To give or not
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.