Here is a case that I have been working on for almost 1 year.
It involves a 25-year old executive. Let’s call him Mike.
Mike’s mother passed on intestate (without a will). She had two properties. The first property is valued at RM 500,000 and had RM 300,000 in outstanding loan. The second property is worth RM 600,000 and its outstanding loan stood at RM 400,000. The MRTAs of these two properties had expired before her passing. As it stands, the mortgage installments for both properties is RM 3,300 per month; the first is RM 1,500 a month and the second is RM 1,800 a month.
So, will Mike inherit the two properties from his mother?
The answer is nope.
In Mike’s case, he is the only son of his deceased mother, who is a divorcee. But his mother has a surviving parent, Mike’s 80-year old maternal grandmother. As stipulated in the Distribution Act 1958, the ownership of these real estates shall be splitted based on the ratio: Mike (75%) and Mike’s Grandmother (25%).
The process to transfer the ownership of these two properties takes time.
First, Mike requires the Letter of Administration (LOA) to begin administering all his mother’s estates, which include collection of her estates, making settlement of all her outstanding debts and taxes, and finally, distributing the balance to all her lawful beneficiaries, including his maternal grandmother.
Without complications, it could take around 18-24 months to complete.
In the meantime, who is servicing the loan installments for both properties?
Is it Mike alone? Or, is it Mike and his grandmother?
This is crucial because the banks still require mortgage payments for both these properties. The banks will auction them off if they fail to receive their payments for these two properties. Here, in Mike’s case, he is servicing both mortgages of RM 3,300 a month by himself as his grandmother is not willing to do so.
This is a huge commitment for Mike as his income is not high currently.
As a matter of fact, Mike is burning cash fast and his situation is becoming dire.
Now, as you read, you may ask, ‘Could Mike sell off the two properties?’
Theoretically, the answer is yes. But, he needs his grandmother’s approval prior to selling off the two properties. This is because his grandmother has 25% stake in both properties. So in Mike’s case, he failed to get his grandmother’s consent to dispose of the two properties. As such, Mike continues to try his level best to keep his mother’s properties, servicing their mortgage installments.
That is the issue with joint ownership or joint beneficiaries of a single property.
Presently, as I write, Mike had obtained the LOA to administer the estates of his mother. However, the issue now lies in the Distribution Order (DO) for there is a dispute on the ownership ratios for both of these properties between Mike and his grandmother. Mike’s grandmother is requesting 50% ownership for both the properties, which is more than what is stipulated in the Distribution Act 1958.
Hence, Mike’s grandmother refuses to sign the DO.
In desperation, Mike compromised. He is willing to forgo his rights to one of the two properties to his grandmother, which is the one situated at Old Klang Road. In exchange, Mike hopes his grandmother to forgo her rights on the property at Puchong. Mike will service the loan installment for the property at Puchong. His mother will service the loan installment for the property at Old Klang Road.
There are two benefits for such a compromise.
First, Mike is able to reduce some financial commitment.
Second, it eliminates all issues arising from joint ownership of a single property.
However, Mike’s grandmother has chosen to reject this offer. This is because for her, she intends to receive 50% stake in both properties without forking out any money. As such, Mike’s problems continue on.
By now, you may ask:
‘Why would an 80-year old grandma be so eager to get the two properties from her own daughter and Mike, her grandson?’
Or
‘What does she have against Mike, her grandson?’
Personally, as a professional estate planner with 9+ years in this industry, I think I’m more accustomed to the intricacies of human behavior. The challenges here are not so much on legalities, but on what seems to be fair for each beneficiary.
Getting all beneficiaries, even two, on the same page can be difficult.
Now, coming back to Mike’s grandmother.
The question is, ‘What is in it for her?’
Well, let’s examine.
