SUCCESSIONSUCCESSION

PLANNINGPLANNING1 February 20131 February 2013

Jeremiah R. GurusamyJeremiah R. Gurusamy

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• Creating A Trust

• Appointing Attorneys under a

Power of Attorney

• Writing your Last Will & Testament

• Financial Planning – Business Trust

• Tax Structures

• Trust Corporations

• Insurance / EPF

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Creating A Trust

Concept of Legal & Beneficial Ownership

Elements of a Valid Express Private Trust

• 3 Capacity Requirements

• - Settlor, Beneficiary, Trustee

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3 Certainties

• Certainty of Intention to create a Trust

(Settlor’s intention – clear language)

• Certainty of Subject Matter

(Property/Assets precisely defined)

• Certainty of Beneficiaries

(who are the categories/ identities of beneficiaries & their share entitlements)

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• Principles of Drafting to be observed

• Rule against Perpetuities

• Rule against Inalienability

• Against public policy

• Incompletely Constituted Trust

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Dealing with Trust PropertyDealing with Trust Property

Minors – below 18 years not allowed to hold LandMinors – below 18 years not allowed to hold Land

Trust DeedTrust DeedSettlor, Trustee and BeneficiarySettlor, Trustee and Beneficiary

Concept of Legal and Beneficial Interest Concept of Legal and Beneficial Interest

Endorsement on Title – Holding as Trustee for the Endorsement on Title – Holding as Trustee for the BeneficiariesBeneficiaries

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Appointing an AttorneyAppointing an Attorney

Power of Attorney Act 1949Power of Attorney Act 1949(Applies to West Malaysia only)(Applies to West Malaysia only)

Authentication of PAAuthentication of PAAuthentication ClauseAuthentication Clause

Valuable ConsiderationValuable ConsiderationStamping of PAStamping of PADeposit of PADeposit of PAPayment of Registration FeesPayment of Registration FeesRevocation of PARevocation of PA

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• Financial Planning- Unit Trust/ Shares/ Property

- Business Trust

• Tax Structures-High Net worth Individuals / Tax Planning

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• Trust CorporationsPerpetual Successions / Professional Custodians

• Insurance Life Policies / Nominated Beneficiaries

• EPF savings Nominated Beneficiaries

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EPF Monies

& Insurance Policy Monies

Deceased made nomination under EPF Act Deceased made nomination under EPF Act 1991 or Insurance Act 19961991 or Insurance Act 1996

• Nominees entitled to the moniesNominees entitled to the monies

• Check accuracy of informationCheck accuracy of information

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EPF Monies & Insurance Policy Monies

• Nomination revoked:Nomination revoked: upon death of the nominee during the upon death of the nominee during the

lifetime of member/policy ownerlifetime of member/policy owner by written notice of revocation by by written notice of revocation by

member/policy ownermember/policy owner by subsequent nomination by by subsequent nomination by

member/policy owner during his lifetimemember/policy owner during his lifetime

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EPF MoniesEPF Monies

EPF NominationEPF Nomination• Made under Employees Provident Fund Act Made under Employees Provident Fund Act

1991and Regulations made thereunder1991and Regulations made thereunder

• Prescribed form of nominationPrescribed form of nomination

• Nominee(s) shall be entitled to deceased’s Nominee(s) shall be entitled to deceased’s EPF monies regardless of what is stated in EPF monies regardless of what is stated in the deceased’s Willthe deceased’s Will

EPF Nomination is revoked as follows:EPF Nomination is revoked as follows:• Upon death of nominee during the lifetime of Upon death of nominee during the lifetime of

the EPF memberthe EPF member• By written notice of revocation made by the By written notice of revocation made by the

EPF member, in the prescribed formEPF member, in the prescribed form• By subsequent nomination made by the EPF By subsequent nomination made by the EPF

member during his/her life time, in the member during his/her life time, in the prescribed form. The later nomination will prescribed form. The later nomination will supercede the earliersupercede the earlier

• Regulations 6 & 7 of the Employees Provident Regulations 6 & 7 of the Employees Provident Fund Regulations 1991Fund Regulations 1991

Life Insurance Policy MoniesLife Insurance Policy Monies

NominationNomination• Nomination under a life insurance policy Nomination under a life insurance policy

under Insurance Act 1996under Insurance Act 1996

• Nominee(s) shall be entitled to deceased’s Nominee(s) shall be entitled to deceased’s insurance policy monies and insurer shall pay insurance policy monies and insurer shall pay policy monies upon receipt of claim by policy monies upon receipt of claim by nominee and the claim is accompanied by nominee and the claim is accompanied by proof of death of the policy holderproof of death of the policy holder

