What Happens If Someone Dies Without A Will In Malaysia? Here's Where The Money Goes
It could take up to five years for family members to receive their inheritance. :O
By Jeremy Ng — 15 Feb 2023, 10:44 AM
One topic we don't really talk about is estate planning or Will Writing — it's super pantang in our culture and most people just think that, "I don't have much, so no need to do lah"
However, this mentality can cause several issues down the road.
When someone passes away without a Will, it can take up to years for their assets to be properly passed on to their family members. Without a Will or estate planning, disputes can also arise, delaying the process. Lastly, if the deceased did not inform anyone about their possessions, the beneficiaries may not even know it exists.
When someone passes away without a Will in Malaysia, here's what happens to their estates:
First of all, the death will be classified as 'intestate', a.k.a. death without leaving a Will or instructions on estate distribution — this applies to savings in bank accounts, properties, investments, and other assets.
Next, depending on whether you're a Muslim or Non-Muslim, intestacy (inheritance) laws will determine how your estates are distributed. However, this does not include Employees Provident Fund (EPF) or insurance payouts, as nominees for those would have been chosen.
Thus, EPF members are encouraged to appoint a Nominee to facilitate and expedite the administration of EPF savings by the appointed Nominee after their demise. For Nomination made by Muslim members, the EPF savings will be administered and distributed according to Faraid Law and that an EPF Nominee is the Executor or Administrator of the said savings same goes to Takaful. For Nomination made by Non-Muslim members, the savings will be administered and distributed according to the member’s instruction.
To avoid disputes or fights, the community is encouraged to appoint AmanahRaya as the Nominee for their EPF savings. (The only institution that can be appointed as Administrator or Trustee for EPF savings).
For Muslims:
Surviving family members will need to apply for Faraid Certificate from the Shariah Court. Next, all rightful Heirs must mutually agree to appoint the same Administrator. The estates will be distributed based on Shariah law — it will be given to Baitulmal (Islamic financial institution) if there are no surviving family members or no one claims the estates.
Beneficiaries have to apply for a Letter of Administration before the estates are distributed. The letter allows the person named to administer the estate of a deceased who has died without leaving a valid Will.
For Non-Muslims:
Surviving family members will need to appoint an Administrator. Similarly, beneficiaries need to apply for a Letter of Administration before the estates are distributed.
Upon which, the estates will then be distributed to the beneficiaries based on Distribution Act 1958 after deducting the funeral expenses and outstanding debts.
On top of that, for both Muslims and Non-Muslims, the Administrator will need to find two sureties, whose role is to guarantee the same value of assets and ensure the estates are properly distributed. However, no sureties are needed if AmanahRaya is appointed as the Administrator for estates with a gross value of RM600,000.00 or below.
In Malaysia, three institutions have the power to issue the Letter of Administration: AmanahRaya, the Small Estate Distribution Unit of the Department of the Director-General of Lands and Mines (JKPTG), and the High Court (Civil)
AmanahRaya, a premier trustee company wholly-owned by the Government of Malaysia, can be appointed as an Administrator for both Testate and Intestate estates regardless of value. As a One Stop Centre for Wealth and Estate Planning, AmanahRaya will professionally compile and manage deceased’s assets, settle any debts, and distribute the remaining assets to the rightful beneficiaries.
So, what happens to estates that are not claimed — where does the money go?
Contrary to popular belief, estates are not "frozen" at AmanahRaya.
When a person passes away, the estates will be in the name of the deceased until their loved ones begin the process of administering it. The estates will not go directly to AmanahRaya.
For instance, if John leaves behind property, cars, bank deposits, and stocks when he dies, all assets will be frozen at the location or agency where they are being kept. The ownership of the assets still belongs to John until his surviving family members obtain a Letter of Administration. As long as this step is not done or delayed, the assets will continue to be frozen.
To prevent this from happening, every individual should know the basics of estate management. Better still, you should plan for your inheritance in advance by having Will as part of your Wealth and Estate Planning instrument.
Whether you require Will Writing or Wealth and Estate Planning, AmanahRaya provides free consultation at its 20 branches nationwide
AmanahRaya also provides Estate Administration services at reasonable rates.
Now, you can even access AmanahRaya services digitally via their online portal. Through their hassle-free online services, you can start planning your inheritance today.
To find out more about AmanahRaya's offerings, you can make an appointment online by downloading the ClickMyARB application on the App Store and Google Play, or visit any AmanahRaya branch today.
Other ways to contact AmanahRaya:
Careline: 03-2723 7273
Email: [email protected]
Website: www.amanahraya.my
Facebook: AmanahRaya Official
WhatsApp: 03-2055 7557
