Freedom, GEABSOLUTE POWERS CORRUPT ABSOLUTELY, General Election (GE15), Malaysia, Politics, polling Nov 19: Destroy Umno for the betterment of Malaysia, race, religion, Solidality, support Aliran for Justice

Share This

Showing posts with label will. Show all posts
Showing posts with label will. Show all posts

Sunday, 24 November 2024

After homeowner passes

 

Passing On Inheritance

 

  • By following the right legal steps and securing the necessary documents, beneficiaries can better manage this difficult time; 
  • A land search can simplify the inheritance process and clarify the assets involved;
  • Legal experts can protect interests and streamline the process.

Dealing with property after someone passes away can be tough for homeowners. losing a loved one is hard, and having to figure out what to do with their things, especially real estate, can be really complicated and stressful.

This is especially true in Malaysia, where the laws around property and inheritance are quite complex and can differ based on cultural practices. Understanding how to sell a home after someone dies is crucial to get through this challenging time.

When a family member or loved one dies, there is a lot of grief, which adds to the stress that comes with trying to dispose of an inherited real estate.

it gets even trickier if family members disagree or if there is no will in place. Knowing who gets the property is crucial. also key is understanding the emotional and legal aspects of the situation.

Identification of beneficiaries

The first step in selling a home after someone’s death is to figure out who the rightful beneficiaries are. if there is a will, it usually states who gets what, including the property.

if there is no will, the estate will be divided according to Malaysia’s intestacy laws. These laws generally favour close relatives like spouses, children and even parents or siblings.

Beneficiaries need to gather all necessary documents, including their identification certifications and any property ownership records to help with this process.

Once beneficiaries are identified, they need to get the legal documents to sell the property. What they need varies by estate value.

For estates below Rm2mil, the Small estates Distribution act 1955 applies. This act makes the process easier.

Beneficiaries need to apply for a letter of administration (loa) from the estate Distribution Unit. This document gives them the legal authority to manage and sell the property, often without lengthy court processes.

Joint tenancy and nomination are alternative methods for designating beneficiaries for specific assets, bypassing the probate process and ensuring a smoother transfer of assets to the intended recipients.

The probate process involves validating a deceased person’s will in court. if a will is not present, the court may grant a letter of administration to the next of kin, who will then administer the estate.

For estates valued above Rm2mil, the Probate and administration act 1959 is in play, requiring a more formal approach.

Beneficiaries must go to court to have an executor or administrator appointed.

Once this person is in place, they need to get a grant of Probate (gp) or loa, which allows them to handle the deceased’s assets, including selling property.

This can take longer and may need legal help to deal with court requirements.

Before proceeding with any inheritance-related procedures, it is highly recommended to conduct a land search. This legal process provides crucial information about the land, including ownership details and any existing charges or restrictions.

a land search can significantly streamline the inheritance process and offer a clearer understanding of the assets involved.

Legal requirements and considerations

it is a good idea for beneficiaries to talk to legal professionals during this process to make sure they follow all laws.

The professionals can explain any taxes related to selling the property, like capital gains tax or inheritance tax, and can help identify any debts the deceased had that must be settled before selling.

if there are disagreements among beneficiaries about selling or dividing the estate, legal help might be needed.

it is important to remember that inheritance in Malaysia is a complex process swayed by both religious and civil laws.

For Muslims, islamic Syariah law, specifically the principles of Faraid, governs the distribution of assets among heirs, including spouses, children, parents and other close relatives.

The Syariah Court has jurisdiction over inheritance disputes within the Muslim community.

For non-muslims, the Distribution act 1958 outlines the rules for distributing a deceased person’s estate. The act provides a hierarchy of heirs, including spouses, children, parents and other relatives.

additionally, a will can be created to specify the desired distribution of assets, governed by the Wills act 1959.

Inheritance tax

Malaysia’s estate Duty enactment 1941 was repealed on nov 1, 1991, marking the end of inheritance tax in the country.

