This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on May 30 - June 5, 2016.
Having a will allows a quicker distribution of assets. “The moment we get the call from family members to read the will, we will submit it to the court through our lawyers to apply for the grant of probate. Securing the grant of probate takes three to six months. Once probate is granted, if they have insurance, unit trust and all that, rest assured that we will get that first — and fast. Liquid assets are very fast. We can cash them within 31 days and settle any current debts the deceased has,” says Abdul Aziz Peru.
“Fixed assets, which involve titles and transfers, take slightly longer because it involves going to the court, which will take 18 to 24 months to get transfer of titles. Sometimes, it can go on for longer because of the negotiations between buyer and seller,” he adds.
To avoid any delays in the execution of one’s will, Abdul Aziz Peru recommends that you revise your will whenever there are changes to your assets. “Depending on your needs or situation, you could revise your will every three to six months. I recommend that you revise your will when there are material changes. You could add assets or family members, change the manner of distribution, allocate a bigger portion to charity — anything you want,” he says.
“We also encourage you to update the list of all your assets in your will. If you have acquired more assets, we will give you an additional document to fill in, at no cost. This additional declaration will be kept together with your will.”
The cost to write a will with as-Salihin starts from RM1,400, depending on the number of conditions stipulated in the will. “It is a one-off pricing. We don’t charge you annually for the will. If you revise your will, there is only a minimal charge, about RM200 to RM300. If you set up a trust with us [in addition to a will], we will charge you a minimum of RM1,000, depending on the clauses you require. The more instructions you have, the more expensive it becomes. We don’t do foundations here as these are usually done by a legal firm,” says Abdul Aziz Peru.
The as-Salihin team has extensive experience in civil and shariah law. Most of the members are shariah lawyers who are well-versed in the Islamic law of inheritance.
When the testator passes away, the company ensures that all the deceased’s worldly and spiritual debts are settled and the non-Faraid beneficiaries receive their share of the estate, if applicable. Worldly debts include any outstanding personal debts, while spiritual debts include things such as outstanding zakat payments.
“Also, if the deceased did not get to perform the Haj when he was alive, we will get someone to do so on his behalf. And if he did not fast during his last Ramadan because he was sick, we will pay the fine to the Majlis Agama Islam,” says Abdul Aziz Peru.
“After all the spiritual debts have been paid off, we will look into the will — whether he has bequeathed one-third of his assets to someone, say, an adopted child, or to build a mosque ... we will settle that first,” he explains.
Tools such as hibah (gift) allow one to allocate more of the estate to his heirs. Abdul Aziz Peru says providing a hibah is an alternative to having a will.
“It is a declaration of assets that are given to whomever you want while you are still alive. In hibah, you become the legal owner of an asset, such as a property that you plan to bequeath to your daughter, but the property belongs to the daughter — she is the beneficial owner,” he adds.
“However, you can only hibah an asset if it is unencumbered — it must be free of encumbrances [debt]. If the house is still on loan, you can’t hibah it. If you have a fixed deposit or an Amanah Saham Bumiputera account, you can hibah it because it belongs 100% to you. In addition, a parent can revoke the hibah to their child if they choose to do so.”
A hibah allows one to distribute more of his estate to other members of the family such as his daughters. “You cannot eradicate the entitlement of other beneficiaries — the uncles and aunts of one’s daughters — but you can minimise it. What you can do instead is to gift or hibah certain assets to your daughters,” says Abdul Aziz Peru.
Other instruments that Muslims may use to bequeath their assets are trusts and foundations. According to the definition provided by as-Salihin, a trust is an instrument that determines how an asset is to be managed by the trustee for the benefit of the beneficiary. Upon fulfilment of the terms stipulated, the trust ends.
Under an Islamic will, if the trust is created for the benefit of Faraid heirs who are adults at the time of the death of the testator, then the trust is subject to the consent of the Faraid heirs. However, if the trust is for the benefit of minors who are Faraid heirs, the trust is valid (the minors’ entitlement) until they become adults.
Other services as-Salihin provides include administration of intestate estate; the establishment of trusts in areas such as education, corporate maintenance and charity; harta sepencarian declaration, also known as a declaration of jointly acquired properties by husband and wife; Pri-Niaga or business succession planning; Waqf or religious endowment; guardianship of a ward’s property, minors, insane or disabled adults; and Pri-Emas or Golden Age Trust, which allows as-Salihin to manage one’s wealth in the event one is mentally or physically incapacitated.
Why it is important to update your will
Sometimes, the deceased did not update his will, leaving many of his assets unlisted or undeclared. This becomes more complicated if the assets are in a different country.
“When the deceased had overseas assets, it is challenging because of the law of the land. Sometimes, the law of the land allows the surviving party to inherit the house (if it is a joint ownership),” says Abdul Aziz Peru Mohamed, president and CEO of as-Salihin Trustee Bhd.
“But if you have a will done in Malaysia and you have assets in the Commonwealth, let’s say in London. Once we are granted probate, we will reseal the probate in a London court and call on the London assets from here. So, it is very important to list everything. Sometimes they don’t list everything, maybe they forgot,” he adds.
Contesting the will
As Muslims are given a choice whether to follow the wishes of the deceased, it is not unusual for some wills to be contested when it comes to the distribution of assets. When this happens, Faraid is enforced.
“The law is supreme. It overrides your wishes if your beneficiaries do not agree on the distribution of assets. But based on the wills that I have read, 85% of the time, the beneficiaries follow the deceased’s wishes because they believe that the deceased knew best,” says Abdul Aziz Peru Mohamed, president and CEO of as-Salihin Trustee Bhd.
“[The acceptance of the will] is usually reflective of the relationship between the deceased and the beneficiaries and their upbringing. If the relationship was strong while they were alive, the wishes of the deceased would always be carried out.”
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