Leaving Assets to Children Who Are Too Young to Inherit: What Malaysian Parents Need to Know

 

Many parents ask:
“What happens to my assets if my children are still too young?”

In Malaysia, minor children (below 18) cannot legally manage or receive assets outright. Without proper planning, assets can be frozen, mismanaged, or delayed by court processes.

Here’s how parents can protect their children effectively.

 

Why Children Can’t Inherit Directly

• Minors cannot manage money or property
• Banks and institutions won’t release funds to children
• Property cannot be freely registered in a minor’s name
• Courts may need to step in if no plan exists

Simply naming children in a will or nomination is not enough.

 

The Right Solution: A Trust

A trust allows you to:

• Appoint a trustee to manage assets
• Specify how money is used (education, medical, living expenses)
• Decide when children receive full control (e.g. 21, 25, 30

 

For Non-Muslim Families

Testamentary Trust (Via a Will)

• Created in your will
• Takes effect upon death
• Trustee manages assets until children reach a chosen age
• Requires probate but is cost-effective

Living Trust

• Set up during your lifetime
• Assets are managed immediately
• No disruption or delays after death
• Greater control and flexibility

 

For Muslim Families: Hibah Amanah

Hibah Amanah is a Syariah-compliant solution combining a lifetime gift (hibah) with trust management (amanah).

• Assets are gifted during lifetime
• Trustee manages assets for minor children
• Assets do not form part of the estate
• Avoids faraid disputes and delays

This is the preferred option for Muslim parents with young children.

 

Common Assets Parents Protect

• Cash and savings
• Property
• Investments
• Insurance or takaful proceeds

Choosing a Trustee

• Parents may appoint:
  • A trusted family member
  • A professional trustee
  • A licensed trust company

  For long-term planning, professional trustees offer neutrality and expertise.

 

Smart Distribution Planning

• Instead of giving everything at 18, many parents choose:
  • Monthly allowances
  • Direct payment of education and medical expenses
  • Staggered payouts at different ages

How Createwills.my Helps

Createwills.my helps parents:

• Arrange trusts for minor children
• Ensure legal and Syariah compliance
• Protect children’s inheritance until they are ready

Final Thought

• Estate planning isn’t about wealth—it’s about protecting your children when they need it most.A proper plan ensures your children are supported, protected, and provided for—no matter what happens.

Interested in learning more:
Hubungi help@createwills.my to find out how we can help you protect and provide for your children future.