• Section 165(1) of the Insurance Act 1996 Section 165(1) of the Insurance Act 1996

Insurance Policy NominationInsurance Policy NominationA nomination by a non-Muslim policy owner A nomination by a non-Muslim policy owner

creates a trust in favour of the nominee, of creates a trust in favour of the nominee, of the policy monies payable upon the death of the policy monies payable upon the death of the policy owner if:the policy owner if:• The nominee is his/her spouse or child; orThe nominee is his/her spouse or child; or• Where there is no spouse or child living at the Where there is no spouse or child living at the

time of nomination, the nominee is his/her parenttime of nomination, the nominee is his/her parent• Section 166(1) of the Insurance ActSection 166(1) of the Insurance Act

Payment of such policy monies shall not Payment of such policy monies shall not form part of the estate of the deceased-form part of the estate of the deceased-policy owner or be subject to his/her debtspolicy owner or be subject to his/her debts• Section 166(2) of the Insurance ActSection 166(2) of the Insurance Act

However, a creditor may apply to court for However, a creditor may apply to court for a declaration that Section 166, wholly or a declaration that Section 166, wholly or partly, is inapplicable to any particular partly, is inapplicable to any particular policy on the ground that the premium(a) policy on the ground that the premium(a) under that policy was/were paid to defraud under that policy was/were paid to defraud the creditor the creditor • Section 166(5) of the Insurance ActSection 166(5) of the Insurance Act

Such nomination is revoked as follows:Such nomination is revoked as follows:• Upon death of nominee during the lifetime of the Upon death of nominee during the lifetime of the

policy ownerpolicy owner• By written notice given by the policy ownerBy written notice given by the policy owner• By subsequent nomination made by the policy By subsequent nomination made by the policy

owner during his/her life timeowner during his/her life time

Note:Note: Nomination shall not be revoked by a Nomination shall not be revoked by a Will or by any other act, event or meansWill or by any other act, event or means

(Sections 164(1) & (2) of the Insurance Act)(Sections 164(1) & (2) of the Insurance Act)

Policy owner shall Policy owner shall NOTNOT deal with policy to deal with policy to which Section 166(1) of the Insurance Act which Section 166(1) of the Insurance Act applies:applies:

• by revoking a nomination under the policy;by revoking a nomination under the policy;• by varying or surrendering the policy; orby varying or surrendering the policy; or• by pledging the policy as security;by pledging the policy as security;

WITHOUT the written consent of the trusteeWITHOUT the written consent of the trustee

(Section 166(4) of the Insurance Act)(Section 166(4) of the Insurance Act)

WILLSWILLS

&&

LAST TESTAMENTLAST TESTAMENT

Jeremiah R. GurusamyJeremiah R. Gurusamy

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WILLSWILLS

Relevant Legislation

• Wills Act 1959Wills Act 1959

• Wills Ordinance 1953Wills Ordinance 1953

• Probate And Administration Act 1959Probate And Administration Act 1959

• Trustee Act 1949Trustee Act 1949

• Guardianship Act 1961Guardianship Act 1961

• Inheritance (Family Provision) Act 1971Inheritance (Family Provision) Act 1971

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WILLS WILLS – Administration of Estate (Intestacy)

Relevant Legislation

• Distribution Act 1958Distribution Act 1958

• Intestate Succession Ordinance 1960Intestate Succession Ordinance 1960

• Small Estate (Distribution) Act 1955Small Estate (Distribution) Act 1955

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WILLSWILLS Wills Act 1959Wills Act 1959

What is a WillWhat is a WillA document where a person states his/her A document where a person states his/her intentions as who and how his/her estate should intentions as who and how his/her estate should be administered and distributed after his /her be administered and distributed after his /her death. May include provisions for guardianship, death. May include provisions for guardianship, custody and tuition of childrencustody and tuition of children

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DEFINITIONSDEFINITIONSDefinition of “Will” Definition of “Will”

• Section 2(1) of Wills ActSection 2(1) of Wills Act

Definition of “Property”Definition of “Property”• Section 2(1) of Wills ActSection 2(1) of Wills Act

Will must be in writing unless it is Will must be in writing unless it is privileged willprivileged will• Sections 5(1) & 26(4) of Wills ActSections 5(1) & 26(4) of Wills Act

A Will need not be stampedA Will need not be stamped

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The TestatorThe Testator• The person making the WillThe person making the Will• Must be at least 18 years of ageMust be at least 18 years of age• Capacity - of sound mindCapacity - of sound mind• Unless soldier in military service or mariner or Unless soldier in military service or mariner or

seaman at seaseaman at sea• Sections 3 & 26(4) of Wills ActSections 3 & 26(4) of Wills Act

