The following story is based on an actual series of events, with some names and circumstances fictionalised. Any similarity to any person’s name, character, or history is entirely coincidental and unintentional. Hope that we better understand the importance of having estate planning documents set up as soon as possible.
Ted was a close friend of mine. He had always struck me as a kind of bon vivant, enjoying life through fine foods and adventurous travels with a small group of friends.
One day, out of the blue, he called me to meet up with him urgently. At a café in Damansara, he told me that he had just taken a health check that indicated heart palpitations, and he was due for a full heart check-up the following week.
As such, he said he wanted to do a Will and a Trust, which he wanted to be done through me personally. I told him I was happy to oblige and started with a run-through of what he owned and owed.
He had just moved into a large bungalow in an affluent area, and apart from various objets d’art and jewellery and four luxury cars, his biggest asset was his investment in Hong Kong.
This was a trading company in which Ted had a 50% share, with a local Chinese who was his old schoolmate and partner for some twenty years. The company did very well in its contracts with China. The investment was significant because he could draw a salary of USD 50,000 monthly from the business and had been doing so for the last two years.
However, the shareholding was in his partner’s name to fulfil local bidding requirements. He did not have any documentation to show his share of interest because they had both started the business based on trust.
I told Ted that, apart from setting up a will and naming his distribution wishes, he had to, as a matter of urgency, set up a trust that his partner should sign, acknowledging his beneficial interest. He agreed and named his wife and two daughters as beneficiaries. He asked me to proceed with the estate planning documents as soon as possible.
The estate planning documents were ready for him within a week, and we were to meet on a Sunday for him to sign. He, however, postponed the meeting to the following weekend and the weekend after that because of some ‘urgent business’ in Hong Kong he had to attend to.
He said he would take the opportunity then to inform his partner of the trust deed to be executed. Unfortunately, he died of cardiac arrest on the eve of the day he was due to sign his documents.
Just A Tad Late On The Estate Planning Documents
All of us were in shock. The family and I gathered shortly after the funeral to review his files and estate planning documents.
He had a rather messy record, but after painstaking work, it transpired that Ted had living parents and a sizeable debt – several million ringgit in the form of the house mortgage, a million ringgit in unsettled hire purchase, several hundred thousand ringgit in tax and about a hundred thousand ringgit incurred through ten credit cards.
So, sadly for the family, they had to apply for letters of administration because of the lack of a will, and a quarter of Ted’s estate had to be shared with his parents.
The most tragic part was that the so-called trusted friend and business partner in Hong Kong denied that Ted had any beneficial interest in the company shares (which were estimated to be worth USD 5 million for Ted’s 50% holding).
In consequence, not only was the distribution of the estate considerably delayed, but the net value of the estate left for the family was drastically reduced, and the house they had just moved into had to be sold to pay for the debts in a moribund property market.
It would have made a difference if Ted had signed his estate planning documents on time!
About Rockwills International Group
Rockwills International Group, now in its 28th year, pioneered professional will writing in 1995 and has since evolved into the leading estate planning specialist in the country. It is today the largest provider of solutions and support services in the areas of trusts, succession, management and distribution of wealth. It has shareholders’ funds exceeding RM50 million. It has done over 280,000 wills and 15,000 trusts and hold more than RM25 billion in assets under trust.
