Estate Planning Don’t Postpone the Inevitable

In 2018, Finance Minister YB Lim Guan Eng disclosed in Parliament that unclaimed monies amounting close to RM10billion from various entities had been submitted to the Accountant-General’s Department. Yes, you read that correctly – almost RM10billion in cash sitting idly left unclaimed by Malaysians.

The figure underscores a pertinent issue surrounding the lack of awareness amongst Malaysians on proper estate planning practices as well as apathy and just plain ignorance on the basic steps in wealth & asset distribution.

Tan Ping Ying, CEO of Affin Hwang Trustee Berhad (AHTB) highlights that the actual value of unclaimed assets could be even higher than what was reported. “Unclaimed monies comprising of inactive bank accounts, unclaimed fixed deposits or insurance payouts is just one aspect of unclaimed assets. The value of unclaimed estates such as land, landed or non-landed properties, farms and estates are even more significant,” she states.

That is why investors should pay as much attention to the wealth distribution phase of the financial lifecycle to avoid having their assets trapped in bureaucratic limbo and regulatory red tape which puts their dependants at risk, says Tan.

In the financial lifecycle, investors tend to pay more attention to the wealth accumulation stage when they start to build their assets and later move on to the wealth preservation stage when they approach retirement. However, the wealth distribution component is often ignored because nobody wants to broach the subject on death and inheritance.

“Most people have a tendency to postpone estate planning and shy away from thinking about distribution plans. They would perceive estate planning as a complicated process and will only leave such planning to a later stage,” says Tan.

“But a complete and holistic estate plan encompasses more than just what happens after you pass on. Sufficient awareness should be built around the concept that you should start planning as soon as you have assets to pass down to your loved ones and to provide for yourself during your incapacity which is now, rather than hoping things will work out when the time comes.”

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