124537_lecture 5 Wills, Trust Deeds & Powers Of Attorney

WILLS, TRUST DEEDS & POWERS OF ATTORNEY

• Governing law / statutes – Wills Act 1959 • Applicable for non-muslim • However muslims also can make a will – It is call an ‘ Iqrar’ of a person made during his life time with respect to his property or benefit thereof, to be carried out for the purposes of charity or for any other purpose permissible by the Islamic Law, after his death ’. – For Muslims, only 1/3 of the whole estate may be given away to non beneficiaries while the balance must be distributed in accordance with the Islamic Faraid Law, except where the lawful beneficiaries of the Testator agree otherwise

• What is a “Will”? – ‘A Will is a declaration in the prescribed form of the intention of the person making it of the matters which he wishes to take effect on or after his death, until which time it is revocable’.- (Mellows, the Law of Succession) – S.2 of the Wills Act 1959- as document where a person states his intentions as to how his estate to be administered and distributed after his death and who is to administer it – Is a declaration of a person intention concerning the disposition and devolution of his property after his death to any person of his choice – Is an instrument used by the owner of property to transfer his interest / estate in the property upon his death to any person of his choice

Objectives • To encapsulates the Testator’s directions in relation to the administration and distribution of his/her estate. • To ensure the persons you wish would benefit from your estate will be able to inherit from the same. • A Will helps in expediting the legal process involved in estate administration as no sureties/security deposits are required prior to the issuance of the grant of representation. It would also relieve the Beneficiaries of the Deceased from having to decide on who shall become the Administrator of the Deceased Testator’s estate upon the death of the Testator. • A Will also enables a person to bestow gifts to non-family members/non heirs as well as various charities and religious organizations that the Testator may choose. • In summary, having a Will enables a person to plan smooth transfer of assets to his/her beneficiaries according to his/her wishes.

What are the advantages of having a will? • Having a will enables you to: – Choose your beneficiaries and how your assets are to be distributed; – Choose your trustee and executor to administer your estate; – Set up a testamentary trust for your minor children, heirs with special needs or charities; – Choose the guardian of your minor children; – Minimize the chances of family disputes over property; – Speed up the distribution process considerably; – Reduce the costs of administering your estate; – Express your wishes for your funeral arrangements/ special arrangements.

• Property– includes lands, leases, rents and hereditaments corporeal, incorporeal or personal and any individual shares thereof and any estate, right or interest therein or in relation thereto, moneys, shares of Government and other funds, securities for money, charges, debts, choses in action, rights, credits, goods and all other property whatsoever which devolves upon the executor or administrator and any share or interest therein and any contingent, executory or other future interest;

• s.3 Property disposable by Will – – every person of sound mind may devise, bequeath or dispose of by his will, all property which he owns or to which he is entitled either at law or in equity at the time of his execution even where property is acquired after the execution of the Will.

• E.g. of property that can be disposed by Will: – Land, building ( where the testator is the owner at the time of the death) – Property abroad ( a Will disposing a property that is situated abroad generally is govern by the law of that country in which that property is situated) – Shares of the company ( members of the Company have a right to transfer shares to whom so ever they like unless the AOA otherwise provide) – Insurance policy (life insurance policy taken out by a person on his own life and for his own benefit, forms part of his estate and is willable)

• Parties involved – Testator A person who makes a Will. – Beneficiary A person who inherits under a Will / or any person who benefits under a Will- the beneficiary (ies) will only acquire those property stated in the Will after the death of the Testator – Executor The person appointed in a Will to carry out the testator’s wishes and instructions / a person who will attend to the distribution of the will upon the death of the testator

- Guardian • If the Testator has minor children, guardian should be appointed. • The guardian should be someone who would be able and responsible in taking care of the necessities and affairs of the minor children of the deceased Testator. • The assets belonging to the minor children and/or the maintenance for their needs would be channeled by the Executor and Trustee to the guardian as the caretaker. • The Trustee should hold in trust and/or utilize the same in the most appropriate manner for the benefit of the said children until they reach the age of majority, whereupon the assets shall then be transferred to them accordingly. • Any parent who has parental responsibility for his/her child may appoint one or more individuals to be the child’s guardian(s). The appointment generally takes effect on the Testator’s death, provided that there is no surviving parent with parental responsibility for the child at that time.

Characteristics of a Will • A Will include : – information on the appointment of an Executor who will execute the Will, – the beneficiary(ies) to the Will,

– allocation of assets to the named beneficiaries – the appointment of guardian for minor beneficiaries (if any),

– revocation of earlier Wills, – donation of organs, direction for burials and other special instructions can also be included in a Will.

Basic requirements of a valid Will in the Wills Act 1959 are- S.5(1) WA 1959: • a) It must be in writing- (either handwritten, type written or printed word) • b) The wording need not be legal/ formal language- so long as it is clear on the identification of Testator, executor, beneficiary(ies) and the various kind of property) it is fine.

• c)The testator or (person on behalf of the testator or directed by testator in the presence of the testator) must sign the Will at the end or foot of the document. – If the testator can write, his usual signature would be sufficient, if illiterate or unwell to sign, he may put mark or initial / thumbprint – Nothing must be added below the testator signature. (Anything written /added below the testator signature is considered not valid EXCEPT for witness signature, occupation and address

• d) It must contain attestation clause i.e. Statement in a Will that it has been duly executed in the presence of two witnesses. – There must be at least two or more witnesses present at the same time (means at the present of the testator but not at the presence of 2 witnesses each other) to witness and to attest to the signature of the testator. • Sawinder Kaur Fauja Singh ( 1998)1 CLJ 402 • Dr. K Shanmuganathan ( by Attorney) v Periasamy Sithambaram Pillay[1994] 2CLJ 225

– However the witnesses must not be beneficiaries to the Will nor can their spouses, otherwise the gift will fail ( i.e. disposition to such person is void)- s. 9 of the WA 1959 – In the event of a minor being a beneficiary the Will must appoint 2 administrators to act as Trustees for the minor beneficiary. However where only 1 administrator is appointed, upon a Testator’s demise, the Court may appoint an additional administrator / Trustee for the duration of the beneficiary’s minority. – s. 23 WA 1959 a trustee or Executor can be a beneficiary under the Will as well so long as he/ she does not witness the Will.

• e) The testator must be of sound of mind and not under any undue influence during the execution of his or her Will. • f) The testator making a Will must not be under the age of majority. – s.4 WA 1959 Any Will by an infant is void. • Thiang Kai Goh v Yee Bee Eng & 4 Ors (2004)1 LNS 382 • Udham Singh v. Indar Kaur [1971] 2 MLJ 263 • Tho Yow Pew & Anor v. Chua Kooi Hean [2002] 4 CLJ 90

• g)During the life time of a Testator, a Will is said to be “ambulatory” i.e. it may be revoked or altered according to the necessary formalities.

Who can make a Will a) a person who has attained the age of 18 (Peninsular Malaysia & Sarawak) or 21 in Sabah; b) of sound mind;

c) acting on his own free will and without coercion; and d) not prohibited to administer his property e.g. a bankrupt –so no property in your hands all in DGI’s hands so cannot make a Will

Who can benefit from the Will • Beneficiaries specified in the WillBeneficiaries are person for whose benefit property is held by trustees, executors and personal representatives for distribution of the deceased estate or under trust /settlement)

If the beneficiaries dies before the testator that such gives merely become part of the residue of the estate. • Adopted Children adopted children can be beneficiary, if no will can’t be beneficiary ( if not legally adopted) Same position as step children. • Minor Can be beneficiary but normally the property will be put under the hand of the trustee 1st until attain the age of majority ( 2 trustees) • Mental patient Can be beneficiary, and Court will appoint someone to administer the property during his disabilities period • Bankrupt Can be beneficiary, but all the property goes to DGI to handle for the benefit of creditors

Who can’t benefit • Predeceased beneficiaries • Died before the testator

• Witness to Will • Those who witnesses the testator signature

• Murderer • Murdered Testator after proven guilty • Bedford (1935) Ch 89 • Hall v Knight and Bexter (1914)

• Divorce • Can’t benefit because you are not husband and wife • Decree nisi- the Will is still valid • Decree absolute (final)- no longer husband and wife- the Will is void

• Fraud/ coercion • A Will can be invalidated if it was induce by fraud, fear/ coercion. • So the gift can be set aside and it shall form part as residue

Types of Will • Valid Will- as per definition under s.2 WA 1959 • Oral Will- is a Will that is made orally by a Testator and later been reduced in writing – E.g. Testator made a Will orally during his illness at Hospital, before witnesses and later the Will was reduced in writing • Simple or general Will -making a non specified disposition of all of the Testator’s property both movable and immovable wherever situated to named beneficiaries. - E.g. not specified prop’, to whom and to which beneficiaries) • Specific Will – specific dispositions to named beneficiaries – E.g. Prop A (land) to Tamak Prop B ( house) to Kedekut etc.

