Updated: Nov 22, 2018
When it comes to estate planning, having a Will is the most basic form of wealth distribution tool. Whether you are in your early 30s or senior years, it is important to have a Will to ensure that YOUR assets can be transferred to the rightful heir. Why? Because tomorrow is not promised, and regretting a delayed decision often causes great impact on the loved ones you leave behind.
As each individual's situation various from one another, here are top 7 reasons why having a will is crucial.
1. Decision maker: Who to inherit
Although its a simple piece of document, through a Will you get to decide who, how and even when to inherit your estate. According to Malaysia's Distribution Act 1958, if a deceased passed on without a Will, the rightful heir will inherit their shares accordingly based on the distribution act.But with a Will, you can decide whether to Will 100% of your estate to your spouse, children or even to charity.
2. Avoid lengthy process & Treasure Hunting
In order for your next of kin to inherit the estate, they need to go through the probate process, with or without a Will. However the process would be a lot smoother if a Will was present at court as it indicates your wishes and the instructions can be carried out accordingly. Without a Will, the court will act on behalf to administrate your estate and sometimes it may cause delay when family members could not agree on the distribution outcome.
A smooth probate process with a Will can take up to an average of 6 - 12 months, whereas cases without a will (known as dying intestate) might take up to 2 years or more. This can be due to families not knowing what assets the deceased owns and need to spend time going on a treasure hunt.
3. Avoid unnecessary Dispute
For some people, things may not workout and have divorced and remarry with a new family. In such situation, all children from both families are the rightful heir to the estate and may cause a dispute over who to inherit. Thus it is important to draft a Will, indicating specific wishes and distribution.
4. Protecting your family from Financial Crisis
Families with young children or elderly dependants may be thrown into a financial crisis when the breadwinner pass on. Daily expenses and commitments such as food, school fees, medical bills and rental payments are affected. Liabilities such as car loans and mortgage loans becomes a burden to your loved ones as the monthly cashflow is disrupted. Houses and assets may be auctioned or sold to make ends meet during desperate times.
5. Minimising estate taxes (Erosion)
For many people, it is a common practice to purchase properties and some even invest in businesses. Often times liquid cash are reinvested and hardly kept in the bank as the interest rate is not attractive. But when a person dies, many do not realise the fees required to transfer the above stated estate can be substantial. Not to mention the need to first payoff outstanding income taxes.
In the end, part of the estate (properties and businesses) may end up getting liquidate to settle the taxes if cash is not enough. The value of your estate may reduce tremendously by the time your family receives it.
6. Appointment of Executor & Guardian
Ensuring the whole estate being windup and put in order is an executor's job. If both parents are not around, a guardian is appointed to take in and raise your minor children. These are both very important roles and without a Will, the court will take it upon itself to choose among family members, which you may not favour.
7. Gifts & Charity
Your decision and actions is a form of teaching to the next generation.When an act of donation or giving back to society is done, they see and learn which would in turn become a family culture. You can even include a letter or message to your family in case you didn't get the chance to bid goodbye.
Like it or not when you pass on, something gets left behind. Malaysia's unclaimed estate has reached a staggering amount of 60 billion ringgit. Don't let your estate join the bulk, write a Will and secure your family's future.