anymore

9.LEGAL WILLS IN ISLAMAccording to verse 180, Al-Baqarah wills is the obligation in Islam. After mewarith verse legal of wills will be:1) Jumhur Fuqaha: wills is be recommended 2) Fuqaha Tabiin: wills is the obligation to islam3) Daud Al-Zahiri: wills is obligate to parents relatives who had not received an inheritance. For Jumhur Fuqaha the law will change according to circumstances.

10.TERM AND CONDITION OF WILLS1) Testators (al-musi)2) Beneficiaries (al-musaalah)3) bequeathed property (al-musa bih4) Sighah wills (ijab and qabul)

12. Will for Muslim membersWISOYAH or wasiyyatHIBAH WAQFWisoyah basically a trust document which appoints a Wasi (Trustee) almost akin to the Executor appointed under the English Willappoint an executor and/or possible alternative executor(s) for the estate nominate guardian's for minor children or other dependents instruct on the distribution of personal effects make specific bequests (wasiat)give the executor the power to administer the estate guide the executor on funeral arrangements.

Hibah (gift)Hibah can be used to complement wasiat.Unlike wasiat, which is limited to 1/3 of the estate, hibah is unlimitedHibah is effective immediately (in ones lifetime), whilst wasiat is effective after ones death.However Hibah Trust should be really thought out

Waqfwaqf" means forbidding movement, transport or exchange of something special kind of charity given for the purposes of benevolence. have permanence and continuity, so that people can benefit from them for years, generations or even centuries. made of entities from residual income people can benefit, while the capital asset of the entity lasts and stays for a short or long period of time, such as a construction, a well and a tree

DUTIESEXECUTORTRUSTEEGUARDIANBenefit of writing a willEffective way of declaring your personal liabilities or somebody elses right to your assets Ensure speedy and efficient administration of your estate Avoid families disputes Ensure the distribution of your assets upon your demise will be done according to your wishes Medium to appoint the Executor of your choiceAppoint a guardian for minor childrenFaraid FARAIDFaraid or the law of inheritance in Islam, is also known as Ilmu Faraid is a science dealing with the law pertaining to the devotional acts based on the syariah in respect of the wealth of a person after the certainty of his/ her death or on the assumption of his or her death(Personal Finance)section of the Islamic law that deals with the distribution of the estate of a deceased person among his heirs in accordance with Allah's (God) decree in the Holy Quran and according to the hadith or tradition of the Messenger of Allah (peace be upon him).

THE PRINCIPLES AND LIABILITIES IN INHERITANCE DISTRIBUTION The liabilities or responsibilities must be fulfilled in the order of the following priorities:

Discharge all his obligations such as zakat, kaffarah or penalties for oath

-Making payment for the funeral rites and expenses

-Settling the debts of the deceased whether debts to Allah (hajj) s.w.t. or debt to human being (payment of mahr)

-Carrying out the will made by the deceased

-Distribution of the inheritance to the rightful beneficiaries

-Resolving matrimonial property claim by the still-living spouse

CAUSES OF INHERITANCE

Nikah Wala (relationship)Heir to a Muslim EstateAshabul-Furud( The Quranic Heirs)Received their entitlement as determined by the faraidA) relation by affinity Eg: wife B) blood relation -ascendant (grandparents) -female descendent( daughter)-collateral relation( siblings) Asabah (The Agnatic Heirs)The male relations in their own right (son, paternal uncle)The female relations in the right of another ( daughter, full sister