Wew not even one day ...

@cherroy FYA

That's a general context.

I've already explained in post 5898 and 5900 on what are the conditions.

Told for my case as posted earlier
"Reinforcing my belief as a non Muslim as a person that has a will written and has a legal spouse and children...
That they ( my nominees) will get my money fast and without going into an estate."

For the benefit of the public. Please read.

The role of trustees
Trustee(s) can also be appointed to receive the policy moneys in a trust policy. Upon the demise of the policy owner, the trustee’s duties would be to receive the policy moneys and distribute them to the nominees accordingly. The trustees must act in the best interest of the nominees at all times.
The appointment of trustee(s) is especially important for children below 18 years of age because, legally, minors are considered incompetent to enter into a contract and therefore not able to receive the policy moneys directly. Where no trustee is appointed and a child is the nominee of the policy, the surviving parent is the trustee. Where there is no surviving parent, the Public Trustee shall be the trustee. Upon receiving the policy moneys from the insurance company by the trustee, the insurance company shall be discharged of all liabilities in respect of the policy
moneys paid to the trustee(s).
In the case where a nominee is 18 years old and above, and no trustee has been appointed, the nominee shall act as the trustee of the policy moneys.

MCIS NOMINATION

Whether you are a trustee or nominee does not mean you are the sole beneficiary. You still have to account for the other nominees and the will/estate of the deceased

• Trust Policy - an insurance policy in which the nominee is the policy owner’s spouse or child, or where there is no living spouse or child at the time of nomination, his parent.
Under such a policy, the policy moneys do not form part of the estate of the deceased
policy owner and is not subjected to his debts.
• Trustee - a person who is given the legal title to the property which he holds not for his
own benefit but on trust for the benefit or interest of another or others.

This post has been edited by hafizmamak85: Jun 19 2024, 02:59 PM

Whoever is the named nominee will receive the insurance proceeds.
This part clear kan?

Then the issue now is
1. who is the rightful owner of said monies?
Hence the need to identify the person receiving the monies.
Are they receiving it as an executor, or are they receiving it as the rightful beneficiary?

2. does this form part of the deceased estate to be distributed?
Answer is no because the banks and all creditors get first dibs on the deceased estate, leaving the remaining balance to then be distributed to the rightful heirs.
Whereas the Life Insurance proceeds is immune against such creditors.

Sorry, but I was under the impression that this is common knowledge??? (Maybe I am in a bubble, so I apologize)
I'm shocked for someone who "used to work in BNM" to be confused about this?????

I don't see why suddenly got a big issue about nomination all the sudden.

Either hafiz is trying to confuse everyone or spin a scenario into oblivion or generally majority has no idea how nomination work.

If it is not part of a trust policy, as in any one of the nominees is not a trust nominee, then the proceeds from insurance policy claims do form part of the deceased estate and creditors will access to it.

Only under circumstances where it is a trust policy, where a nominee is a trust nominee, would creditors not have access to it.

Whether it is a trust nominee or a plain nominee, they are both not sole beneficiaries. There are other nominees/beneficiaries to be accounted for.

This post has been edited by hafizmamak85: Jun 19 2024, 09:16 PM

Appreciate it if you could share in detail why you think that absolute assignment is the better option to go for in a scenario where a trust nomination is sufficient.

Thanks!

If the policy owner (non muslim) has no spouse/kid but has a living parent, and he put sister as nominee (100%), then die without a will:
1) the insurance money is not part of estate and creditors can't go after it
2) sister must distribute all the insurance money to the parent (insurance money don't belong to sister although she is the nominee)

Are the above correct?

This post has been edited by poweredbydiscuz: Jun 19 2024, 03:33 PM

No lah that is not enough for us layman

Whoever named will receive the proceeds should only be spoken amongst you guys insurance people

For public, instantly that would raise a misunderstanding ,
oh i am named i get to spend the money

Should be direct and aimed to answer the question in discussion, can you take that money as your own if you are a named beneficiary?

Straight to the point

if you are not parents spouse or children, even if you are named in insurance policy as beneficiary dont hope you can get that money to enjoy , you would only receive the money as executor, to distribute the money later on to their rightful owners

No need 2nd part .

Simple argument. An absolute assignment means you've (assignor) transferred all rights and interests including liabilities (premium payment) to the assignee. They are now the owners of the policy for all intents and purposes. Up to them to maintain it and all benefit proceeds accrue to the assignee and not the assignor. No question of estate issues etc. The assignor's debts and other obligations (familial etc.) do not have any relationship with the assigned policy. The assignor might now only be the insured life in the assigned policy.

