Wednesday, September 23, 2015

Where there's a will, there's a way...

but where there's no will, there's Distribution Act, 1958 (as amended in 1997).

The first used to ​mean that 'if you are ​determined enough, you can ​find a way to ​achieve what you ​want, ​even if it is very ​difficult.'

But the second used a play on the word 'will' which refers to 'a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the distribution of his or her property at death'.

I am fascinated by wills, or their absence (intestacy - where a person died without leaving a valid will), because of the many interesting but often heart-breaking instances in real life as well as in fiction, caused by wills or because of intestacy.

In Malaysia, where non-Muslims are concerned, in cases of intestacy, the Distribution Act, 1958, as amended in 1997, applies. The following is a summary supplied by Rockwills:

When a person pass away without a Will, after all the debts are paid the administrator must distribute the remainder of his estate according to the section 6 of the Distribution Act 1958 (As amended in 1997) to lawful beneficiaries.

Section 6 of the Distribution Act 1958 (As amended in 1997) provides the following:
1. Spouse only alive (without parents or issue) – whole estate to surviving spouse
2. Issue only alive (without spouse or parents) – whole estate to issue equally
3. Parents only alive (without spouse or issue) – whole estate to parents
4. Spouse and issue alive (without parents) – spouse – 1/3 & issue – 2/3
5. Spouse, issue and parents alive – spouse – 1/4, issue – 1/2 & parents – 1/4
6. Spouse and parents alive (without issue) – spouse – 1/2 & parents – 1/2
7. Issue and parents alive (without spouse) – issue – 2/3 & parents – 1/3

The following person(s) are entitled in accordance to priority when an intestate dies without leaving a surviving spouse, child or parent:

 brothers & sisters
 grandparents
 uncles & aunts
 great grandparents
 great uncles & aunts
 government

Note:
Issue: includes children and descendants of children.
Parent: Natural mother or farther of a child or the lawful mother and father of a child under the Adoption Act 1952.

It is amazing how the subject of distribution could be the cause of a wide variety of family quarrels, some of which ended up in the courts for judgment. Like written agreements, there is no perfect will. Someone somehow will feel aggrieved by its provisions.

For example, the will could treat all children as equal in distribution. Yet a normally favoured child might feel he should be entitled to more. Some Chinese families discriminate between sons and daughters: eg. daughters get lifetime gifts while only the sons share everything left upon death of testator. Some compromise by giving sons each a full share while daughters get half share. When a father did that and mother decided on equal share in her estate, one of the sons actually complained.

There is an actual case which has yet to be resolved. Years ago, maternal grandfather died intestate, leaving behind his widow and 3 children (2 sons and 1 daughter). According to the law, the widow got 1/3, while the remaining 2/3 was shared equally among the 3, each getting 2/9 of the estate.
The relationship between in-laws were not amicable for various reasons. Out of anger, one day the son-in-law told his wife that she should give up her share in her father's estate. One of her nephews jumped on that decision and to make it legal, actually took her to a lawyer's office to sign a will which in effect, bequeath her share to be distributed equally between her two brothers, directly naming their children as beneficiaries.

That will was prepared in 1975. Though with the knowledge of her children, it was anybody's guess how she actually felt. The children could sense her anger each time the matter was mentioned, and it could be due to the undue pressure from her nephew or that she had to listen to her husband against her own wish.

Years later, she asked one of her sons to prepare for her a simple will which was properly done. There was no mention of her earlier will. After her death in 1993, a Grant of Probate was granted by the High Court and her estate (excluding her share in her father's estate) was duly distributed equally among her children.

According to my basic knowledge in wills, a new will supersedes any earlier will. This means her will in 1975 had been invalidated by the later will. The main item in her father's estate is a piece of land in KL which has till today, remains unsold. There was no effort in carrying out her earlier will, by legal process, to actually transfer her share to the named beneficiaries. In other words, if that will had been invalidated by the later will, her share in her father's estate remains intact and can be considered part of her estate which can be distributed according to her new will, to her children. It could be considered as an item missing when application was made for a Grant of Probate.

When she was alive, there was a compulsory acquisition of a part of the land by the government because of road expansion. The Administrator of the Estate actually prepared a cheque for her, being her share of the compensation. She said, 'Told you I don't want any share of it, please take it back and share accordingly.' Why she said that could be due to one of a number of reasons. Being illiterate, she could be ignorant of her right as to whether she could change her mind since she made the will many years ago. As usual, her tone was one of anger each time the matter was referred to. It was simply based on a so-called 'gentleman's agreement' which was actually her husband's decision, not hers. To go back on such a promise would not seem nice. Words by some of her nephews or nieces to that effect actually troubled her. But while on the subject of honour, many questioned why the Administrator actually got the whole of his grandmother's 1/3 share of the original estate! Was there fraud or undue influence involved in the direct transfer of her share?

It should be noted that the issue of a cheque by the Estate Administrator for her share in the government compensation for compulsory acquisition, was proof or acknowledgement that her share remains intact. Unless there was any dishonest attempt at changing that fact without the knowledge of her children, the Administrator has to acknowledge the rights of her beneficiaries according to her valid will. Until the subject land is up for sale, the matter remains a mystery and a subject of discussion among would be beneficiaries. This could be a subject of future litigation.

I am also prompted to write on wills by the current serial on 8TV, TVB's Will Power, which is being aired (7.00 to 8.00 pm) from Monday to Friday.

The first episode really caught my attention because of the unusual terms in a will. A very rich man died, leaving behind his widow and two sons, as well as a secret mistress and her son (remains a secret until later).

The first part of the will provides for HK$300,000 monthly allowance each to his widow and their two sons. The second part provides for release of sufficient sums for any business venture proposed by the sons, subject to approval of a Committee of Trustees. The third and final part shall only be revealed 3 years after his death.

The initial reaction from the elder son was one of shock and disbelief, that the main part of his father's wealth has to be controlled by a group of outsiders for at least 3 years, and that he could not possibly live on HK$300,000 a month!

Anyway, the script (with more revelations of different cases in the process) is interesting enough for me to look forward to watching each episode.

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