Estate planning is often associated with married couples, but it is equally essential for unmarried couples, especially a Will is revoked through marriage or re-marriage unless the Will is made in contemplation of a specific marriage. This article explores the significance of estate planning for unmarried couples in Malaysia, delving into the legal protections available and providing insights into navigating the challenges associated with estate planning for unmarried partners.
Why estate planning is crucial?
(i) Lack of automatic rights
Section 6 of Distribution Act 1958 outlines the distribution when a deceased dies without a Will and his/her spouse has a right to the remainder of the deceased’s estate after all the debts are paid. However, unlike married couples who enjoy certain automatic legal rights, unmarried couples in Malaysia do not have the same privileges. This is due to the relationship between unmarried partners may not automatically be legally recognised in Malaysia. In the absence of legal documentation, the surviving partner may not automatically inherit assets.
A Will allows partners to specify how their assets should be distributed upon their death, ensuring that their wishes are legally recognised. Without leaving a Will, the distribution of assets may be subject to Distribution Act 1958, which may not align with the deceased’s intentions. Therefore, it is crucial to engage in estate planning to ensure the desired distribution of assets.
(ii) Guardianship of children
Addressing guardianship becomes paramount for unmarried partners who have children together. In the unfortunate event of one partner’s demise, the surviving partner, without a legally recognized relationship, may face challenges in maintaining custody if the biological or adoptive parent passes away.
Section 5 of Guardianship of Infant Act 1961 establishes that “…a mother shall have the same rights and authority as the law allows to a father, and the rights and authority of mother and father shall be equal.”. The central concern revolves around whether this section is applicable to illegitimate child. In Low Pak Houng v Tan Kok Keong [1998] 2 MLJ 322, High Court decided that this section does not apply to illegitimate children. But in recently, Federal Court held in the case of Sean O’Casey Patterson v Chan Hoong Poh & Ors [2011] 4 MLJ 137 that the biological father of an illegitimate child has equal parental rights with the mother. However, it is noteworthy that the father in this case underwent DNA test and was confirmed as the biological father of the child.
Although the highest court in Malaysia has given such ruling, but through guardianship arrangements in the estate plan, partner can provide clarity and legal weight to ensure the well-being and care of their children. Taking this proactive step ensures the children’s future in the absence of a recognized marital relationship, underscoring the importance of comprehensive estate planning for unmarried couples. Unmarried couple can also set up testamentary trust for their children. Kindly refer to our article “Why do you need to setup a Testamentary Trust for you minor children?”.
(iii) Business ownership and succession
When unmarried partners are involved in a business together, their estate planning should extend to address the future of the business in the event of one partner’s demise. This may involve implementing a buy-sell agreement, outlining precisely how the deceased partner’s share will be handled. By doing so, the partners can ensure a smooth transition, guaranteeing the business’s continuity without disrupting its operations. This strategic approach to business ownership and succession planning adds another layer to the importance of estate planning for unmarried couples in Malaysia.
Conclusion
Estate planning for unmarried couples in Malaysia is a proactive and essential step to protect the legal rights and interests of partners who have chosen not to marry. By understanding the challenges and utilizing legal tools such as will, unmarried couples can navigate the complexities of estate planning and ensure that their assets are distributed according to their wishes. Seeking professional legal advice is crucial to create a tailored estate plan that addresses the unique circumstances of unmarried partners in Malaysia, providing them with the legal protections they deserve.
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