There is another kind of assignment called partial assignment. A partially assigned policy, this needs to be confirmed so please do check with your insurer how they operationalize this, means the rights and interests in the policy are transferred to the assignee but the assignor still maintains the main liability (premium payment). In such an instance, any varying to the policy would need the partial assignee's okay before it can proceed.

Both partial and absolutely assigned policies do not form part of the assignor's estate and are not subject to creditors.

All nominee policies, unless they are trust nominee policies, are subject to creditors

This post has been edited by hafizmamak85: Jun 19 2024, 03:47 PM

1. Insurance payout will fall under the deceased estate and will be subject to his debts.
2. The sister shall distribute the money in accordance to the Distribution Act 1958 since the brother died Intestate.

Normally under this proposal, who will be the one covering the stamp duty? Are you aware of the latest cost incurred for doing an assignment?

Thanks.

The public most likely don't know about this. Definitely not a common knowledge.

My understanding is that stamp duty only costs RM 10. No other costs that I'm aware of. Oh, I think need to go to a Commisioner of oaths I think. This part I'm not sure. Have to confirm with the insurer's policy servicing department. The assignor will have to cover the costs.



This post has been edited by hafizmamak85: Jun 19 2024, 04:15 PM

Oh another thing. Families are complex or simple, depends on how you view it. Let's say you are the main breadwinner and you have a large family. You got grandparents, children and maybe nephew nieces to care for. You have a loving and caring wife but you want to ensure if something happens to you all will be taken care of.

If you don't want to do a full/partial assignment, put your wife as a nominee (the trust nominee) and all other family members, name them as nominees as well. Additionally, go to commisioner of oaths and sign a statement telling how you want each of the nominees to be taken care of and make sure you give this to the insurer upon policy application and make sure all other nominees have this info.

Ask your insurer to ensure all nominees are named in the policy document (addendum). This way creditors cannot touch your policy and all nominees will be taken care of. This is how I think it works but please do check with your respective insurers..

Last time when I checked with the policy servicing department, I remember them telling me can put percentage of sum assured to be received for each nominee. I don't know if can do anything more complex than that, but if you have a way you think you want your nominees to be taken care of, go to commisioner of oaths put everything in paper, bring your main trust nominee along and ask her to sign an understanding.

Make sure you confirm with the insurer that your policy is a trust policy even though you have multiple other nominees who may be both beneficiaries/executors. Also confirm with the insurer that if the insurer splits the claim benefit payment upfront according to the percentage you've assigned to each of the nominees that their portions will not be subject to your creditors.

This post has been edited by hafizmamak85: Jun 19 2024, 04:37 PM

I see.

So again back to my question, assuming that by doing an assignment there is a 1% stamp duty on the policy coverage value (assuming RM500k = RM5k stamp duty), would you still do an assignment if a Trust Nomination is sufficient? Does this change your point of view on the matter?

Best,
Jiansheng

I bought HLA 3 generation insurance more than 20yrs ago life insured my kids, me policy owner. Fully paid up, the policy is paying rm5k a year to me for life. 4kids i got rm20k a year.

Recently i assigned the policy to each of them, anything happens to me the policy belongs to my kid, they can go claim the policy from HLA as their own and enjoy the rm5k yearly pay out

This assignment is partial? I am still the owner as long as i am around. HLA asked if i needed stamping then pay rm10, i said no need still valid same, HLA said yes valid just the same So assignment foc

In the above example scenario of having complex estate planning aspirations, it would then make sense to set up an Insurance Trust (Things to consider: Trust Deed, Beneficiaries, Trustee, and Protectors).

It all comes back to the initial discussion:
Trust nomination: Does not form part of the estate, creditor proof.
Non-trust nomination: Goes back to the estate - Follow residual clause in Will if not stated how to split the life insurance proceeds. No Will, follow the distribution act. Not creditor proof.

Using a commissioner of oath on these matters? Haven't heard that done.

Perhaps estate planning will warrant its own thread.

Best,
Jiansheng

Assuming that there are those charges and if it is possible to do a trust nomination and ensure all beneficiaries are taken care off the way you want them to be taken care off, sure, why not. But are you certain those charges are there if it is a partial assignment? When did this come out, 2022?