This legislation had imposed a tax on the net value of property inherited from a deceased person. The tax rates ranged from 0% to 40%, with the highest rate applied to estates valued at over Rm5mil.

Over the years, the estate duty system underwent several reforms to adjust to changing economic conditions. in 1984, the number of tax brackets was reduced to three, with rates ofa0%, 0.5% and 10%.

The lowest rate was applied to estates valued below Rm2mil, while the highest rate was imposed on estates exceeding Rm4mil.

Despite the abolition of the inheritance tax, the topic continues to generate significant public debate. Supporters of reintroducing the tax argue that it could help to increase government revenue and reduce wealth inequality.

By taxing inherited wealth, the government could generate additional funds for public services and social programs. additionally, it could help to mitigate the concentration of wealth in the hands of a few, promoting a more equitable distribution of resources.

However, opponents of the inheritance tax raise concerns about its potential negative impacts. They argue that it could discourage savings and investment, as individuals may be less inclined to accumulate wealth if subjected to taxation upon their death.

Furthermore, they contend that the administrative costs of implementing and enforcing an inheritance tax could outweigh the potential revenue gains.

Ultimately, the decision to reintroduce an inheritance tax in Malaysia is a complex one with significant economic and social implications. a careful consideration of the potential benefits and drawbacks is necessary to determine whether such a policy would be beneficial for the country.

While selling a home after a loved one’s death can be hard both emotionally and legally, it is important to have a solid understanding of the rules and to get professional help.

By following the right legal steps, figuring out who the beneficiaries are and getting the needed documents, beneficiaries can manage this tough time better. Having legal experts involved can help protect their interests and make the process smoother, allowing them to honour their loved one’s memory while sorting out the estate.-Starbiz By SAMANTHA Wong samantha.wong@thestar.com.my 23 Nov 2024  

Related:

A stinky nuisance: When septic tanks burst

Tuesday, 5 November 2024

Managing your digital estate, Digital estate planning

 


How to safeguard online accounts, data in death

MOST PEOPLE have accumulated a pile of data – selfies, emails, videos and more – on their social media and digital accounts over their lifetimes. What happens to it when we die?

It’s wise to draft a will spelling out who inherits your physical assets after you’re gone, but don’t forget to take care of your digital estate too. Friends and family might treasure files and posts you’ve left behind, but they could get lost in digital purgatory after you pass away, unless you take some simple steps.

Here’s how you can prepare your digital life for your survivors:

APPLE

The iPhone maker lets you nominate a “legacy contact” who can access your Apple account’s data after you die. The company says it’s a secure way to give trusted people access to photos, files and messages. To set it up, you’ll need an Apple device with a fairly recent operating system – iPhones and iPads need iOS or iPadOS 15.2 and MacBooks needs macOS Monterey 12.1.

For iPhones, go to settings, tap Sign-in & Security and then Legacy Contact. You can name one or more people, and they don’t need an Apple ID or device.

You’ll have to share an access key with your contact. It can be a digital version sent electronically, or you can print a copy or save it as a screenshot or PDF.

Take note that there are some types of files you won’t be able to pass on – including digital rights-protected music, movies and passwords stored in Apple’s password manager. Legacy contacts can only access a deceased user’s account for three years before Apple deletes the account.

GOOGLE

Google takes a different approach with its Inactive Account Manager, which allows you to share your data with someone if it notices that you’ve stopped using your account.

When setting it up, you need to decide how long Google should wait – from three to 18 months – before considering your account inactive. Once that time is up, Google can notify up to 10 people.

You can write a message informing them you’ve stopped using the account, and, optionally, include a link to download your data. You can choose what types of data they can access – including emails, photos, calendar entries and YouTube videos.

There’s also an option to automatically delete your account after three months of inactivity, so your contacts will have to download any data before that deadline.

FACEBOOK AND INSTAGRAM

Some social media platforms can preserve accounts for people who have died so that friends and family can honour their memories.

