ESTATE PLANNING

SYAREENA MOHD ROSLI

IZZAH ATHIRAH
NURUL AMIRAH
NUR AMIRAH NAJIHA

WHAT IS ESTATE
PLANNING ?
Definition
A plan for the administration and disposition
of ones
property during ones lifetime
and at ones death
Estate planning is an essential part of
retirement planning and has two
components

1. Build your estate through savings,

investments, & insurance
2. Transfer your estate as you wish at
death

Categories of Estates
Testate estate

Intestate estate

When the person die, and leave a

will

When the person die and did not

leave any will

The estate will be administer

according to his/her wishes.

The estate will be administer

according through Summary
Administration, Small Estate or High
Court.

Summary Administration
Only ARB is empowered to administer an estate
summarily under the Public Trust Corporation Act 1995.
estates are summarily administered without having to
apply for letter of Administration from the High Court.
This power is exercised due to:
I. Whether there is will or not
II. The movable property in Malaysia
III. The value of such property does not exceed RM600 000
IV. No person is entitled to apply for a Grant of probate
V. There is no petition for Letters of Administration pending
VI. There is person making a claim on the property

Small Estate
If estate consist of movable and
immovable properties not exceeding
the value of RM600 000 ; ARB will
administer the estate by making an
application to the Land Office for a
Distribution Order or for the
appointment as administrator of the
estate.

High Court
If the estate exceeds RM600 000 ;
ARB will administer it by applying to
the High Court for the Letters of
Administration and distribute the
estate.

TYPE OF ESTATE
Land

Domestic
animals such
as goats,
cows, camel,
buffalo etc)

Insurance and
cash (whether
invested or
not)

Building
(house)

Jewelry (gold,
silver etc.)

OPPORTUNITY COST OF RATIONALIZING

Many people give little or no thought to
putting their personal and financial affairs in
order for
their families that survive them
Demands of daily living can keep people
from thinking about death
Plan while you are in good health
Estate planning is especially important for
nontraditional households

ESTATE TERMS
Beneficiaries die first
Heir beneficiary living at the time of
death
No one is entitled to inherit which
are:
Slavery
Murderer
A Muslim is not entitled to inherit
from non-Muslim, an a non-Muslim is
not entitled to inherit from a Muslim

DISTRIBUTION OF SMALL ESTATE

The distribution of small estate is provided in the
Small Estates Distribution Act 1955 (Act 98)
(the Act).
The Act provides the administration and
procedure of distribution.
The maximum value of a small estate is fixed at
RM600, 000.
Previously it used to be only RM25, 000.
It is observed that a majority of Muslim estates
in this country fall under the category of 'small
estate'5.

DISTRIBUTION OF NON-SMALL
ESTATES
Procedurally, at the first instance the applicant shall
apply for the grant of a letter of administration and
following that, he shall also apply for a vesting order.
Before making the vesting order, the High Court will
normally require the Muslims applicant to obtain a
sijil faraid from the Syariah Court.
The applicant shall apply to the syariah court for the
sijil faraid and make payment at certain amount.
Then he would submit the sijil faraid to get a vesting
order.
The distribution order made by the High Court is
made in accordance with the sijil faraid.

If the deceased dies

leaving

Parents

Spouse

Issues

parents only,
but no spouse and issue

whole estate

spouse only,
but no parent and issue

whole
estate

issue only,
but no spouse and parents

whole
estate

1/2

1/2

spouse and issue,

but no parents

1/3

2/3

parents and issue,

but no spouse

1/3

2/3

parents, spouse and issue

1/4

1/4

1/2

parents and spouse,

but no issue

What if a person dies leaving no

parents, spouse and issue?
If a person dies leaving no parents, spouse
and issue, his estate will go to the following
persons in order of priority:
(a) his brothers and sisters
(b) his grandparents
(c) his uncles and aunts
(d) his great grandparents
(e) his great granduncle and grandaunts

 Therefore, if a person dies leaving no parents,

spouse and issue, the estate will go to his
brothers and sisters, who will share the estate
equally. If a person dies leaving no parents,
spouse, issue, brothers and sisters, the estate
will go to his grandparents, and so on.
Only when a person dies leaving no parents,
spouse, issue, and any of the above family
members, will the whole estate go to the
government

WILL
Definition
A document where a person
states his intentions as to how his estate
is to be administered
and distributed after his death
and who is to administer it
Neither a contract nor an agreement
Only take effect upon the
demise of the testator.

