When should you go through your estate planning needs? Here are five life scenarios that say you absolutely should.
1. You’re an estate planning virgin
If you’re an adult and have never tackled estate planning before, it’s time to start immediately with will writing.
Estate planning helps ensure your assets are distributed according to your wishes and provide final instructions from you.
If you die intestate (without a will), your loved ones will have to go through a lengthy, difficult, and expensive probate process.
2. You’re getting married
Update your will and trust planning to include your spouse. You will want to look at what assets are held individually or jointly. A prenuptial agreement is not legally binding thus not an option in Malaysia. A marriage or remarriage (even to the same person) will invalidate your will if it was written prior.
Having a new baby, adopting a child or a new stepchild will also require a review of your estate planning to make sure you appoint a guardian for your minor children.
You may also want to consider setting up a living trust to specify at what age the child receives assets compared to a will which releases assets when they reach legal age.
3. You’re getting divorced or there’s been a death
The end of a marriage by divorce or death will likely require a review of estate planning needs. Among the changes will be trustees, beneficiaries, and power of attorney.
A divorce does not revoke your existing will. You will need to declare to revoke your existing will. Take the necessary steps to make adjustments to changes in your life relationship status.
4. You’re planning to convert to Islam
A conversion to become a Muslim will invalidate your existing will. This includes conversion from marrying a Muslim spouse in Malaysia.
As a Muslim, your estate planning needs will be governed by Syariah law and distributed according to Faraid (Islamic inheritance law).
A wasiat is similar to a will but has features exclusive for Muslims.
5. Your assets are changing
Changes in assets are a time to review your estate planning arrangements. These may include life scenarios such as purchasing or disposing of property, opening up new savings/current/investment accounts or starting/ending a business.
Maybe you just received an inheritance of a few hundred thousand ringgit. Keep your asset list current and correct.
Your estate planning needs are an area you should review regularly. Work with your financial planner or estate planner to make sure your estate planning is up to date.
This article first appeared in https://mypf.my
MyPF is on a mission to help simplify and grow Malaysians’ personal finances through financial education.