First, Mike has two more aunties, his grandmother’s surviving daughters. So, for this case, if Mike’s grandmother passed on after inheriting her stakes in the two properties, these stakes can be distributed to the two aunties via a valid will. So basically, the two aunties stand a chance to inherit these estates for nothing. So here, you may ask:
‘Is Mike’s grandmother pursuing the properties for her daughters’ interests?’
Or
‘Are Mike’s aunties interested in inheriting some stakes in the two properties?
Either way, they do not work in favor of Mike. His life has been disrupted.
If there is such a thing as a time machine, which could turn back time, what can Mike’s mother do to relieve him from such financial stress before passing on?
The answer is simple.
Mike’s mother could, at the very least, add onto her life insurance coverage and write herself a valid will document.
She can nominate her son to be the beneficiary of her life insurance policies. As such, if she passed on, Mike could use the money to service the mortgages.
In her will document, she can nominate Mike to inherit the two properties. This is so that the process of transferring the property ownership to Mike could be a lot easier, much faster, and with greater clarity.
Of course, if necessary, Mike’s mother could consider forming a trust as a useful add-on to solidify her estate planning. But for this, it would be more practical to do so after a professional detailed assessment on your financial situation, by an experienced professional estate planner.
Ideally speaking, it is wiser to have a professional estate planner to assist you in this area so that your assets could be managed and distributed more efficiently. You can start by filling up your details below to book yourself a short 30-minute consultation session to find out the latest practices to best protect your assets.
It involves a 25-year old executive. Let’s call him Mike.
Mike’s mother passed on intestate (without a will). She had two properties. The first property is valued at RM 500,000 and had RM 300,000 in outstanding loan. The second property is worth RM 600,000 and its outstanding loan stood at RM 400,000. The MRTAs of these two properties had expired before her passing. As it stands, the mortgage installments for both properties is RM 3,300 per month; the first is RM 1,500 a month and the second is RM 1,800 a month.
So, will Mike inherit the two properties from his mother?
The answer is nope.
In Mike’s case, he is the only son of his deceased mother, who is a divorcee. But his mother has a surviving parent, Mike’s 80-year old maternal grandmother. As stipulated in the Distribution Act 1958, the ownership of these real estates shall be splitted based on the ratio: Mike (75%) and Mike’s Grandmother (25%).
The process to transfer the ownership of these two properties takes time.
First, Mike requires the Letter of Administration (LOA) to begin administering all his mother’s estates, which include collection of her estates, making settlement of all her outstanding debts and taxes, and finally, distributing the balance to all her lawful beneficiaries, including his maternal grandmother.
Without complications, it could take around 18-24 months to complete.
In the meantime, who is servicing the loan installments for both properties?
Is it Mike alone? Or, is it Mike and his grandmother?
This is crucial because the banks still require mortgage payments for both these properties. The banks will auction them off if they fail to receive their payments for these two properties. Here, in Mike’s case, he is servicing both mortgages of RM 3,300 a month by himself as his grandmother is not willing to do so.
This is a huge commitment for Mike as his income is not high currently.
As a matter of fact, Mike is burning cash fast and his situation is becoming dire.
Now, as you read, you may ask, ‘Could Mike sell off the two properties?’
Theoretically, the answer is yes. But, he needs his grandmother’s approval prior to selling off the two properties. This is because his grandmother has 25% stake in both properties. So in Mike’s case, he failed to get his grandmother’s consent to dispose of the two properties. As such, Mike continues to try his level best to keep his mother’s properties, servicing their mortgage installments.
That is the issue with joint ownership or joint beneficiaries of a single property.
Presently, as I write, Mike had obtained the LOA to administer the estates of his mother. However, the issue now lies in the Distribution Order (DO) for there is a dispute on the ownership ratios for both of these properties between Mike and his grandmother. Mike’s grandmother is requesting 50% ownership for both the properties, which is more than what is stipulated in the Distribution Act 1958.
Hence, Mike’s grandmother refuses to sign the DO.
