It’s now a RM40 billion problem

I had been out of the house the whole of today and have only just managed to switch on my laptop to catch up on my on-line news. Surfing to the New Straits Times website, what do I see as its main article of the day?

RM40 billionLo! A story with a most intriguing headline: RM40 billion waiting to be given to heirs

I know, I know … I have written about it here in the the past but this is a fresh and lengthier take on the same, sad state of undistributed estate and inheritance in Malaysia.

Mmm … RM40 billion is a lot of money. Taken into perspective, the estimated cost of building the second Penang Bridge is “only” RM3 billion.

Now, according to the NST report, land and property account for about RM38 billion; RM1.5 billion is with the Registrar of Unclaimed Monies; and more than RM70 million in the Employees’ Provident Fund. Also, there are about a million land titles still registered in the names of dead people.

What’s the cause of all this undistributed estate? Amanah Raya Bhd’s general manager of sales and marketing Rafie Omar claimed it’s due to people dying intestate, that is, without writing a will. Let me quote him in the NST:

“The sudden death of a family member, without leaving a will, not only creates problems of inheritance, but also leaves the family stranded with outstanding loans and other obligations the deceased may have. Though the deceased may have left lots of cash and property, the family members cannot get their hands on them if there is no will.”

I cannot but to agree with him that many people still consider estate planning a taboo subject as it involved talking about a person’s death. But why should death be a taboo when it is just an automatic extension of living? Our presence on this earth is only temporary and if we have lived our lives to the fullest, we should be prepared to let go. Of course, since about 10 years ago, the population here is getting smarter. The wall has started crumbling but even among us Chinese, it is still not fast enough.

Among the Malays, it is even slower. Rafie said that most of those who die intestate were the Malays, adding that many of them depend on the faraid system to distribute their assets. Again, this is nothing new as I have written about this here.

The NST article also interviewed the Rockwills Corporation chief executive officer, Saw Leong Aun, who identified procrastination as one of the main reasons. Let me list the main points raised by him:

  • Procrastination. People only suddenly wanting to make a will after a major disaster, like the 11 Sep 2001 incident or the 26 Dec 2004 tsunami.
  • Lack of urgency, thinking that death is far away.
  • The popular thinking that wills are only for the rich and people should accumulate wealth first. However, this is a misconception because “estate” does not mean just wealth or money.

So the message is clear: think of your family. They are your main beneficiaries. Normally, they would already be affected by a closed one’s death. Don’t inconvenience them further by denying them the necessary assess to their inheritance, especially if they really need it. And about the easiest solution is to write a will or a wasiat. Estate Planning is the way to go.

UPDATE:

Today (22 Jan 2007), Deputy Prime Minister Datuk Seri Najib Razak added his voice in support of yesterday’s NST article. A Bernama report quoted him as saying: “This must be looked into seriously as the unclaimed assets are usually bogged down by claims from heirs and so forth. As such, Malaysians must be prepared to bequeath their properties to family members and for Muslims according to Islamic principles.”

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