What happens if you don’t have a will
NOT leaving a will means leaving heartache for a bereaving family, especially one that is unaware of the legal quicksand.
Can you imagine a scenario such as this:
A man dies without having written a will, and all he owned were assets worth not more than RM600,000 which included a house.
His non-working widowed wife thinks that obtaining a distribution order from the Land Office is the end of the matter but no, she is told that as her three children are still below 18 years old, two-thirds of her late husband’s EPF money will be transferred to the Amanah Raya Bhd (ARB) as the public trustee for them.
So she goes to the local ARB office to enquire after the amount that she wants to withdraw for her three children’s expenses. But there isn’t any good news. According to the ARB, piano lessons, swimming lessons, art classes, ballet dance classes and other similar activities are considered as “luxuries” to have. No, no, no. The ARB will not allow the children’s money to be used for these activities even though the kids had been attending classes before her husband died.
She is shattered and bewildered. Not only is it already hard for the children to cope with life without their father, their lifestyle and activities now risk being drastically changed. How much more tragic can any child’s life become?
As a mother, can she bear to stop her children from attending activities that they have enjoyed and acquired skills from? She uses her one-third entitlement, which is for her personal benefit under the law, for the welfare of her three minor children. Most probably, she may exhaust her entitlement by the time her three children reach adulthood. Who can she rely on if her children are not filial to her?
The above is only a scenario but so typically, it highlights some of the many hardships that we may put our families through if we die without a will.
In law, there is the Small Estates (Distribution) Act 1955 (Small Estates Act) that allows the District Land Administrator (DLA) to act in situations where a person dies without leaving a will and leaves an estate consisting wholly or partly of immovable property and which does not exceed RM600,000 (small estate). This Act sounds very compassionate and socially responsible but in reality, it is full of pitfalls for the affected families.
As the ARB is also a government agency, it is a common practice of the DLA to appoint ARB as the trustee for beneficiaries who are minors. Furthermore, and this is also a very important point to note, no lawyer is entitled to appear on behalf of any party in respect of a small estate except with the permission of the DLA. Hence, lay persons are expected to deal with the relevant authorities all by themselves.
In 2008, perhaps with an eye on inflation, the amount of RM600,000 under the Small Estates Act was amended to RM2mil. According to the official portal of the Department of Director-General of Lands and Mines (Federal), this amendment is already in effect, meaning that many of us now fall under the above category. Ironically enough, with this amended definition, even the properties of some deceased millionaires can now even be classified as “small estates” and thus affected.
In any event, when a person dies, his property is known as his estate and his children are his “issue.” If the person dies intestate (without a will), Section 6 of the Distribution Act 1958 (DA) provides distribution as such:
|Intestate, with surviving||Entitlement to Estate|
For example, if a man dies intestate, leaving behind both parents, spouse and three children and two houses, both houses will bear six people’s names in each of the title deeds. Can you imagine the inconvenience to all six of them and the disputes that may arise in the event of disagreement in dealing with the two houses?
If the man dies leaving no parent, spouse and issue, his whole estate will go to the following persons in order of priority:
(a) brothers and sisters
(c) uncles and aunts
(d) great grandparents
(e) great grand uncles and grand aunts
(f) the government.
So essentially, what can we do if we have assets below RM2mil but we do not wish them to be classified under the Small Estates (Distribution) Act and falling under the control of the District Land Administrator with all the heartache and problems coming with it? One answer is to avoid intestacy and have your will written as soon as possible.
Apart from avoiding the above problems, making a will has other advantages: we select our beneficiaries, their shares and entitlement, and this will minimise disputes among them. In addition, our named executor in the will can directly petition the Court for a grant of Probate. Generally, the steps involved in obtaining the Probate are less cumbersome compared with the situation if one dies intestate and family members have to petition for the grant of Letters of Administration.
Every will is unique because it reflects our personal intention and direction of how we would like our assets to be managed and distributed. There is no single will format that will satisfy everybody. Traditionally, we engage a lawyer to prepare our will. People still do but since 1996, there are alternatives. Professional estate planning companies provide specialist services in this area to non-Muslims.
Retiree Quah Seng Sun is a personal estate planner.