Estate Planning Tips from Malaysia

Browsing estate-planning blogs can lead you far afield – in this case, Penang, the smallest of Malaysia's states.

It's All in the Planning is the work of Quah Seng-Sun, a former investments and estate planning banker. A former wealth manager, in other words.

Estate planning in Penang is complicated because many inhabitants are of Chinese origin while a similar number are Muslim. Special rules of inheritance apply to Muslims' estates. You'll have to study those rules for yourself. One problem seems to be the situation where a rich uncle might leave the bulk of his estate to a favorite nephew. If he's a Muslim, rules of inheritance might require him to split the estate among all 17 of his nephews.

In a post about a new, Muslim trust company, Mr. Quah cites the problems that arise:

In many cases, [trust company chairman Salleh Abas said], assets have to be shared among many descendents. And when they fail to get everyone’s consent to develop their assets, they risk losing the commercial value.

He gave as a very good example Kampung Baru, the oldest Malay residential area in Kuala Lumpur.

While high-rise developments have taken and are still taking place all around Kuala Lumpur, Kampung Baru itself — sitting on prime land in the heart of the city — is oblivious to new development and seems to have been bypassed.

This, according to as-Salihin’s chairman, was primarily due to two reasons: one, some descendents are sharing lots as small as 1.8 sq ft* and two, land there has lost its value because many joint owners could not reach agreement on developing it.

Mr. Quah has a number of interesting posts under the heading of estate planning, including a convincing explanation of the advantages of Corporate Trustees as Executor.