When users of Facebook or Instagram die, parent company Meta says it can memorialise the account if it gets a “valid request” from a friend or family member. Requests can be submitted through an online form.

The social media company strongly recommends Facebook users add a legacy contact to look after their memorial accounts. Legacy contacts can do things like respond to new friend requests and update pinned posts, but they can’t read private messages or remove or alter previous posts. You can only choose one person, who also has to have a Facebook account.

You can also ask Facebook or Instagram to delete a deceased user’s account if you’re a close family member or an executor. You’ll need to send in documents like a death certificate.

TIKTOK

The video-sharing platform says that, if a user has died, people can submit a request to memorialise the account through the settings menu. Go to the Report a Problem section, then Account and profile, then Manage account, where you can report a deceased user.

Once an account has been memorialised, it will be labelled ‘Remembering’. No one will be able to log into the account, which prevents anyone from editing the profile or using the account to post new content or send messages.

X

It’s not possible to nominate a legacy contact on Elon Musk’s social media site. But family members or an authorised person can submit a request to deactivate a deceased user’s account.

PASSWORDS

Besides the major online services, you’ll probably have dozens, if not hundreds, of other digital accounts that your survivors might need to access. You could just write all your login credentials down in a notebook and put it somewhere safe. But making a physical copy presents its own vulnerabilities. What if you lose track of it? What if someone finds it?

Instead, consider a password manager that has an emergency access feature. Password managers are digital vaults that you can use to store all your credentials. Some, such as Keeper, Bitwarden and NordPass, allow users to nominate one or more trusted contacts who can access their keys in case of an emergency such as a death.

But there are a few catches: Those contacts also need to use the same password manager and you might have to pay for the service.

Related:

Digital Estate Planning: Protecting Your Digital Assets

Thursday, 3 November 2022

How to protect your sole proprietorship

  

How to protect your sole proprietorship ...

While your business may be thriving under your sole proprietorship, it is important to realise the consequences of having a business ownership tied to you individually, and how it may impact your family in the eventuality of your death. 

THERE are many ways in which middle-income Malaysians make their money; the most common is through a sole proprietorship business, which forms a major part of the business owner’s overall wealth value.

There are many upsides to owning a sole proprietorship – it is fairly easy to set up, the startup costs are low, you have full control over the business as you’re the sole boss and, of course, the main draw is that you keep all the profits you make.

However, a sole proprietorship also has its disadvantages. One of the major disadvantages is that there is no distinction between your private assets and business assets.

As such, there is unlimited liability for debts, which has a potential to eat into your personal wealth should you not take measures to manage your business well.

An aspect commonly overlooked is the need to protect or preserve the business value and continuity should something happen to the owner.

Therefore, while setting up a business may be a positive step to take to help bolster one’s income, there’s also the stark reality every sole proprietor would eventually face – their business will also be terminated should any unforeseen circumstances happen to the owner.

This can be especially daunting for the families of the sole proprietor, who may face immense difficulty in managing their finance and preventing the families’ wealth from being affected after the death.

The case of Leong

Let’s take the example of Leong, a sole proprietor of a successful accounting practice in Puchong with 15 non-professional staff.

Leong’s business was doing so well that even with overhead costs of RM80,000 a month, he could easily draw RM45,000 per month from his practice.

Due to his lucrative business, Leong’s wife stopped working to spend more quality time with their children. One day, Leong met a fatal road accident and passed away. And with his sudden death, came a financial crisis to his family.

Clients who were once close acquaintances of Leong’s practice switched to competitors who offered the same services. Leong’s wife, not a qualified accountant, was unable to pick up her late husband’s business to continue offering these services.

Eventually, the business was forced to wind down as the dwindling income was not able to pay off the company’s overheads.

Since Leong was the sole breadwinner for the family, having no business income meant having no income for the family to survive off. His personal savings was only able to last the family 11 more months without any further influx of income.

As grim as this recollection sounds, it actually happens a lot more often than one might guess.

The question is – how do we avoid such situations for ourselves and our families? What could Leong have done to avoid this financial tragedy befalling his family?