• Mutual Wills – identical (same/equal) Wills made between spouses which are identical in nature. Having executed a mutual Will one of them cannot later unilaterally revoke or vary the Mutual Will. So essentially it becomes irrevocable.

• Partly specific and partly general – certain specific properties are clearly identified to be bequeathed to certain beneficiaries while the rest is a general disposition. • Holographic Will- wills entirely written and signed in the handwriting of the testator. The testator prepare everything. It is validated without witnesses because it is in the handwriting of the testator- (but need to prove this) • Privilege Will- s.26 WA 1959- A Will by a member of armed forces of Malaysia who is in actual military service ( may be made either in writing/ orally). This Will will take effect notwithstanding the non-compliance with the formalities require by regular law applicable to others.

Codicil • What is codicil? – C is similar to a Will but is supplemental to a Will and is annexed to a Will in order to add or vary the contents of the Will or – another document that been prepared or – an addition to a Will, signed and witnessed in the same way as the original Will. The witnesses may be different people to those in the original Will.

• The purpose of having C? – Not to revoke all the (contents of the Will/document) and made a new one again

Residue • What is left of the estate (all that a person possesses at the time of his death) once all the specific gifts in the Will have been made due to the death of beneficiaries before Testator

Contents of a Will • i. The opening words: should clearly identify the testator by his full name, occupation and description of his present and recent address • ii. There must be a declaration- to declare that this is his last will e.g. word- “ Last Will and Testament” • iii. Must appoint Executor / Trustee to administer the Estate (the name of executor- to be stated in full, address and occupation as well [can put more than 2 name and max is 4]

• Iv. Direction on method of disposing testators property/ body etc. – This can be specific/ general disposition – The property so disposed can be movable/ immovable – If joint property- cannot be dispose because joint property will go to other party upon death of the survivor – Gifts to charities and Residuary gifts if any i.e. what ever is left over after all the specific gifts

• v.) The Will must be voluntarily signed by the testator, unless illness/ accident/illiteracy prevents it.- can put a mark on it / direct lawyer or representative to sign on behalf (this normally requires a lawyer’s guidance since an invalid signature could invalidate a will) • Vii.) Must be properly executed – date with the testator’s signature, attestation clause and two witnesses

Revocation of a Will • A Will can be revoked by the following acts/cirsumstances: s.14 WA 1959 – a) Marriage (exception s.12 WA 1959) A Will is revoked by a marriage or re-marriage (unless the Will is made in contemplation of a particular marriage). Divorce or separation does not revoke a Will. – b) Destruction A Will is revoked when the Testator destroys the Will physically with the intention of revoking it( e.g. burning, tearing or destroying by the testator) Accidental or malicious destruction by a third party does not constitute revocation. – c) A later Will A subsequent Will would automatically revoke an earlier Will, whether or not a revocation clause is included in the later Will. The Testator can also revoke a Will by making a written statement of his intention, signed in the presence of 2 witnesses. – d) Conversion to Islam A Will is revoked when a Non-Muslim person converts to Islam because the distribution of his/her estate will automatically follow the Faraid distribution.

Revival of a revoked Will • S.16 of WA 1959 – i. by re-execution ( re executed the Will) – ii.By a codicil ( create other or subsequent Will) • During a lifetime of Testator, a Will is ambulatory i.e. it may be revoked or altered accordingly to the necessary formalities

Can a Will be challenged? Yes • A will may be contested on the grounds that: – – – –

the contents have been altered, that the testators signature is forged, or that the execution was not properly witnessed. It may also be alleged that the testator were of unsound mind or under undue influence at the time the testator made the will. • If the testator’s soundness of mind may later be called into question, it is advisable to have doctor examine and certify that the testator still of sound mind. If there is a challenge, the doctor may be required to testify accordingly.