Executor (if male)/Executrix (if female)Executor (if male)/Executrix (if female)• The person named in the Will by the Testator The person named in the Will by the Testator

to administer and distribute the estateto administer and distribute the estate• Need not be a beneficiaryNeed not be a beneficiary

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Beneficiary(ies)Beneficiary(ies)• The person(s) who inherit(s) or benefit(s) under The person(s) who inherit(s) or benefit(s) under

the Willthe Will• If there is/are If there is/are minor beneficiary(ies)minor beneficiary(ies) named in named in

the Will, the Testator must name the Will, the Testator must name at least 2 at least 2 executor(s)/executrix(ices)executor(s)/executrix(ices)

• There is NO particular form required or There is NO particular form required or prescribed by the Wills Actprescribed by the Wills Act

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WILLS ACTWILLS ACT

Generally, Generally, if a Testator marries or if a Testator marries or remarries, his/her Will shall be revoked by remarries, his/her Will shall be revoked by the marriage and becomes null and voidthe marriage and becomes null and void• See Section 12 of Wills Act for exceptionSee Section 12 of Wills Act for exception• e.g., a Will expressed to be made in e.g., a Will expressed to be made in

contemplation of a marriage is NOT revoked by contemplation of a marriage is NOT revoked by solemnisation of the marriage contemplatedsolemnisation of the marriage contemplated

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GenerallyGenerally, certain family members who are , certain family members who are dependants of the deceased, who have been left dependants of the deceased, who have been left out of the Will, out of the Will, MAYMAY apply for reasonable apply for reasonable maintenance out of the deceased’s estatemaintenance out of the deceased’s estate

INHERITANCE (FAMILY PROVISION) ACT, 1971 INHERITANCE (FAMILY PROVISION) ACT, 1971 There are provisions in the IFP Act empowering There are provisions in the IFP Act empowering

the Court to order payment out of a deceased’s net the Court to order payment out of a deceased’s net estate to make reasonable provision for the estate to make reasonable provision for the maintenance of dependents, if the court on such maintenance of dependents, if the court on such an application being made, is of the opinion that an application being made, is of the opinion that the disposition of the deceased’s estate effected by the disposition of the deceased’s estate effected by his will, or the law relating to intestacy, or the his will, or the law relating to intestacy, or the combination of his will and that law, is not such as combination of his will and that law, is not such as to make such reasonable provision for such to make such reasonable provision for such dependant’s maintenancedependant’s maintenance

Contents of a WillContents of a Will• Name, identity card/passport/identification Name, identity card/passport/identification

document number/particulars and address of document number/particulars and address of the Testatorthe Testator

• Name(s), identity card(s)/passport(s)/ Name(s), identity card(s)/passport(s)/ identification document(s) number(s)/ identification document(s) number(s)/ particulars and address of the Executor(s)/ particulars and address of the Executor(s)/ Executrix(ies)Executrix(ies)State whether Executor-Executrix is also to act as State whether Executor-Executrix is also to act as

trustee(s)trustee(s)• Name(s), identity card(s)/passport(s)/ Name(s), identity card(s)/passport(s)/

identification document(s) number(s)/ identification document(s) number(s)/ particulars and address of the Beneficiary(ies)particulars and address of the Beneficiary(ies)

• Particulars of assets and properties to be Particulars of assets and properties to be distributed, and how and to whom the same is to distributed, and how and to whom the same is to be distributedbe distributedProportion of each Beneficiary’s share in each and Proportion of each Beneficiary’s share in each and

every asset and propertyevery asset and propertySpecific giftsSpecific giftsGeneral giftsGeneral giftsResiduary estateResiduary estate

• Power of Executor/Executrix or Trustee(s) to Power of Executor/Executrix or Trustee(s) to manage and deal with estate’s assets and manage and deal with estate’s assets and propertiespropertiesE.g., to dispose, to postpone disposal, to invest, to E.g., to dispose, to postpone disposal, to invest, to

use cash for minor-beneficiary(ies), etc.use cash for minor-beneficiary(ies), etc.

