To give or not

The Star Malaysia - Star2 - - INSIGHT - BHAG SINGH star2@thes­tar.com.my

Should a par­ent will his prop­erty to a child who is in debt?

AREADER writes to say that he is in the process of hav­ing his will drafted. He wants to di­vide all his prop­erty equally among all his chil­dren as he feels this is the best way.

Of course, if his wife survives him he would like his as­sets to be held in trust for the ben­e­fit of his wife as long as she lives. Only then will his prop­erty go to the chil­dren equally. That is fair.

In the case of a Mus­lim, only one-third can be given away by will to non-ben­e­fi­cia­ries. As far as the recog­nised ben­e­fi­cia­ries are con­cerned, their en­ti­tle­ment is fixed by law. Of course, there is noth­ing to pre­vent such a per­son from giv­ing away his prop­erty to any­one dur­ing his life­time.

But back to the ques­tion posed. While dis­cussing the mat­ter of his will with his so­lic­i­tors, the reader has come to know that one of his chil­dren is heav­ily in debt through his own loans and help­ing oth­ers ac­quire loans. The amount is al­most RM100,000 and it is not within the abil­ity of the child to pay.

What our reader wants to know is what will hap­pen to the amount or as­set that is willed to the par­tic­u­lar child who is in debt and cer­tainly un­able to pay the debts he has in­curred or has be­come re­spon­si­ble for.

The po­si­tion would be that the par­tic­u­lar as­set willed away to the child will still be­long to our reader as long as he lives. Given the ar­range­ment, it will also be held in trust for the wife if she out­lives him for so long as she lives. Dur­ing this pe­riod it will be be­yond the reach of any­one else.

Af­ter that, how­ever, the child – who by now is or will in due course be­come an adult – will be en­ti­tled to that part of the share that has been willed to him. leave the par­tic­u­lar child out of any in­her­i­tance in cir­cum­stances where this is per­mis­si­ble. But the par­ent, af­ter his demise, may still want to pro­vide for the child.

A pos­si­ble op­tion would be for the par­tic­u­lar as­set to be held in trust with the in­come from the as­set or through its liq­ui­da­tion to be used for the rea­son­able liv­ing ex­penses of the child to be paid to him dur­ing his life­time af­ter de­duct­ing the ex­penses.

It could also be pro­vided that the prop­erty be given to him at the dis­cre­tion of the trustee or when an event oc­curs sub­ject to con­di­tions. In ad­di­tion, it could be pro­vided that upon his death, the as­sets go to an­other child or to an in­sti­tu­tion cho­sen by the tes­ta­tor.

In this way, the child in ques­tion can be pro­vided for with an in­come for his up­keep in the event that any ac­tion to en­force a judg­ment is taken against him whilst at the same time “pro­tect­ing the as­set”.

Sit­u­a­tions like this cer­tainly pose dif­fi­cul­ties for the par­ent who, on the one hand, wants to pro­vide for his son or daugh­ter and on the other hand, can­not bear the thought of his hard-earned money be­ing used to pay cred­i­tors.

It also shows the un­cer­tainty that one can face in life. Such an end­ing for a per­son who has vi­su­alised work­ing hard to pro­vide for his chil­dren even af­ter his demise is cer­tainly not what one would have been imag­ined.

Fran­cis Ba­con in his book The Works of Fran­cis Ba­con writes: “If a man will be­gin with cer­tain­ties, he shall end in doubts; but if he will be con­tent to be with doubts, he shall end in cer­tain­ties”.

These are cer­tainly words to re­mem­ber.

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