First, let’s see some of the options that are available to Leong’s wife in such a circumstance.

> Liquidation of business by estate administrator.

Unless authorised by the will or court order, the administrator or executor must wind up and liquidate the business as soon as possible. Forced liquidation usually results in severe loss of business value, sometimes ranging as much as 40% to 90%.

> The estate administrator or executor continues the business until it can be sold as going concern.

In this alternative, the sole proprietor’s will gives the power to the administrator or executor to continue the business and exempt him from personal liabilities for the appropriate actions taken during this period.

However, the administrator or executor may still be liable for any losses caused by his or her negligence or imprudence.

Inexperienced administrator

The risk here is that, the administrator or executor may not be experienced or familiar enough to run the business operation.

Secondly, after settling the outstanding estate liabilities, administration expense and taxes, the administrator or executor may not have sufficient working capital to continue the business.

> The heirs inherit the business through a will.

In the sole proprietor’s will, the business can be transferred to the heirs as a gift. However, the heirs may not have sufficient knowledge or ability to run the business profitably.

If they are not successful in running the business, there’s the risk of dissipating their other estate inheritance in order to save the business. As such, the business gift may turn out to be a liability rather than an asset for the heirs.

> Sale of the business through as agreement prior to the death of the sole proprietor.

Before his death, the sole proprietor may offer the sale of his business to his employee or an interested outsider.

Under this alternative, the potential buyer enters into a contractual agreement with the sole proprietor so that the sole proprietor binds his estate to sell and the buyer to buy the business at an agreed price.

Now let’s take a look at some actions that sole proprietors can do while they are living to ensure that their surviving family members are not put into a tough position financially.

> Get a proper business valuation assessment as part of your estate planning.

As sole proprietorship is the trickiest to sell, it is important to have a licensed financial planner to help assess the business value.

He or she would be able to highlight the probable shrinkage in its value under different circumstances, and prevent the sole proprietor from overvaluing their business and thus under preparing the cashflow needed upon death.

Power to executor

> Give the executor of your will the decision-making power to continue or sell the business.

Without this instruction, the executor is bound by law to protect the assets in the estate, and thus may default to winding up the business as soon as possible, which could result in losses.

If the heirs are interested to continue the business, owners of the sole proprietorship may want to instruct the executor to transfer the business to them.

> Seek out a buy-sell agreement with friends or network in the field.

For some professional practices like accountant, doctors, land surveyors, architects, consulting engineers and others, a good practice would be for the sole proprietor to reach out to friends or network in the same field to enter into a buy-sell agreement as an alternative.

Such an agreement will ensure that the surviving professional will purchase over the practices from the deceased’s estate.

An agreement like this would not only help one, but both sole proprietors to ensure the continuity of the business in the event of one of the owner’s demise.

> Identify key employees who can succeed the business.

Depending on the nature of your business, you may want to invest some effort into identifying a potential successor and prepare them to take over the business one day.

Involve any prospective successor in the day-to-day operations to give him or her more experience. You could also consider entering into a buy-sell agreement with the potential successor to buy your business in the event of your death.

> Protect your family with life insurance.

This solution acts as a buffer to provide a safety net to your family. Protecting your family with life insurance while you’re still alive could help bolster losses incurred from a forced wind up of the business.

Forced liquidation

In some cases, the forced liquidation could result in liabilities in excess, of which the life insurance coverage will be able to compensate the business value loss.

In the case that your business does not go through a force winding up, the life insurance claim proceeds will buy your family time to transition through settling your estate, learning the ropes of your business, and/or provide your family accessible working capital during the transition period of settling your estate.

In the case of entering a buy-sell agreement with an interested buyer, he or she can consider purchasing life insurance on the life of the sole proprietor.

This may sound crude and calculated but when the time comes, it can provide additional funds needed for the purchase of the business.

While your business may be thriving under your sole proprietorship, it is important to realise the consequences of having a business ownership tied to you individually, and how it may impact your family in the eventuality of your death.