– Ambiguity or important omissions in the will encourages dispute. • If the intention is to exclude spouse or any one of the children from the will, it is advisable to do so expressly. • Giving a justifiable reason for the exclusion will reduce the chances of a successful contest.

What happens if Mr. A die without a will? If die intestate: • assets will be distributed according to the formulas set out in the Distribution Act 1958, and not according to your wishes or the needs of your family members; • The court will appoint a trustee and executor to administer the estate, and this may give rise to disputes between family members or beneficiaries on who should be appointed; • The court will appoint a guardian for the minor children, and the person appointed may not be your choice or preference; • The distribution process will take longer and cost more, ordinarily requiring a bond and the appointment of 2 sureties to guarantee the proper administration of the estate, – further court orders to effect the transfer of real property is needed.

Who will inherit the assets under the Distribution Act 1958? • Section 6 of the Distribution Act 1958 sets out various scenarios for intestacy and provides a fixed formula for the distribution of the person’s assets. • The following are some examples: – Leaving a spouse, issue and parents: spouse ¼ issue ½ parents ¼ – Leaving a spouse and parents but no issue: spouse ½ parents ½ – Leaving a spouse and issue but no parents: spouse ⅓ issue ⅔ – Leaving issue and parents but no spouse: issue ⅔ parents ⅓ – Leaving no spouse, issue or parents, then the following persons are entitled in accordance of priority: brothers and sisters; grandparents; uncles and aunts; great grandparents; great uncles and aunts; government.

Trust Deeds • Governing Law: • Trustee Act 1949

• Trust Corporation? – Company registered under trust Companies Act 1949 and authorized to act as executor and trustee

• What is trust? – Trusts means: holding and managing money/ property for people who may not be ready or able to manage it for themselves e.g. minor – Trust is an obligation binding a person called a trustee to deal with property in a particular way for benefit of one / more beneficiaries

• What is trust deeds? – A Trust Deed is a document containing the terms and conditions of the Trust Account. It enumerates the duties and responsibilities of a Trustee towards the Trust Account and is binding on both the Donor and the Trustee – Trust deeds is used in conjunction (combination) with a Will, it can help/ ensure that a Testator’s assets are passed on in accordance with his wishes after or upon his demise

• Who is Trustee?- relationship based on trust and confidence – In s.3• Person who holds property in trust for another • Are the ‘legal owners’ of the trust property and must deal with it in the way set out in the trust deed • One who administer the trust – can be one or more than one • Upon the trustee’s demise- the interest held under trust is not extinguished but devolves(transfer) to the Estate of the deceased trustee and is held by his personal representatives.- s.23

• Who is Beneficiary? – Anyone who benefits from the property held in trust

• Trust property – property/ capital that is put into the trust by the grantor (i.e. owner of the property = testator in the Will, or if no Will = owner of property) e.g. land, buildings, investments, money or other valuable property.

• When do we create trust? – When someone too young to handle affairs – When someone can’t handle affairs because of incapacitated – Under the terms of a Will – When someone dies without Will (intestate)

Power of Attorney • Governing law: – Power of Attorney Act 1949 – Contract Act 1956 (POA is basically a contract governed by law of contract and agency principles) – In Ahmad bin Salleh (1995) 4 CLJ 197 • The Court had discussed the law relating to the POA where the Judge stated that the law applicable where a POA is created between the donor and a donee (the person whom power is conferred) is that of principal and agent (Agency is fiduciary relation- where principal will appoint an agent to act on his behalf and subject to his control)

• What is POA? – POA is a delegation of power from a donor to a donee for purposes of authorizing the donee to act on the donor’s behalf (s.135 CA 1950) or – Formal instrument by which one person empowers another to represent him/act on behalf for certain purposes – A POA is a deed by which a person confers power on another to act on behalf of the person granting the power (donor)

• The power to act is divided into: – General – Specific/special/limited General -enables the attorney (donee) to act on all matters for the donor -the donee will be authorized to do anything which the donor could have lawfully done Specific -restricts the donee /attorney to act on specific transaction/ particular types of transactions- e.g. has authority to sell a houseso can’t mortgage or finance the house -or limited power- e.g. the donee may have authority only to deal with one particular transaction -or limited power in terms of time- where have authority to act for specific period of time- e.g. whilst donor is in overseas /abroad only

