A Coffee Chat That Changed My Perspective
Not long ago, I sat down with my old friend Mr. Tan at a café in Damansara. Over a hot cup of kopi, he confided something that many parents secretly worry about:
“What will happen to my children’s education if I’m not around one day?”
Like many Malaysian parents, Mr. Tan wanted to make sure his kids would have enough for their studies, no matter what life throws at him. He had thought about saving in fixed deposits, maybe even buying an insurance endowment. But he wasn’t fully convinced these were foolproof.
That’s when the conversation turned toward something more lasting — a Testamentary Trust.
What Exactly is a Testamentary Trust?
A testamentary trust is created under your Will. Unlike a living trust or a cash trust, it only kicks in after you pass away. The money, assets, or insurance payout you’ve set aside will then be transferred into the trust.
From there, a trustee (whom you appoint) manages and distributes the funds according to your instructions.
Think of it like leaving behind a roadmap with a safety vault. Instead of handing all the money at once to your kids (or worse, to relatives who might misuse it), the trust ensures that the money goes exactly where you want — for education, living expenses, or emergencies.
Why I Chose Testamentary Trust for Education
As a parent, my top priority is simple: I want my children to have the chance to study without financial burden. Here’s why a testamentary trust makes sense:
- Protection & Control – The trust ensures my children can only use the money for education-related expenses, like tuition fees, textbooks, or overseas university costs.
- No Misuse – The money doesn’t fall into the wrong hands. For minors, the trustee pays directly to the school/university instead of giving cash to the child.
- Flexibility – I can write in my Will:
- A monthly allowance until my child turns 21.
- Full payment of university fees as and when needed.
- A final lump sum at age 25, once they’re mature enough to handle money responsibly.
If Tomorrow Never Comes
Imagine this: Mr. Tan sets aside RM500,000 in his Will under a testamentary trust.
- His daughter, Jia Wei (age 10), receives yearly allocations for school and later for university.
- His son, Ming Hao (age 7), has his expenses covered until he graduates too.
- The trustee ensures the money is invested into Fixed Deposits so it continues to grow while supporting both children.
Even if something unexpected happens tomorrow, Mr. Tan has peace of mind knowing that education — his children’s future — is already secured.
Testamentary Trust vs. Just Leaving It in a Will
Some parents say, “I already have a Will, isn’t that enough?”
Here’s the difference:
- A Will alone simply passes the assets directly to the heirs. If your child is under 18, the executor will hold the money — and you lose control over how it’s used.
- A Testamentary Trust adds a protective layer, spelling out exactly how the money should be used and when it should be released.
It’s like the difference between leaving cash on the table… and locking it in a safe with instructions only you know.
The Takeaway for Parents
As parents, we work hard day and night for our children. But money alone isn’t enough — it needs structure, planning, and protection.
By setting up a testamentary trust, we’re not just leaving behind funds.
We’re leaving behind a plan. A promise that even if we’re gone, our children’s dreams won’t be.
So the question is:
If something happens tomorrow, do you want your children to receive just money… or a secure path to their future?
For further details, you may make an appointment with our legal advisor here:
https://calendly.com/finex-and-co-legacy-advisory/tea-talk-with-legal-expert
