5 SIMPLE THINGS YOU CAN DO NOW TO SECURE YOUR ESTATE
Estate matters is one of the most difficult legal cases to handle. The main reason is because it involves family. Family members tend to have a lot of unresolved emotional issues amongst themselves and these issues invariably surface when a loved one passes on and there is a legacy to be distributed.
Having done some complex estate cases, these are 5 of my most basic steps you can take NOW to avoid a lot of stress and cost when the inevitable does happen.
ONE: List down ALL your assets and place the titles to it in one folder. One of the biggest difficulty beneficiaries face is in finding the assets of the deceased. So, get onto making a list of your properties, your bank accounts, your EPF account, your insurance policies, your shares and whatever assets you have. Then, find the titles and statements to each of them. Make at least one copy and keep the copy and the originals in a separate place, so that in case one is lost, the other is available. Banks and government related departments will require some kind of authorisation for access to information, which makes things very complicated for your family members who may need those urgently to start the process of applying for the Letters of Administration. It is important to get the List of Assets correct, because it is cumbersome and costly to have to amend the LA if there are items which have been left out. You should consult your accountant for larger estates to make a proper inventory and even leave a copy with him.
TWO: Get nomination forms done up. You can easily sort out your EPF, Insurance, PNB and even pension by filing up the nomination forms. Each of these institutions have their own nomination forms, and by filing them you can either name who your Beneficiaries of the funds there will be or appoint a Trustee who will be able to access it and distribute it according to your wishes.
THREE: Set aside some money in a Joint Account for estate administration cost. It is sad when I meet clients who have loads of “locked-up assets” but almost none to afford the legal fees involved in estate matters. Often, they end up having to be at the mercy of Trust Corporations who will charge on the value of the estate for their services, and most importantly, loose their freedom to manage the estate. Although these Trust Corporations may agree to advance the legal fees for the court process, but mind you, they will take out their charges from the estate as soon as they have unlocked it. You will have no control over the amount of the charges or what ultimately happens to the estate. So, put aside at least a minimum cost of commencing an action, so that your Administrator can obtain the Letters of Administration from the High Court and with that start to unlock the rest of your assets including bank accounts. A reasonable estimate for the entire administration is around 5% of the estate value, so you should have at least 2% on stand-by.
FOUR: Identify your Administrator. This is the most sensitive part of estate management. It is not easy to express preference of a certain family member over others as all Beneficiaries feel they are entitled. You can appoint up to four Administrators, so if you have a small family and wish to avoid conflict, there is no harm to name all of them. A good number in my opinion is two. And, preference to those who will be the significant Beneficiaries. For Muslim estates, the best way is to follow the Faraid and name the two potentially largest Beneficiaries in the Faraid Certificate. There is a Divine reason for it, and I feel that we should respect it.
FIVE: Get some legal advice. I know this may sound self-promoting, but honestly, get a legal consult from a reliable estate lawyer. A good estate lawyer will be able to predict the court processes your family may have to go through in administering your estate. They can also offer you some estate planning solutions. But, make sure you consult a reputable lawyer and the best recommendation is from the word of mouth. So, do ask around from family, friends and other professionals like accountants. They may be able to direct you to a person who has assisted them professionally and effectively. Don’t be fooled by companies offering easy solutions using instruments like Hibah, Gift, Trust and the such. These are all highly complex legal instruments which only a qualified lawyer should be advising on. And, be mindful, that lawyers have their professional duty of care to clients which non-legal entities do not
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Regards, Aisha Mubarak.