Executor and Estate Administration

Having a Wasiat can hasten the distribution of one's estate upon death. In any case, an executor or administrator needs to be appointed. A party that is entrusted to manage a testate estate is known as an Executor, whereas one that manages an intestate estate is known as an Administrator that ensure the beneficiaries' interest are fully protected and cared for.

It is always advantageous to have a trust company partake in administering one's estate or without a wasiat. Compared to appointing individuals, trust companies offer the following benefits :

• Expediency : Having specialized in handling estate matters.
• Exemption from administration bond: A trust company is exempt from providing Administration Bond, which is required of individuals as security for administer estate that exceeds RM50,000
• Perpetual existence : A trust company can exist in perpetuity. A trust company can ensure continuity in the administration process until the final distribution is made.
• Accountability and impartiality : A trust company ensure that the monies bequeathed are properly managed, accounted for and distributed.
• Professionalism and competence : By appointing a trust company, the assurance of professionalism and competence in the overall administration work done, at a very competitive pricing.
• Convenience and professional service : Islamic Estate Planners can visit the customer at a time and place (within reasonable limits) of the customer' choice, to give them flexibility, privacy, comfort and peace of mind.
  

It is encourage all not just meticulously plan their individual selves but to integrate the practical, financial and consequential well-being of their loved ones even if they are no longer around.

Source : SmartInverstor magazine, June 2006 by Jasmin Jamaluddin of As-Salihin Trustee Bhd.

Estate Administration: An Overlooked Subject

What is Estate Administration?

When a person passes away, the assets and debts he leaves behind are referred to as his estate. Where there is valid Will, the personal representative is referred to as the executor and where there is none, the administrator. The personal representative is responsible for locating and collecting the deceased's assets, paying off the debts and distributing the assets.

Estate administration can be an extremely tedious and difficult process. It is quite another to find out what real properties the deceased has or which private limited company he held shares in. Upon the conclusion of the estate administration, the executor is obliged to prepare a statement accounts to be given to the beneficiaries.

Upon the demise of a person, the family members are immediately faced with significant expenses. These include funeral expenses and testamentary expenses such as lawyers fees and disbursements. These expenses together with any debts of the deceased will be paid out from the assets of the estate which includes of outstanding medical bills, credit card debts, housing loan etc.

Source : SmartInvestor Magazine, June 2006 by Ong Eu Jin of OSK Trustee Bhd

Islamic Estate Planning

Is it possible for a Muslim to make a will or must he or she rely completely on the mechanics of Faraid? Who has overall control over a Muslim's estate?

As a Muslim, the above questions are but some of the many possible scenarios or issues that may trouble us at some point in time. This is the essence of Islamic Estate Planning (IEP), which is to provide such assistance to those in need. IEP is seen as a noble service, helping Muslims become aware of their responsibilities to their families.

IEP can help you prepare the necessary documentation which will clarify the position of your existing assets, what is to be done with them upon your death or to see how your children is to be cared for or even ensuring that your non-Muslim family is taken care of and not just your Islamic brethren. At the very least, IEP may help foster better relationships between surviving family members.

If a person wishes to go beyond the realms of division according to Islam's holy scripture, customised but duly acceptable planning needs to be done. If one needs a stronger reason other than practical ones for IEP, the following reminder from the prophet ( peace and blessings be upon him) as recorded by At-Tirmithi might be compelling enough:

"A human being's feet will not depart from before his Lord on the day of Resurrection until he is questioned about five things:
1. His lifetime - how did he consume it?
2. His youth and body - how did he utilise them?
3. His wealth - how did he earn it?
4. His wealth - how did he spend it?
5. And what did he do in regard to what he knew?

Source : SmartInvestor Magazine, December 2005 by Jasmin Jamaluddin of As-Salihin Trustee Bhd

The Importance of Wasiat Under Malaysian Law

Muslim have always been encouraged to write their Wasiat.

As the prophet s.a.w said : "it is not permissible for any Muslim who has something to will to stay for two nights without having his last Will and Testament written and kept ready with him. (Sahih Al-Bukhari vol IV p.1).

Wasiat lets the person to choose a trusted person as an Executor. A male testator is empowered by Muslim law to appoint a guardian a person whom he trusts the most. The assets and liabilities of the deceased fall under the generic term "estate". If a Muslim dies intestate (without a wasiat), a beneficiary must take several steps before he can benefit from the inheritance.

Distribution of the proceeds of an intestate estate may take one to two years or longer. If there are obstacles, such as the failure of beneficiaries to agree on the choice of administrators, or the inability of the administrator to provide adequate sureties. Until all these legal requirements are met, the estate of the deceased remains frozen.

The existence of Faraid does not mean that a benefiaciary can obtain his entitlement immediately after the death of a person. Faraid exists in harmony with wasiat. The rights of heirs are protected under faraid and yet a testator may still make provisions to benefit loved ones who do not fall within the category of heirs in Islam such as adopted children or non-Muslim parents or any charitable body and the like. With a wasiat, he can still divide his assets according to Faraid.

Source: Smart Investor Magazine, January 2006 by Amna Fazillah Ismail of As-Salihin Trustee Berhad

Long Term vs Short Term

This has always been a subject of discussion when I talk to people about building their long term wealth or the "Golden Goose".

The main idea is to have your money work as hard for you as you do for it. Our mission should be to save and invest rather than to spend it all. And this is a skill which we have to choose to develop, the rich skill and the poverty skill. It's may sound like a funny way of describing it, nevertheless it holds a lot of truth.

Rich skill is to have a lot of money and spend a little, while the poverty skill is having a little and spend a lot.

So long-term versus short-term, lets put it in simple terms: Poverty skill: people work to earn money to live today.
Rich skill: work to earn money to pay for investments, which will pay for the future.