Witnessing a WillWitnessing a Will• Testator must sign at the foot or end of the Will Testator must sign at the foot or end of the Will

(Section 5(2) of Wills Act)(Section 5(2) of Wills Act)

• Must be witnessed by Must be witnessed by AT LEAST 2 witnesses AT LEAST 2 witnesses present at the same timepresent at the same time

• Witnesses Witnesses MUST NOTMUST NOT be Beneficiaries under be Beneficiaries under the Will OR husband/wife of any Beneficiary the Will OR husband/wife of any Beneficiary (Sections 5(2) & 6 of Wills Act)(Sections 5(2) & 6 of Wills Act)

• Witnesses Witnesses MUSTMUST also sign as witnesses in the also sign as witnesses in the presence of the Testatorpresence of the Testator

• Witness need not read or see contents of the Will – need Witness need not read or see contents of the Will – need merely to witness the Testator sign the Will voluntarily merely to witness the Testator sign the Will voluntarily

• An Executor/Executrix who is NOT a Beneficiary or An Executor/Executrix who is NOT a Beneficiary or husband/wife of any Beneficiary MAY witness the Willhusband/wife of any Beneficiary MAY witness the Will

• A Will shall NOT be invalidated by reason of incompetency A Will shall NOT be invalidated by reason of incompetency of any attesting witnessof any attesting witnessSection 8 of Wills ActSection 8 of Wills Act

• Any gift to an attesting witness or husband/wife of an Any gift to an attesting witness or husband/wife of an attesting witness is to be null and voidattesting witness is to be null and voidSection 9 of Wills ActSection 9 of Wills Act

WILLSWILLS

Document where a person states his Document where a person states his intention as to how to distribute his estate intention as to how to distribute his estate and who to administer the estate after his and who to administer the estate after his death.death.

Definition of Will and property – section 2 Definition of Will and property – section 2 WAWA

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General FeaturesGeneral Features

1.1. Must be in writing, and can be in any languageMust be in writing, and can be in any language

cf privileged wills - soldiers, airmen and sailors. cf privileged wills - soldiers, airmen and sailors. Section 26 WA Section 26 WA

- oral / writing- oral / writing

2.Testator, Executor, Executrix, Beneficiaries2.Testator, Executor, Executrix, Beneficiaries

3.3. Minor beneficiaries – below 18 years, at least 2 Minor beneficiaries – below 18 years, at least 2 executorsexecutors

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General FeaturesGeneral Features

4.4. A Will need not be stampedA Will need not be stamped

5.5. If testator marries or re-marries, his or her Will If testator marries or re-marries, his or her Will will be revoked by the marriage, null and void.will be revoked by the marriage, null and void.

- section 12 WA- section 12 WA

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Witnessing A WillWitnessing A Will

1.1. Testator must sign at the foot or end of the Will Testator must sign at the foot or end of the Will (section 5(2) WA)(section 5(2) WA)

2.2. Witnessed by at least 2 persons present at the Witnessed by at least 2 persons present at the same time, who are not beneficiaries AND not same time, who are not beneficiaries AND not husband/wife of any beneficiarieshusband/wife of any beneficiaries

3.3. Any gift to an attesting witness or husband/wife Any gift to an attesting witness or husband/wife of an attesting witness is to be null and void of an attesting witness is to be null and void (section 9 WA)(section 9 WA)

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Changing of WillChanging of Will

1.1. A testator may change his/her Will at any time.A testator may change his/her Will at any time.

2.2. A will should be rewritten if need to change. A will should be rewritten if need to change. The fresh Will automatically supercede the The fresh Will automatically supercede the previous Will.previous Will.

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EPF Monies/Insurance Policy MoniesEPF Monies/Insurance Policy Monies

1.1. Deceased made nomination under EPF Deceased made nomination under EPF Act or Insurance ActAct or Insurance Act

2.2. Nominees entitled to the moniesNominees entitled to the monies

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EPF Monies/Insurance Policy MoniesEPF Monies/Insurance Policy Monies

3.3. EPF/insurance nomination revoked:EPF/insurance nomination revoked:

a)a) upon death of the nominee during the upon death of the nominee during the lifetime of member/policy owner;lifetime of member/policy owner;

b)b) by written notice of revocation by by written notice of revocation by member/policy owner;member/policy owner;

c)c) by subsequent nomination by by subsequent nomination by member/policy owner during his lifetime.member/policy owner during his lifetime.

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Thank YouThank You

Jeremiah R. GurusamyJeremiah R. GurusamyPartnerPartner

Arianti Dipendra JeremiahArianti Dipendra Jeremiah48-2, 2nd Floor, Jalan Medan Setia 2,48-2, 2nd Floor, Jalan Medan Setia 2,

Plaza Damansara, Damansara HeightsPlaza Damansara, Damansara Heights50490 Kuala Lumpur50490 Kuala Lumpur

Tel: Tel: 603-2095 6505603-2095 6505Fax: Fax: 603-2095 7505603-2095 7505

E-Mail: jeremiah@adjlex.comE-Mail: jeremiah@adjlex.com

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