Show Me The Money

Stimulus Package is the most current and important buzzword in Malaysia and around the world as most of countries are on lockdown or curfew or restricted movement order for a specified period of time. All this is due to the invisible Coronavirus causing such a pandemic .

As we abide by the movement control order (MCO) until 28th April, 2020, our daily lives have been disrupted and nearly all our businesses have to be closed temporarily. In view of this desperate situation, the Malaysian government announced a RM 250 billion stimulus package on 27th March, 2020 to support household incomes and cash flow for businesses. This is the most important commodity in everyone’s mind.

From the total amount of stimulus package announced, you would noticed that RM 10 billion was allocated as cash payments to households and individuals which includes retirees, civil servants and college students all of which are in the lower and some middle income group (ie. B 40 and M 40). This is a short term measure to alleviate income loss from the MCO.

However, this package did not address the issue of cash relief in the form grants to owners of small and medium sized enterprises (SMEs) especially when they are the backbone of our economy. After complaints and feedbacks from business association, the government decided to unveiled a special stimulus package worth RM 10 billion for the SMEs on the 6th April, 2020. This is supposed to ease the burden of 700,000 micro SMEs nationwide which contributes 40% of Malaysia’s economy.

At least there is something better than nothing even though there are many other industries especially hoteliers who are still calling for SOS. Some hotels in Ipoh for example have already stopped or suspended their operation due to no income and high operation cost.

While talking about the stimulus package for a country, it is also time for us to plan on how best we could distribute our own stimulus package to our own family as fast as possible when we are no longer around. It is understandable that most of us will be all stressed up by now due the MCO and most likely concentrate on questions like, when will MCO be lifted and return to our daily lives, when is the financial assistance coming from the government, what will happen to my business and will I lose my job after this?

Worrying about the future is perfectly normal but at the same time, we must not lose sight of the present. In other words, since we have the time during this lockdown, why not check on the list of existing assets we have . For example , savings in our bank, investments , properties , shares in our business, cars, EPF, insurance coverage etc.

Please also check whether you have done your nomination for Epf and Insurance. During this MCO it gives all of us time to reflect on what is important and what we need to do after the MCO. One of the most important things you should be thinking of since there is a danger of being infected is to get our will done for our family.
Without a will, the distribution of your wealth and assets will definitely encounter a lockdown for a certain period of time. This means that all your assets will be frozen and to unlocked them would require the estate to go through a legal process.
When a non-muslim passed away intestate (without a will), his/her family will have to apply for a Letter of Administration (L.A) and distribution must comply with the Distribution Act, 1958 (amended in 1997) in which their estate will be distributed to their spouse (1/4), parents (1/4) and children (2/4).

As for a muslim who passed away intestate, his/her family will have to also apply for a Letter of Administration (L.A) and their distribution must comply to the Muslim inheritance law or Faraidh. If the deceased is a male, then his estate will be distributed to his spouse (1/8), Father (1/6), Mother (1/6), Son (13/72) and daughter (13/36).

To apply for the L.A., family members of the deceased must first choose the Administrator/s to administer the deceased estate. Such appointments requires consent from all lawful beneficiaries. If all of them disagree with the appointments, then family members are unable to even kickstart the L.A application. Assuming this happens, all of our assets will be in a total lockdown. Therefore, the question is when will your beneficiaries get their funding especially if they are minors and immediate funding is of utmost importance to finance their daily expenditure.

Therefore, to avoid your family making decision for your estate distribution, you need to take charge on this matter during your lifetime . All you need to do first, is to start thinking of who you want to choose as Executors/Trustee in your will to manage your estate. If you have minor children, then think of a suitable person of your choice to be appointed as Guardian for your children if you and your spouse passed away.

As for distribution to your beneficiaries , you can specify all the assets which you want to distribute and if it involves children, then set up a Testamentary Trust in your will so that your minor children can receive the distribution progressively in the absence of both you and your spouse.

Separately , you can also consider setting up a “Living Trust” as immediate funding for your children whereby an Insurance policy can be assigned to the Trust. In this way , when you passed on, all the money from the insurance will be released to the Trustee immediately for distribution .

The decision to start thinking and planning for your estate is in your hands. As you watch the daily news, it is alarming and frightening to see so many deaths in Malaysia and around the world especially Italy, Spain, U.S. etc. Even the British Prime Minister is fighting for his life. There will be no time for a person to think of other matters except saving his own life if he is in this position. My prayers goes out to him for a speedy recovery. Therefore, please do it while you have the time and if you are not sure how to handle it, then seek for professional advice from estate planners or lawyers. Plan it well so that your distribution will be available fast before your family desperately shouts for “ show me the money” .

Finally, my prayers also goes out to all of you to stay safe, stay home, stay strong and stay healthy.