If you are a sole proprietor, I invite you to evaluate your risks while things are going well with your business. The best way to do this is to employ the expertise of a licensed financial planner.

The licensed financial planner would be able to help identify the pros and cons of each alternative to your business and incorporate your intended wishes into your comprehensive financial planning.

Yap Ming Hui is a licensed financial planner. The views expressed here are the writer’s own. Any reliance you place on the information shared  is therefore strictly at your own risk.

The Star - StarBiz By YAP MING HUI 

Source link

Related 

How to Protect Assets in a Sole Proprietorship

 

Related posts:

 

Generating sustainable retirement income 

 

Young adults in developed countries rent, we buy houses for good

 

Monday, 15 February 2021

Choosing a good executor for your will

“It is a certainty but the Asian culture fails to talk about death adequately. Many times, the parents don’t really talk about this to their children. Such as, when a parent passes away, who will be in charge of the family’s business, ” Rockwills Advisory Services Sdn Bhd’s general manager and associate estate planning practitioner ason Tham told StarBiz.

 

DEATH is an issue nobody likes to talk about, but it is a certainty in this life.

This is likely due to the Asian culture where death is a rarely or openly discussed subject among families which could lead to complications later on for the loved ones.

“It is a certainty but the Asian culture fails to talk about death adequately. Many times, the parents don’t really talk about this to their children. Such as, when a parent passes away, who will be in charge of the family’s business, ” Rockwills Advisory Services Sdn Bhd’s general manager and associate estate planning practitioner Jason Tham told StarBiz.

“Many times, the children are also helping out in the family business and as the founder and business owner it is difficult for the parents to say that they are their children’s boss and parent at the same time. While in some other instances, siblings may be unhappy if parents outrightly choose one over the other to take over the family business.

"A lot of people have an inkling that this is an important topic to talk about but they don’t know where to start, ” Tham added.

He noted that recent business trends for Rockwills have indicated that awareness among Malaysians on the importance of writing a will have been on the rise as business volume in this area have grown.

Writing one’s will in advance will also help ease the transition for a person’s loved ones in terms of matters pertaining to inheritance.

Other than the importance of being more open in discussing death, Tham said it is important for a person to choose a good executor for the will.

“The executor will be acting on a person’s (demised) will. So appointing a capable executor is a very important task and a common mistake made by many is to overlook this part of choosing a capable executor. Some of the characteristics to look out for in a capable executor is that the person must be reliable and trustworthy, ” Tham said.

“Some good examples of a good executor can be a person’s spouse. Since this is a person whom you can trust and this person would know and can execute your wishes in regards to inheritance.

“We must also know that this person chosen will continue to be in existence, ” he added.

Tham explained that continuing to be in existence generally means that as a general guideline, one should try not to appoint their parents as their will executors.

“Most likely a person’s parents would be much older and the chances of them continuing to be in existence would be lower.

“If there are no untoward or unexpected incidences, most likely your parents will pass away before you. An executor will execute a person’s will when a person is gone, ” he said.

Tham said usually, a family member will be selected as executors and they are usually candidates that would naturally be a priority.

“In some cases, a person might require a neutral body to execute a person’s will and this is when a professional estate planning firm may come in handy, ” he said.

“One example when this may be applicable is when a father would like to give his inheritance to his children but they are not on good terms with each other.

“So it is very difficult for the client to appoint one of them to be executors since they would likely be biased and it can create more fights among them. So this is when a licensed trustee is useful to carry out the demised’s will wishes, ” Tham said.

A licensed trustee can also help carry out a person’s wishes in the event that both parents are not around with minors or offsprings who are not yet considered adults, he said.

Source link

 

Related posts:

 

Generating sustainable retirement income

 

Working from home trend spurs demand for bigger houses

 

Better to buy a car or a house first?

 

Leaving a legacy by buying a house first before a luxury car ...

 

Housing affordability is an income issue, what's with the fuss?

 

How to allocate your money wisely: lessons from my father