Let me share a situation I recently encountered. It’s not uncommon, and if you’re a parent with young children, you might find yourself thinking the same way.
I met a client, let’s call him Mr. L. His wife had passed away, and he’s now raising two children aged 13 and 14 on his own. Understandably, his priority is simple: make sure his kids are taken care of, even if something happens to him.
Financially, Mr. L is in a solid position. His assets include:
- RM700,000 in cash, stocks, and unit trusts
- RM3 million in life insurance
- RM1 million worth of property
His plan? Leave everything to his children equally. And for practical reasons, he was thinking of appointing his brother and sister-in-law as executor and trustee.
Sounds straightforward, right? Family helps family. That’s what most people would do.
But this is the part many don’t think through.
What Could Go Wrong?
Once Mr. L passes on, his brother and sister-in-law would take over as executors and trustees. They would receive the insurance money, manage the investments, and hold all the assets for the children until they turn 18.
That means they would be controlling millions of ringgit on behalf of two teenagers.
I told Mr. L about a case I saw a few years ago. The executor didn’t steal, he just kept “borrowing” from the estate to cover his business cash flow. He always meant to return it. He never did. By the time the child was old enough to ask questions, the money was gone.
In another family, the executor simply told the children,
“Your father left you RM300,000.”
In reality, there was over RM2 million. The children didn’t know, because nobody had ever shown them what their father actually owned.
There was no automatic check-and-balance system. No one verifying what was being received, spent, or invested. The children were too young to question anything. And when they finally did, it was too late.
These things don’t always happen because people are evil. More often, they happen because of temptation, poor boundaries, or simply nobody watching.
Is There a Better Way?
Definitely. Here’s what I told Mr. L and it’s advice I give to any parent in a similar position.
Step 1: Write a Will with a Testamentary Trust
Having a will is the foundation. But to really protect children, the will needs more than just names, it needs control.
In one case I handled, a child received a large inheritance at 18 and spent most of it within two years. Not because he was reckless, but because no one had ever taught him how to manage money.
With a testamentary trust, you can decide:
- When money is released
- How it is used
- And how much is given at each stage of life
For example, instead of everything at 18, the trust can pay monthly living and education expenses, with full access only later, say at 28, when the child is more mature.
Step 2: Appoint a Professional Trustee Company
Relatives care about your children. But managing millions of ringgit requires more than good intentions.
I’ve seen them forget to file reports, or simply not keep proper records. Years later, nobody knows where the money went.
A licensed trustee company is regulated, audited, and legally accountable. They don’t rely on memory or goodwill, everything is documented and monitored.
Step 3: Appoint Family Members as Guardians, With a Monthly Allowance
Mr. L still wanted his brother and sister-in-law involved. That makes perfect sense.
So instead of giving them control over the money, they were appointed as guardians. The trust pays them a monthly allowance, for example RM2,000, to cover food, schooling, transport and daily expenses.
They focus on raising the children.
The trustee company handles the money.
No conflict. No temptation.
Step 4: Add a Protector for Oversight
In one case I handled, the trustee followed the rules, but not the spirit of the will. They delayed payments and ignored the family’s concerns.
A protector acts as a watchdog. Someone who can step in if things start going off track.
Mr. L left our meeting feeling relieved. Not because he distrusted his family, but because he knew no one would be put in a position to make mistakes or face temptation.
This isn’t about not trusting people. It’s about understanding human behaviour when money and pressure are involved.
If you’re a parent with young children, ask yourself:
- Who will actually control the money?
- Who checks them?
- Will my children know what I really left behind?
Don’t leave it to hope.
Leave it to a plan.
If this resonates with you, start the conversation early. Your children may not understand it now, but one day, they will.
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