Question:
Hi, I’m Lee, a Malaysian stock investor who invests through two stock brokerage accounts. The first account is with a Malaysian local bank where I invest in local stocks in Malaysia. The second is with a Singapore brokerage house where I use it to invest in stocks listed in Singapore. Currently, my portfolio is worth as much as RM 1 million. Out of which, my Malaysian portfolio is worth RM 250,000 and my Singapore portfolio is worth RM 750,000.
Presently, I’m happily married to Rachel and we’re blessed with Zack, our 5-year old son. Here, my question is, ‘Can I bequeath my stock portfolio in Singapore to my loved ones with a Malaysian will?’
Answer:
First, here is a question that you may want to ask yourself if you are Lee today:
Is it more practical for your wife and kid to inherit and manage your portfolio or to just inherit cash itself?
I believe it could be more practical to liquidate your portfolio and bequeath the cash proceeds to your loved ones especially if they are not savvy in investing. In this article, let us assume that Rachel is not a savvy investor and prefers to have cash over stocks.
Thus, Lee can write a will and instruct his executor to liquidate his portfolio and distribute all cash proceeds in accordance with his wishes. Back to his question, could Lee do so to both his Malaysian and Singapore portfolio with having a will written in Malaysia only?
The answer is Yes.
If Lee Passes on with a Malaysian Will
Lee’s executor will start by applying for the Grant of Probate (GP) from the High Court in Malaysia to unlock all of Lee’s estates in Malaysia. This shall include his investments made via his stock brokerage account with his Malaysian bank. The entire process of obtaining the GP shall take around 3-6 months.
Meanwhile, Lee’s portfolio in Singapore shall remain frozen until the executor is able to obtain the GP from the Malaysian High Court.
Once the executor obtains the GP in Malaysia, he will, with the help of a lawyer
in Singapore, reseal Lee’s GP in the Singapore Court to unlock Lee’s investments in Singapore. The process may take an additional 1-2 months, which starts from the resealing process of his GP after receiving it from the Malaysian High Court.
What if Lee Wishes to Unlock His Singapore Investments Faster?
Then, Lee could consider writing himself two separate wills.
The first will document is to administer Lee’s assets in Malaysia.
The second will document is to administer Lee’s assets in Singapore.
Hence, if Lee passes on, Lee’s executors in both countries can begin to apply for the GPs for Lee’s wills from the Courts in both nations simultaneously. For Lee’s case, if Lee had a separate will written in Singapore, it enables Lee’s executor in Singapore to gain access and administer Lee’s Singapore portfolio much quicker and sooner than Lee having only written a Malaysian will.
How Could Lee Distribute his RM 1 Million Stock Portfolio?
There are several ways to go about it.
First, Lee could nominate Rachel, his wife as his sole beneficiary to his portfolio. Rachel then could use the proceeds to support herself and Zack, their son. That is the most immediate way. However, this method may not be suitable if you do have an idea of how you like the RM 1 million to be distributed or managed.
Why?
This is because Rachel may spend the money in places that are not aligned with Lee’s intention for bequeathing the money to her. For instance, Rachel could:
a. Start a business venture and fail.
b. Invest the money and lose the capital.
c. Use the money to help her own relatives.
d. Be abused or conned by malicious people including her friends and relatives.
e. Remarry with her new husband and share the money with her new family.
f. Lose the money through lavish spending.
and so on and so forth.
Thus, in any of the cases above, it is possible for both Rachel and Zack to not be the full beneficiaries of Lee’s money. I believe it is helpful for Lee to think about the purposes of leaving behind the money to Rachel and Zack. Therefore, let us assume that Lee has the intention to:
a. Prepare Zack’s tertiary education fees worth RM 150,000 (or S$ 50,000).
b. Provide RM 5,000 a month in living expenses to Rachel and Zack.
c. Put all monies in the countries’ respective FDs if they are not yet distributed.
from his RM 1 million stock portfolio if he passes on.
One of the practical ways that Lee could consider is to set up two trusts, each in his will documents in Malaysia and Singapore. For instance,
Step 1: Establish a Trust in his Malaysian Will
If Lee passes on, the executor shall first liquidate his RM 250,000 stock portfolio and use the proceeds to pay off all of his outstanding debts and taxes. Next, the netted amount shall be transferred to his Malaysian trust. From it, Lee’s trustee will pay out RM 5,000 a month to Rachel and she can use the money to support herself and Zack. Meanwhile, the undistributed amount of money would be put into FDs or money market funds to generate interest income.
The trust shall expire once all of the monies within had been fully distributed to Rachel.
Step 2: Establish a Trust in his Singapore Will
Likewise, if Lee passes on, his executor shall also liquidate his RM 750,000 stock portfolio and transfer the proceeds into his Singapore trust. The money shall be placed in multiple FDs or money market funds to generate interest income.
Then, after the money in Lee’s Malaysian trust had been exhausted, the trustee of Lee’s Singapore trust could liquidate some of the FDs or money market funds and pay out RM 5,000 a month to Rachel. This will continue until the balance in the Singapore trust is RM 150,000 or S$ 50,000 and it could be reserved for the funding of Zack’s tertiary education fees.
Conclusion: If You are Lee Today
Like Lee, if you have substantial assets in Malaysia and Singapore, it is helpful to have a separate estate plan for each nation to administer your assets. Thus, you can start by filling up your details below to book yourself a consultation session to brainstorming for ideas to safeguard your assets in both countries:
