Cover Overseas Assets – Foreign Will: You may own any assets. Such as bank accounts, investments, or properties located overseas during your lifetime. You may not aware of the potential inheritance issues and legal complications in respect of the administration of overseas assets upon demise. How do you cover such assets if you are no longer around? It is possible to have your Will include your overseas assets. However, it is subject to the applicable laws of the jurisdiction it’s located in. There may be some problems for the estate administration in different jurisdictions.
Foreigners and Wills in Malaysia
As the world continues its battle against the COVID-19 pandemic, international travel and cross-border relocations have reduced drastically. However, it comes as no surprise that many are still working, investing, or settling in various corners of the world. In Malaysia, as of the third quarter of 2020, there are 2.92 million non-citizens from across the globe residing in the country. Both temporarily and permanently. With some possessing the financial power to make sizeable purchases such as cars and real estate properties. Where a non-citizen dies and leaves behind a will, the question that arises is what happens to the non-citizen’s properties? This article explores the enforceability of a foreign will and the option to create a localized Malaysian will by non-citizens.
Enforceability of a Foreign Will
Cover Overseas Assets – Foreign Will: A foreign will is one that is made outside of Malaysia by persons who are not domiciled in Malaysia. “Domicile” refers to the country that a person treats as their permanent home. Or, lives in and has a substantial connection with. The two essential elements in determining one’s domicile are factors of residence and intention to reside permanently for an indeterminate period in the country of choice.
As far as foreign wills are concerned, the Malaysian courts recognize the validity of international wills. Foreign wills can be enforced via resealing the grant of probate if the grant of representation was obtained in a Commonwealth country. This is provided for by section 52 of the Probate and Administration Act 1959. For a grant of representation from a non-Commonwealth country, in order to enforce the will in Malaysia. A fresh application for letters of representation must be made to the High Court of Malaya.
It must be noted that when it comes to the distribution of the assets under a foreign will. A different set of laws may apply to govern different classes of assets. This can be classified into the following two categories:
(a) Cover Overseas Assets – Foreign Will: Immovable Assets
For the disposal of a foreigner’s immovable assets in Malaysia, which in essence are real estate properties. Malaysian laws will apply as immovable properties governed by laws of the locality (lex situs). The executor of the will or grant of probate will be able to deal directly with the immovable properties of the testator in Malaysia as provided by section 60 of the Probate and Administration Act 1959.
(b) Cover Overseas Assets – Foreign Will: Movable Assets
For the disposal of a foreigner’s movable properties, which may include vehicles, bank accounts, and other personal belongings. The relevant laws applicable would be the laws of his or her domicile (lex domicilii).
This is based on the principle of conflict of laws and the case of Shaik Abdul Latif v Shaik Elias Bux which concerns the validity of the will. And, the distribution of the property of the deceased. In this case, a Mohamedan Indian British subject, whose original domicile was in Hong Kong. But, acquired a domicile in the Federated Malay States, was held to be governed by Mohamedan law as administered in the Federated Malay States. Under Mohamedan law, a testator thus has the power to dispose of not more than one-third of his estate with the remaining disposed of in fixed proportions to those affirmed by Muslim law to be his heirs.
In the absence of any change of domicile from the country of origin to Malaysia, the court will assume that the domicile of the testator is his country of origin. Following the general rule, the law of the domicile of the deceased will then be applied. For example, his country of origin in the case of such movable properties.
Creation of a Malaysian Will
Cover Overseas Assets – Foreign Will: Despite the recognition of international wills by the Malaysian courts. And, the feature to reseal the grant of probate in some instances. The whole process of enforcing the will in the native land. And, subsequently in Malaysia may take a long period of time.
First, executors will have to obtain the grant of probate from the domicile Court. And, only then will they entitled to re-seal the same in Malaysia through application to the Malaysian High Court.
Should one wish for speedier enforcement of one’s will in Malaysia, especially when the testator owns properties in Malaysia? Then, a good and viable option to explore is the creation of a separate will specifically for assets located in Malaysia. It is also recommended for the executor appointed under the will to be based in Malaysia. So, as to ensure their physical presence in Malaysia in order to properly administer the estate and fulfill their duty as an executor.
Furthermore, creating a Malaysian will and appointing an executor in Malaysia may be convenient for the executors in the domicile country. The Malaysian executor would empowered to dispose of and transfer the liquidated assets to the executors in the domicile country to distribute to beneficiaries in the country. Should that be the intention of the testator? This is provided for in section 63 of the Probate and Administration Act 1959. “63. Transfer of assets to the personal representative in the country of domicile of deceased for distribution.”
Section 63 of the Probate and Administration Act 1959
(a) a person not having his domicile in Malaysia has died leaving assets both in Malaysia and in the country in which he had his domicile at the time of his death; and
(b) there has been a grant of representation in Malaysia with respect to the assets there. And, a grant of representation in the country of domicile with respect to assets in that country;
The personal representative in Malaysia. After having given due notice and after having discharged at the expiration of the time stated in the notice all lawful claims of which he has had notice. May, instead of himself distributing any surplus or residue of the deceased’s property to persons residing out of Malaysia who are entitled thereto, transfer, with the consent of the personal representative in the country of domicile. The surplus or residue to him for distribution to those persons.
Where a foreigner with Malaysian assets possesses a will curated specifically for enforcement in Malaysia and appoints a Malaysian executor. The process of disposal of such assets would be most efficient and time-saving for the personal representatives appointed.
If you have a Malaysia Will that also covers overseas assets. The appointed Executor named in the Will first will have to apply for a Grant of Probate. Which will give him the power to administer the estate and distribute it according to the instructions in your will. And then, the Executor will have to apply for a Resealing of Grant of Probate in another jurisdiction where assets are located. Resealing is the process of obtaining the foreign court’s legal recognition in the country where the assets situated. The resealing order will give the Executor the same power to carry out your instructions in relation to the overseas assets. The resealing of Grant of Probate involves more costs and is time-consuming.
If a jurisdiction rejects your application for the Resealing of Grant of Probate. It is likely that you will treat it as having died intestate. Generally, Commonwealth jurisdictions, such as Singapore, United Kingdom, Australia, can reseal Grant of Probate granted by a Malaysia High Court.
In view of the above, it is advisable that you should make a separate foreign Will that only covers assets located in that particular country. This Foreign Will shall worded in such a way that it will only deal with the assets in that particular country. And, shall not have any effect on other assets located elsewhere. The procedures after one’s death can be complex, especially where the deceased owned foreign properties. Prudent and well-thought-out estate planning can most certainly reduce the stress and trouble one’s successors in title may go through. While ensuring that assets the testator has accumulated in all corners of the world throughout his or her lifetime are properly administered and distributed. (Source: ZICO law)