In desperation, Mike compromised. He is willing to forgo his rights to one of the two properties to his grandmother, which is the one situated at Old Klang Road. In exchange, Mike hopes his grandmother to forgo her rights on the property at Puchong. Mike will service the loan installment for the property at Puchong. His mother will service the loan installment for the property at Old Klang Road.
There are two benefits for such a compromise.
First, Mike is able to reduce some financial commitment.
Second, it eliminates all issues arising from joint ownership of a single property.
However, Mike’s grandmother has chosen to reject this offer. This is because for her, she intends to receive 50% stake in both properties without forking out any money. As such, Mike’s problems continue on.
By now, you may ask:
‘Why would an 80-year old grandma be so eager to get the two properties from her own daughter and Mike, her grandson?’
Or
‘What does she have against Mike, her grandson?’
Personally, as a professional estate planner with 9+ years in this industry, I think I’m more accustomed to the intricacies of human behavior. The challenges here are not so much on legalities, but on what seems to be fair for each beneficiary.
Getting all beneficiaries, even two, on the same page can be difficult.
Now, coming back to Mike’s grandmother.
The question is, ‘What is in it for her?’
Well, let’s examine.
First, Mike has two more aunties, his grandmother’s surviving daughters. So, for this case, if Mike’s grandmother passed on after inheriting her stakes in the two properties, these stakes can be distributed to the two aunties via a valid will. So basically, the two aunties stand a chance to inherit these estates for nothing. So here, you may ask:
‘Is Mike’s grandmother pursuing the properties for her daughters’ interests?’
Or
‘Are Mike’s aunties interested in inheriting some stakes in the two properties?
Either way, they do not work in favor of Mike. His life has been disrupted.
If there is such a thing as a time machine, which could turn back time, what can Mike’s mother do to relieve him from such financial stress before passing on?
The answer is simple.
Mike’s mother could, at the very least, add onto her life insurance coverage and write herself a valid will document.
She can nominate her son to be the beneficiary of her life insurance policies. As such, if she passed on, Mike could use the money to service the mortgages.
In her will document, she can nominate Mike to inherit the two properties. This is so that the process of transferring the property ownership to Mike could be a lot easier, much faster, and with greater clarity.
Of course, if necessary, Mike’s mother could consider forming a trust as a useful add-on to solidify her estate planning. But for this, it would be more practical to do so after a professional detailed assessment on your financial situation, by an experienced professional estate planner.
Ideally speaking, it is wiser to have a professional estate planner to assist you in this area so that your assets could be managed and distributed more efficiently. You can start by filling up your details below to book yourself a short 30-minute consultation session to find out the latest practices to best protect your assets.
Here is a case that I have been working on for almost 1 year.
It involves a 25-year old executive. Let’s call him Mike.
Mike’s mother passed on intestate (without a will). She had two properties. The first property is valued at RM 500,000 and had RM 300,000 in outstanding loan. The second property is worth RM 600,000 and its outstanding loan stood at RM 400,000. The MRTAs of these two properties had expired before her passing. As it stands, the mortgage installments for both properties is RM 3,300 per month; the first is RM 1,500 a month and the second is RM 1,800 a month.
So, will Mike inherit the two properties from his mother?
The answer is nope.
In Mike’s case, he is the only son of his deceased mother, who is a divorcee. But his mother has a surviving parent, Mike’s 80-year old maternal grandmother. As stipulated in the Distribution Act 1958, the ownership of these real estates shall be splitted based on the ratio: Mike (75%) and Mike’s Grandmother (25%).
The process to transfer the ownership of these two properties takes time.
First, Mike requires the Letter of Administration (LOA) to begin administering all his mother’s estates, which include collection of her estates, making settlement of all her outstanding debts and taxes, and finally, distributing the balance to all her lawful beneficiaries, including his maternal grandmother.
Without complications, it could take around 18-24 months to complete.
In the meantime, who is servicing the loan installments for both properties?
Is it Mike alone? Or, is it Mike and his grandmother?
