For our next article in our series of Comparative Jurisdictions, we find touching on another similar civil code legal system would be helpful for planning an expatriate’s legacy. Succession in Netherlands are governed by the Dutch Civil Code, whereas in Malaysia it is government by Probate and Administration Act. Some similarities and differences can be found in both inheritance systems.
System of forced heirship
The system of forced heirship restricts the distribution of an estate, where certain beneficiaries are entitled to a fixed portion in the estate.
In Netherlands, the forced heirship principle protects the children of the deceased. The children of the deceased may make a pecuniary claim of 50% of what they would have received on intestacy if they were disinherited.
In Malaysia, a testator is free to distribute his or her estate according to his or her choice. The will is a legal document recording the testator’s intention and in order to be effective this document need to adhere to our local inheritance laws. A dutch expat having Malaysian assets may wish to consider separating the legacies here and the Netherlands for reasons of say, a second marriage and/or where there are children from a first marriage. Such a scenario requires good legacy planning by a professional who are specialized in multi-jurisdictional assets. Failure to plan ahead may open beneficiaries to litigation over the 2 or more estates in different legal systems which may drain the estate in legal costs.
Distribution of intestate estates
In Netherlands, the intestate estate will also be equally distributed between the spouse or registered partner and children, but the order of distribution is slightly different. If there is no surviving spouse, partner, or children, the parents and siblings are next in line, followed by the grandparents and great-grandparents.
In Malaysia, the intestate estate will be distributed according to the Distribution Act which apportioned the shares between the spouse and children. If there is no surviving spouse, or children then parents are next in line. On this basis, any expat earning income here in Malaysia is wise to leave a local will behind with expressed provisions on who is to benefit, especially for an unmarried partner with no legal rights at all here. One is never too young to do so having regard to our experience of the sudden onset of pandemic in year 2020.
Unless there is a prenuptial agreement stating otherwise, married couples in Netherlands will jointly own all assets acquired during their marriage (only for marriages after 1st January 2018). In the event of death, the surviving spouse or partner automatically retains their half, and the other half forms part of the deceased’s estate.
In Malaysia, property ownership are governed by the National Land Code and registration of the title of ownership determines the legal right. The previous English Rule of right of survivorship is no longer applicable to Malaysia, so having 2 names jointly on the title does not mean the survivor will inherit the whole share on a death. A Grant of Probate is required to deal with the share belonging to the deceased spouse and a transfer through the Land Registry of Malaysia is compulsory.
Having a separate will for Malaysia properly drawn up by an experienced legacy planner if you are from Netherlands or elsewhere is essential as different rules of inheritance is applicable. Unintended revocation of wills from your country of origin vis a vis the local will for Malaysia is to be avoided at all costs.
To learn more on :
- How to draw up a Will for Malaysia without contradicting my Will from overseas ?
- Creating Wills / Legal Instruments which are in compliance with local laws