1. CHARACTERISTICS
Include information on the appointment of
an Executor who will execute the will
the beneficiary(s) to the will and allocation
of assets to the named beneficiaries.
The appointment of guardian for minor
beneficiaries
Revocation of earlier wills
Donation of organs
Direction for burials

2.REQUIREMENT OF VALID
WILL
In writing
(contoh will writing company in
malaysia)
sign
At least 2 /more witnesses
Sound mind
not be under the age of majority

 AMANAH RAYA
Penulisan Wasiat
AmanahRaya mempunyai kepakaran dalam Penulisan Wasiat mengikut undangundang dan memenuhi keperluan syarak (bagi yang beragama Islam). Penulisan
wasiat merupakan salah satu mekanisma perancangan perwarisan harta yang
menzahirkan keinginan seseorang terhadap strategi pengagihan harta yang dimiliki.
Klausa Penting Dalam Wasiat
Nasihat dan pesanan yang baik kepada suami atau isteri, anak-anak dan ahli keluarga
yang lain.
Nama isteri atau suami, anak-anak dan waris yang layak.
Pengisytiharan harta dan hutang yang dimiliki.
Arahan untuk melunaskan segala hutang.
Menyatakan hasrat pengagihan harta kepada insan yang disayangi atau untuk tujuan
kebajikan.
Pelantikan Wasi, Pemegang Amanah dan Penjaga bagi anak di bawah umur atau orang
kurang upaya dan cacat akal.
Arahan Pewasiat terhadap perbelanjaan yang diperlukan untuk mentadbir harta
pusaka. Pewasiat boleh menyatakan larangannya supaya tidak menggunakan
hartanya bagi tujuan yang tidak bermanfaat kepada dirinya dan waris-waris yang
ditinggalkan.
Dokumen Wasiat mesti ditandatangani oleh Pewasiat dan disaksikan oleh;
Wasiat Islam:Dua (2) orang saksi lelaki atau seorang (1) saksi lelaki dan dua (2) orang
saksi perempuan atau empat (4) orang saksi perempuan.

3.WHO CAN MAKE A WILL?

Anyone who owns property, whether
"personal property," such as cash,
stocks, jewelry or furniture, or "real
property," such as land and/or a
house, should prepare a will.
For Muslims, only 1/3 of the whole
estate may be given away to non
beneficiaries while the balance must
be distributed in accordance with the
Islamic Faraid Law

4.VALIDITY OF WILLS
A person who has attained the age of 18
(Peninsular Malaysia & Sarawak) or 21 in Sabah
Only a person who has attained the age of 18
can make a will. So the minor who is below 18
cannot make a will.
Of sound mind
Acting on his own free will and without coercion
A person who wants to make a will should make
on his own free will and without any forcing
from another party.

5.WHY DO WE NEED A
WILL ?
Important tool of estate planning
Helps in expedite the legal process involved in estate
administration as no sureties or security deposits are
required prior to the issuance of the grant of
representation.
Enables a person to choose and appoint his or her own
executor and trustee to carry out his or her wishes
Provide an opportunity for the testator to give and make
allocations for any special needs of their loved ones
Will also enables a person to bestow gifts to non-family
members or non heirs as well as various charities and
religious organizations that the testator may choose.

Parties involved in making a

will

EXECUTOR
To identify the assets and beneficiaries of
the estate.
To collect and realize the deceaseds assets
To pay the deceaseds funeral and
testamentary expenses as well as debts
due and owing to other parties
To distribute legacies
To complete the administration and
distribute the residuary estate

TRUSTEE
To manage the assets to which they
said beneficiary is entitled to, for the
benefit of the beneficiary.
Be responsible in managing a trust
created by the testator in his will.
The executor and trustee can be the
same person.

GUARDIAN
Responsible in taking care of the
necessities and affairs of the minor children
of the deceased Testator.
The assets belonging to the minor children
and/or the maintenance for their needs
would be channeled by the Executor and
Trustee to the guardian.
Any parent who has parental responsibility
for his/her child may appoint one or more
individuals to be the childs guardian(s).