• In S.3(1) of the POA 1949- there is an implied requirement that the deed of POA shall be made in writing between the donor and donee- because of the word “authenticated” • The POA can be drafted in separate agreement or can be part of other agreemente.g. loan agreement – there is a clause inserted relating to POA • Both the donor and the donee must have legal capacity to contract- s.10 +s.11 CA 1950

Who can register a POA document? • Either the Donor or the Donee may register his/her Power of Attorney document or by any lawyer presenting such document at the Power of Attorney Registration Office, High Court of Malaya, Kuala Lumpur or at any Registration Office of the High Court of Malaya in West Malaysia What should be the language? i) A Power of Attorney document must either be in Bahasa Malaysia or English for the purposes of registration ii) Translation must be done if the Power of Attorney document is in a language other than Bahasa Malaysia or English. The translation must be:

a) certified by an interpreter attached to the court; or b) translated by a qualified person accompanied with a Statutory Declaration as to the accuracy of the translation by such person.

• Content of the POA – Introduction clause • Who is the donor • Who is the donee (with name, i.c. no and address)

– Ratification clause • To ratify in case the donee exceed his power ( but this clause is a donor’s choice whether to include it or not) • E.g. a person may claim to be an agent, later a dispute may arise because the facts show that the person who claims to be the agent acted without authority or outside the scope of the authority. So important to see whether the principal has given authority to act if not expressly then at least impliedly. Even where there has been no express or implied authority there can be the element of ratification. • If ratify the contract valid- if disagree to ratify- the donee has to be responsible of his act

– Duties of the attorney- either general /specific

• Attestation/Authentication clause- refer to 1st schedule – the signature of the Donor must be witnessed by the following persons: (a) within West Malaysia:

i) a Magistrate; ii) a Justice of the Peace; iii) a Land Administrator; iv) a Notary Public; v) a Commissioner for Oaths; vi) an Advocate and Solicitor; or vii) an officer of a company incorporated under any written laws carrying on the business of banking in West Malaysia Authentication by the persons above must be in the form prescribed in the Powers of Attorney Act 1949. The forms are: - FORM I - Authentication Form for Individual Donor - FORM II - Authentication Form for Company or Corporation Donor.

• b) outside West Malaysia: i) a Notary Public; ii) a Commissioner for Oaths; iii) a Judge; iv) a Magistrate; v) a British Consul or Vice Consul; vi) a representative of Her Britanic Majesty; vii) any Consular Officer of Malaysia; viii) in the case of an instrument executed in the Kingdom of Saudi Arabia, the Malaysian Pilgrimage Commissioner ix) in the case of an instrument executed in the Republic of Singapore, an advocate and solicitor of the Supreme Court of the Republic; or x) in the case of an instrument executed in the Republic of Singapore, an officer of a company carrying on the business of banking in Singapore, and administered by any written law of the Republic. • There is no specific format to be followed as in the Powers of Attorney Act 1949, but there must be some form of authentication by the persons above to be enclosed in the Power of Attorney document.

• Clause for delegation by attorney – An attorney cannot delegate his power/appoint a substitute to act in his place unless there is an express provision to this effect in the instrument by which the powers are created – Apply maxim ‘delegatus non potest delegare’- a delegate cannot sub-delegate • Termination of POA clause/ revocation – a notice of revocation by the Donor is filed in and received by the Donee (revocation by the donor) – Renunciation by the donee - a notice of renunciation by the Donee is filed in and received by the Donee – Termination because of death( of either donor/ donee died) – or unsound mind (of the donor /donee) – Bankruptcy of donor and donee (solicitor normally conducted bankruptcy search on both donor and donee- to ensure both have capacity to enter into contract) check at DGI’s office+ pay fees and they will let us know the status)

How to register? • Two (2) sets of the Power of Attorney documents must be prepared: (a) One (1) original copy of the Power of Attorney document (for own safekeeping); and (b) A duplicate of the original copy of the Power of Attorney document (to be filed and deposited in the court). How to register a revocation? The following documents must be prepared: a) One (1) original copy of a Revocation of Power of Attorney document (for personal safekeeping); and b) One (1) duplicate copy of a Revocation of Power of Attorney document (to be filed and deposited in the court); and c) The original copy of the Power of Attorney duly registered and endorsed by the High Court of Malaya. The POA must be stamped at the Stamp office before it can be registered by the High Court.