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My Lord! He Is 100% My Father

ipoh | March 10, 2010 | 0 Comments

By Peter Lee

Peter Lee

Taiwanese plastic magnate, Wang Yung-ching died at the age of 91 in year 2008 without a will. He left behind a wife, 9 children with other women and a personal fortune estimated at nearly RM24.6 billion. Several of Wang’s 9 children want to be the administrator of his estate. All of the children stood before the judge and said: “My Lord! He is 100% my father”. The battle for the billions was so complex that one of the children’s lawyer opened arguments by displaying an elaborate family tree and a diagram of Wang’s holdings in several countries.

If this case were to occur in Malaysia, then the estate would have to apply for a Letter of Administration (LA) when there is no will. Before family members apply for LA, they have to first appoint an Administrator (or if there are minor beneficiaries, at least 2 Administrators are required). The Administrator will have to be agreed upon by ALL the beneficiaries. This will be difficult for Wang’s case as several of the children wants to be appointed as the Administrator. The court will not be able to intervene when the beneficiaries cannot agree on the appointment of an Administrator. Until such time, the estate is frozen and no beneficiary has any legal right to deal with the estate. If and when an Administrator can be agreed upon, there is a need to have at least 2 Sureties (who act as Guarantors) to provide an Administration Bond that is equivalent to the gross estate value of the deceased. The requirement of an Administration Bond is required under the Probate and Administration Act 1959. The question here is how many individuals have assets that are equivalent to the gross estate value of the deceased and whether he/she would want to provide such an Administration Bond? The purpose of the Administration Bond is to ensure that the inheritance of the beneficiaries is protected in the event the Administrator absconds with the assets of the estate, where the Sureties will have to pay for the loss created by the Administrator.

The next issue is to identify the legal wife of the deceased (assuming the deceased is a male). Under the Malaysian law for non-Muslim, if a man married 2 wives before 1^st March, 1982 by way of customary marriage, both wives are legal wives. However, if one wife was married before 1^st March by customary marriage and another after 1^st March by way of registration, the legal wife will be the one that was married before 1^st March. If there was no marriage before 1^st March and a marriage took place after 1^st March by registration, this would be the only legal marriage because any marriage that took place after 1^st March 1982 to be valid must be registered and monogamous. The legitimacy of the children will depend very much on the status of their mothers, whether as legal wife or not. If they are illegitimate, then under the Malaysian intestacy law (Distribution Act 1958, as amended in 1997), they will not be entitled to inherit their father’s estate.

If Wang is a Malaysian, the problems above can be easily avoided by getting a will and/or trust done. As the estate of Mr. Wang is substantial, it is important to appoint a licensed trustee company like Rockwills Trustee Bhd to be the Executor and Trustee of his will and trust. The reason for appointing a Trustee Company is to ensure that they are impartial, provide continuity, accountable and are experts in carrying out their responsibilities. When applying for the Grant of Probate (GOP), the Executor/Trustee will obtain the Death Certificate from family members. If individual Executors were to be appointed, they may face the problem of obtaining the Death Certificate because it may be due to other rival family members holding to it as a bargaining power. This would eventually delay the process of applying for the GOP.

Under such complex circumstances as Mr. Wang’s, it is advisable to do a will for one family and setting up separate trust for other families. This would avoid a clash in distribution of specific assets to different family members. By planning for a proper estate distribution, it will avoid as much as possible conflicts between family members.

Peter Lee is an Associate Estate Planning Practitioner (Wills & Trust) with RockWills International Group. He is also an Islamic Estate Planner providing Wills & Trust services for Muslims. He is based in Ipoh and can be reached at: 012-5078825/05-2554853 or excelsec@streamyx.com.