ATTORNEY
POWER OF ATTORNEY
A power of attorney is essential for any individual
who is concerned about losing control of their
affairs and who wishes to minimize the expense
and inconvenience of the courts supervision.
This document is important when an individual
wishes to see a financial, retirement, or estate
plan carried out due to reasons including
illnesses, poor mobility, or vacations. POAs can
even be used in the unfortunate event of
incapacity.

 TYPE OF ATTORNEY
provides authority for financial
decisions
authorizes parties to make decisions
about another's personal care

6.STEP TO WRITE A WILL

1.Establish ones wealth distribution objectives prior to nominating
beneficiaries and the estate allocation
2.Analyze and evaluate ones state of assets by compiling all the
related documentations such as insurance policies, certificate of unit trusts and
others
3.Nominate beneficiaries and allocate assets for them as per ones wealth
distribution objectives
4.Appoint a trustworthy executor with the capability to execute the Will in a
reliable manner
5.Get assistance from a trustworthy will writer to assist in writing the will
6.Ensure that the Will is kept in a safe place and inform the executor on his or her
appointment as executor as well as the location where the will is to be kept

7.REVOCATION OF WILL
Marriage
Illegal wills

Revoke the
wills

Dies Early

Destruction

Unsound
Mind

Convert to
Islam

8.HOW TO UPDATE A WILL?

The family changes as a result of a birth, adoption,
marriage, divorce or death;
Substantial changes occur in the amount or kind of
property owned; for example testator want to add his
other property
Tax laws change; whether tax is increase or decrease
so a will need to be updated
Residence changes from one state to another, for
example the testator move from Malaysia to Singapore
The designated executor, guardian or trustee can no
longer serve for example they dont want to be a
trustee or guardian anymore

9.LEGAL WILLS IN ISLAM

According to verse 180, Al-Baqarah wills is the
obligation in Islam. After mewarith verse legal
of wills will be:
1) Jumhur Fuqaha: wills is be recommended
2) Fuqaha Tabiin : wills is the obligation to
islam
3) Daud Al-Zahiri : wills is obligate to parents
relatives who had not received an inheritance.
For Jumhur Fuqaha the law will change
according to circumstances.

10.TERM AND CONDITION OF WILLS

1)
2)
3)
4)

Testators (al-musi)
Beneficiaries (al-musaalah)
bequeathed property (al-musa bih
Sighah wills (ijab and qabul)

12. Will for Muslim members

WISOYAH or wasiyyat
HIBAH
WAQF

Wisoyah
basically a trust document which appoints a Wasi
(Trustee) almost akin to the Executor appointed under
the English Will
appoint an executor and/or possible alternative
executor(s) for the estate
nominate guardian's for minor children or other
dependents
instruct on the distribution of personal effects
make specific bequests (wasiat)
give the executor the power to administer the estate
guide the executor on funeral arrangements.

Hibah (gift)
Hibah can be used to complement
wasiat.
Unlike wasiat, which is limited to 1/3
of the estate, hibah is unlimited
Hibah is effective immediately (in
ones lifetime), whilst wasiat is
effective after ones death.
However Hibah Trust should be really
thought out

Waqf
waqf" means forbidding movement, transport or
exchange of something
special kind of charity given for the purposes of
benevolence.
have permanence and continuity, so that people
can benefit from them for years, generations or
even centuries.
made of entities from residual income people
can benefit, while the capital asset of the entity
lasts and stays for a short or long period of
time, such as a construction, a well and a tree

DUTIES
EXECUTOR
TRUSTEE
GUARDIAN

Benefit of writing a will

Effective way of declaring your personal liabilities
or somebody elses right to your assets
Ensure speedy and efficient administration of
your estate
Avoid families disputes
Ensure the distribution of your assets upon your
demise will be done according to your wishes
Medium to appoint the Executor of your choice
Appoint a guardian for minor children

Faraid

FARAID
Faraid or the law of inheritance in Islam, is also
known as Ilmu Faraid is a science dealing with the
law pertaining to the devotional acts based on the
syariah in respect of the wealth of a person after
the certainty of his/ her death or on the assumption
of his or her death(Personal Finance)
section of the Islamic law that deals with the
distribution of the estate of a deceased person
among his heirs in accordance with Allah's (God)
decree in the Holy Quran and according to the
hadith or tradition of the Messenger of Allah (peace
be upon him).