This is crucial because the banks still require mortgage payments for both these properties. The banks will auction them off if they fail to receive their payments for these two properties. Here, in Mike’s case, he is servicing both mortgages of RM 3,300 a month by himself as his grandmother is not willing to do so.
This is a huge commitment for Mike as his income is not high currently.
As a matter of fact, Mike is burning cash fast and his situation is becoming dire.
Now, as you read, you may ask, ‘Could Mike sell off the two properties?’
Theoretically, the answer is yes. But, he needs his grandmother’s approval prior to selling off the two properties. This is because his grandmother has 25% stake in both properties. So in Mike’s case, he failed to get his grandmother’s consent to dispose of the two properties. As such, Mike continues to try his level best to keep his mother’s properties, servicing their mortgage installments.
That is the issue with joint ownership or joint beneficiaries of a single property.
Presently, as I write, Mike had obtained the LOA to administer the estates of his mother. However, the issue now lies in the Distribution Order (DO) for there is a dispute on the ownership ratios for both of these properties between Mike and his grandmother. Mike’s grandmother is requesting 50% ownership for both the properties, which is more than what is stipulated in the Distribution Act 1958.
Hence, Mike’s grandmother refuses to sign the DO.
In desperation, Mike compromised. He is willing to forgo his rights to one of the two properties to his grandmother, which is the one situated at Old Klang Road. In exchange, Mike hopes his grandmother to forgo her rights on the property at Puchong. Mike will service the loan installment for the property at Puchong. His mother will service the loan installment for the property at Old Klang Road.
There are two benefits for such a compromise.
First, Mike is able to reduce some financial commitment.
Second, it eliminates all issues arising from joint ownership of a single property.
However, Mike’s grandmother has chosen to reject this offer. This is because for her, she intends to receive 50% stake in both properties without forking out any money. As such, Mike’s problems continue on.
By now, you may ask:
‘Why would an 80-year old grandma be so eager to get the two properties from her own daughter and Mike, her grandson?’
Or
‘What does she have against Mike, her grandson?’
Personally, as a professional estate planner with 9+ years in this industry, I think I’m more accustomed to the intricacies of human behavior. The challenges here are not so much on legalities, but on what seems to be fair for each beneficiary.
Getting all beneficiaries, even two, on the same page can be difficult.
Now, coming back to Mike’s grandmother.
The question is, ‘What is in it for her?’
Well, let’s examine.
First, Mike has two more aunties, his grandmother’s surviving daughters. So, for this case, if Mike’s grandmother passed on after inheriting her stakes in the two properties, these stakes can be distributed to the two aunties via a valid will. So basically, the two aunties stand a chance to inherit these estates for nothing. So here, you may ask:
‘Is Mike’s grandmother pursuing the properties for her daughters’ interests?’
Or
‘Are Mike’s aunties interested in inheriting some stakes in the two properties?
Either way, they do not work in favor of Mike. His life has been disrupted.
If there is such a thing as a time machine, which could turn back time, what can Mike’s mother do to relieve him from such financial stress before passing on?
The answer is simple.
Mike’s mother could, at the very least, add onto her life insurance coverage and write herself a valid will document.
She can nominate her son to be the beneficiary of her life insurance policies. As such, if she passed on, Mike could use the money to service the mortgages.
In her will document, she can nominate Mike to inherit the two properties. This is so that the process of transferring the property ownership to Mike could be a lot easier, much faster, and with greater clarity.
Of course, if necessary, Mike’s mother could consider forming a trust as a useful add-on to solidify her estate planning. But for this, it would be more practical to do so after a professional detailed assessment on your financial situation, by an experienced professional estate planner.
Ideally speaking, it is wiser to have a professional estate planner to assist you in this area so that your assets could be managed and distributed more efficiently. You can start by filling up your details below to book yourself a short 30-minute consultation session to find out the latest practices to best protect your assets.
