How Unknowingly, I Co-Owned My Parent’s Property
In the mid-90s, my parents bought their first residential property. They both owned the property equally, a 50-50 split ownership. Then somewhere during the early 2010s, my father had a stroke and passed away.
A few weeks after the funeral, my mother and we siblings (my brother, sister and I) sat down for a family meeting planning for the future. One of the questions raised during the meeting was the ownership of the property. We did not spend much time discussing it because we all assumed my mother will be the sole owner of the property.
Months (I am stressing the time horizon) went by but my mother did not hear much from the authority on the transfer of house ownership. Only after a few inquiries did she realize that all our assumptions of her being the sole ownership were completely wrong. To her surprise, the house was now owned by all four of us!
And that is how I came to be a co-owner of my parent’s home. But the question is, how did we siblings get a share of the ownership?
Distribution Act 1958
Well, it is because my father passed away without leaving a will behind. Since there is no will, his assets will be distributed based on Distribution Act 1958. Below is a table illustrating how the assets are to be distributed according to the Act.
Based on the above table, you can clearly see how we siblings (issue) came to own the property. Since the property was equally owned by my parents, the existing 50% of my mother’s share remain intact. However, the remaining 50% ownership was distributed in the following manner.
– 66.67% was distributed equally to us siblings (22.22% each),
– 33.33% was distributed to my mother
Now what this meant was that if my mother decides to alter or sell the house, it ill will require all our signatures. In an ideal world, this may not be an issue, but what if one of our siblings decides to dispute the decision. Or what if one of our siblings decides to liquidate the property, but the others are not keen on it. These scenarios will certainly create friction among us, family members.
We siblings saw this as a problem and felt uncomfortable with the ownership and decided to reverse it by transferring our shares completely to our mother. To to do this, we had to go to the land office (Pusaka Kecil), pay them a fee (not little), and had to attend “angkat sumpah” swearing oath ceremony. My memories of the full event are quite vague since it was nearly a decade ago and I had little knowledge about them back then, but I know the whole process was time-consuming and “leceh” cumbersome.
Importance of Estate Planning – Will Writing
Few years after the event, I attended a personal finance talk. The speaker brought up the wealth distribution topic and jokingly mentioned the following and I am paraphrasing here, “We will grief in the short term, but in the long term we will be annoyed with the decease for not leaving behind his/her estate in an orderly manner”.
Since it is a sensitive topic, I knew the speaker was joking, but there were elements of truth in them. In my family’s case, the house ownership was transferred to my mother without any fuss from any of us. But what if one of us did kick a fuss?
From another personal finance talk, I was made aware that there is a property with 18 owners! The ownership was transferred based on the Distribution Act 1958 upon the demise of one owner to another.
To avoid all these, will writing is necessary. It will ensure faster distribution of assets to intended beneficiaries and prevent hassles and avoid disputes among family members.
Note to Self
I usually take the opportunity to write a blog post as a reminder to my future self. As of today, I am yet to write my own will. To be honest, I find the process of writing a will a bit overwhelming. There are many things to be considered especially my present and future state. Anyhow, I know the importance of it and soon I need to start working on my own will writing.
Will Writing Tips/Information
Nomination supersedes will. Say you nominate your parent as your EPF beneficiary but in your will, you mention your spouse as the beneficiary. Legally the beneficiary will be your parent as nomination supersedes the will. This applies to all nominations, commonly EPF and insurance nominations.
A joint bank account may be frozen upon the demise of one of the owners. The surviving account holder may not be able to access the account. He/she needs to check with the bank if they allow transferring the joint account. Apparently, some banks do, and some do not.
Do not save your will in a safe deposit box as it is considered an asset. Upon demise, the safe deposit will be frozen, and it will be very hard to get the will out from the safe deposit.
The normal assets that can be mentioned in a will are properties, vehicles, bank accounts, CDS accounts, lands, intangible personal property such as stocks, bonds, and other forms of business ownership. I am sure there are others too, so please do check on them. I am not sure about digital assets such as social media online accounts, websites, online pictures, and online documents.
If you have assets outside of Malaysia, say you have a bank account in Singapore, then you need a will from the said country. Each country has its own law and chances are our local will does not carry any weight in foreign countries.
Note: All information shared in this blog post is applicable for non-Muslims only. For Muslims, please refer to Hibah and Wasiat.
A part-time Malaysian blogger writing his thoughts online. Interest in both personal finance and economics, mainly the behavior aspect of them. I consider myself Poyo since I do not have any significant credentials in both fields, so readers beware. Thanks for reading.