THE PRINCIPLES AND LIABILITIES IN

INHERITANCE DISTRIBUTION
The liabilities or responsibilities must be fulfilled in the order of
the following priorities:
- Discharge all his obligations such as zakat, kaffarah or penalties for oath
-Making payment for the funeral rites and expenses
-Settling the debts of the deceased whether debts to Allah (hajj) s.w.t. or
debt to human being (payment of mahr)
-Carrying out the will made by the deceased
-Distribution of the inheritance to the rightful beneficiaries
-Resolving matrimonial property claim by the still-living spouse

Matrimonial Property Right

The right of the parties (husband or
wife) in a legal and valid islamic
marriage, in respect of properties
which were jointly acquired during
subsistence of the marriage.

CAUSES OF INHERITANCE

Nikah

Wala
(relationshi
p)

Heir to a Muslim Estate

AshabulFurud

Baitulmal

Asabah

Ashabul-Furud( The Quranic Heirs)

Received their entitlement as
determined by the faraid
A) relation by affinity
Eg: wife
B) blood relation
-ascendant (grandparents)
-female descendent( daughter)
-collateral relation( siblings)

Asabah (The Agnatic Heirs)

The male relations in their own right
(son, paternal uncle)
The female relations in the right of
another ( daughter<with son >, full
sister<with full brother )
The female relations with one
another ( a daughter and full sister)

Baitulmal
Trustee of the Muslim that look after the assets
which members of the Muslim public can benefit
Jabatan Agama Islam administer the baitulmal
The estate of the deceased person goes to the
baitulmal under the following circumtances
- No rightful beneficiary
- All beneficiaries have received their share , and
still have small portion left
- No claimant to the estate
- No heir

Aul
http://ilmufaraidl.blogspot.com/2010/
10/masalah-aul.html

 BASIS
The Quran:

Hadith

Ijmak and Ijtihad of the

companions of the
Messenger of Allah,
imams of mazhab and
mujtahid of proven
knowledge

FARAID LAW - MUSLIM

ESTATE DISTRIBUTION

SYSTEM FARAID

EPF MONEY, SOCSO AND ALIKE FOR

DEAD MUSLIM MEMBERS
The 49th Muzakarah (Conference) of the Fatwa
Committee of the National Council for Islamic
Religious Affairs Malaysia held on 19th September
2000 has discussed EPF money, SOCSO and alike
for dead Muslim members. The Committee has
decided that:
1. EPF money and savings are considered as
inheritance that must be divided according to
faraid (Islamic law of inheritance)
2. EPF nominee is the administrator of the property.
The nominee should divide the EPF money
according to faraid

Past year questions

DEC 2014
4 (b) A Will is an effective way of
declaring your personal liabilities or
somebody else's right to your assets.
Explain four (4) circumstances that
can revoke a Will.

6/28/15

JUNE 2014
4 (b) Your parents have decided to
write a Will. Since you have been
exposed to this matter, explain to
them requirements for a valid Will.

6/28/15

DEC 2013
5 (a) Haji Ariffin's career as a school
headmaster will eventually end and
soon he has to adapt to living his life
as a retiree. Knowing that you have
gained ideas and knowledge
pertaining to financial planning, he
asks you about will-writing and
'Faraid'. Explain five (5) benefits of
having a valid Will and as a Muslim
enlighten him with what you
6/28/15

JAN 2013
5 (b) When Miasara and his husband
discovered that she was pregnant
with twins, they began to compile the
list of things they would need - cribs,
a double stroller, car seats, not to
mention a car. But there was one
thing they needed that they forgot
about: a will. As a financial
consultant, advise Miasara and his
husband: by stating three (3) reasons
6/28/15

JUNE 2012
a) Hakeem died leaving behind his wife, two
daughters and two sons. But before he died,he
drew up a will for his assets to be divided
equally among the five and everybody agreed
to his decision. But after the death of Hakeem,
one of the sons disagreed to the decision. So
would Hakeem's last wishes be accepted or
would the faraid system override it? If the faraid
system override the wish, what are the
reasons? Related to this case, explain the
portion a person can get under faraid.

b) Estate planning is a part of

retirement planning. What is estate
planning? Explain the two (2)
components of estate planning?

c) Illustrate three (3) differences

between hibah and wasiyah.