If you’re a parent, it’s natural to want to leave your home to your children, even while they’re still young.
But what happens if your children are under 18? Can they legally inherit your house? And what if they’re too young to manage such a valuable asset?
Here’s what you need to know.
Minor Children Cannot Legally Own Property in Malaysia
Under Malaysian law (Age of Majority Act 1971), anyone below 18 is considered a minor. That means they can’t legally own or manage property, including a house. Even though your Will says the house goes to them, the law doesn’t allow a minor to directly own or sell the house.
In practice, the Land Office will not register a minor as the owner of property. Instead, the property must be held on trust until the child reaches legal majority or another age you specify.
Who Will Hold the Property on Trust?
That depends on how your Will is structured. There are two possibilities:
Scenario 1: You Leave the House in Your Will Without Setting Up a Testamentary Trust
In this case, your executor will automatically act as a trustee for your minor children.
Under the Trustee Act 1949, trustees (including executors) are empowered to manage and hold property on behalf of beneficiaries, including minor children.
The executor must hold the house on trust until your children reach 18 years old. After that, the property must be transferred to them. However, at 18, they will have full control over the property, meaning they can sell it or rent it out without restriction.
Scenario 2: You Set Up a Testamentary Trust in Your Will
Instead of transferring the house at 18, you can create a testamentary trust in your Will. This allows you to:
- Appoint a trustee (an individual or a trustee company like Amanah Raya Berhad)
- Set a later vesting age (e.g. 21, 25, or 30)
Again, this arrangement is supported by the Trustee Act 1949, which allows a trustee to manage property according to the terms set in the Testamentary Trust deed.
Here’s a comparison of both scenarios:
| Key Difference | Without Testamentary Trust | With Testamentary Trust |
| Age to receive the property | 18 | You choose |
| Control over property | Children can have full control at 18 | Controlled by trustee until the children reach the age to receive it |
Example: Mr. Tan and his two minor children
Mr. Tan has two young children, aged 8 and 10. In his Will, he writes: “I give my house in Subang Jaya to my children equally.”
If Mr. Tan does not set up a trust:
- The executor will hold the house on trust until both children reach 18.
- At 18, they will become joint legal owners and can sell the house, even if they are still studying or financially dependent.
If Mr. Tan sets up a testamentary trust:
- The trustee will manage the house until the children reach, for example, age 25.
- During this period, the house can be rented out for income or maintained for their future use.
- The trustee will only transfer the house to them once they reach the age specified by Mr. Tan.
Should You Set Up a Testamentary Trust?
If you’re leaving a house to your minor children, ask yourself:
- Will they be financially responsible at 18?
- Do you want to stop them from selling the house too early?
- Would you prefer a trustee to guide them until they’re older?
If you answered yes to any of these, then a testamentary trust is not just useful, but it’s essential.
As we’ve shared in our previous articles:
How can a testamentary trust secure your children’s future better than a simple will?
How can a testamentary trust secure your children’s future better than a simple will? – Part 2
A simple Will may not provide the protection your children truly need.
Yes, you can leave your house to your minor children in a Will. But the real question is: will they be ready to manage it at 18?
If you want to make sure the property truly benefits your children, not just legally, but practically and wisely, then setting up a testamentary trust is the smarter choice.
You may make an appointment with our legal advisor here: https://calendly.com/finex-and-co-legacy-advisory/tea-talk-with-legal-expert
