A trust deed is the document creating a trust during your lifetime: you transfer assets to a trustee, who holds and manages them for the beneficiaries you name, on the terms you set. Unlike a will, which only takes effect on death, a trust created by deed operates as soon as it is properly constituted.
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| Settlor | The person creating the trust and transferring the assets into it |
|---|---|
| Trustee | The person or trust company holding legal title and managing the assets on the stated terms |
| Beneficiaries | Who benefits, and on what conditions |
| Trust property | The assets transferred into the trust, which must be clearly identified |
| Terms | What the trustee may and must do, and when beneficiaries receive |
| Governing law | Trustees are subject to Malaysian trustee legislation in addition to the terms of the deed |
Both are used in Malaysian estate planning and they do different jobs.
A trust created by deed during your lifetime takes effect once it is properly set up and the assets are transferred in. Because those assets are no longer owned by you, they do not form part of your estate on death and do not pass through the grant process. That also means you no longer own them, which is the point people underestimate.
A trust created by your will only comes into existence on death. The estate still goes through the grant process, and the executor then holds the relevant assets as trustee on the terms the will sets. It is simpler, cheaper and reversible during your lifetime, because you can change your will.
For many families a will with a properly drafted trust for young children does everything they actually need. A lifetime trust earns its cost where there is a beneficiary who cannot manage assets, a real risk of incapacity, or a structure that has to keep operating without you.
A trust is not created by calling something a trust. It must be certain in three respects: the intention to create a trust, the property subject to it, and who the beneficiaries are. Get any of those wrong and the arrangement may fail, with the assets falling back into your estate.
Beyond the deed itself, the transfer has to actually happen. A trust deed listing a property that was never transferred into the trustee's name achieves very little. Land, shares and accounts each have their own transfer mechanics, and each has cost and tax consequences that should be worked out before you sign, not after.
Tell us what you are trying to achieve and roughly what you own. We will tell you whether a trust or a will is the right tool, and what each would cost.
Our lawyers work in English, Bahasa Malaysia, Mandarin and Cantonese. The first discussion and quotation are free.
Message us on WhatsAppWhoever is appointed, the trustee is subject to duties under Malaysian trustee legislation, which addresses matters including investment, the sale of trust property, insurance, delegation, and the maintenance of beneficiaries who are minors. Those duties apply on top of whatever the deed says. See appointment of executor and trustee.
Trusts are sold heavily in Malaysia and not everyone who needs a will needs a trust. Questions worth answering honestly first:
We will tell you plainly if a will is the better answer for your situation. Note also that trust legislation in Malaysia has been amended in recent years, so any advice you were given some time ago is worth revisiting.
The document creating a trust during the settlor's lifetime. It identifies the trustee, the beneficiaries, the assets placed into the trust and the terms on which the trustee holds and manages them.
Neither is better in the abstract. A will is simpler, cheaper and changeable during your lifetime, and for many families a will with a trust for young children does what is actually needed. A lifetime trust earns its cost where a beneficiary cannot manage assets, where incapacity is a real concern, or where a structure must keep operating without you.
Assets validly transferred into a lifetime trust are no longer owned by the settlor, so they do not form part of the estate on death and do not pass through the grant process. This only works for assets actually transferred in. Anything left in your own name still requires a grant.
Arrangements where the settlor keeps extensive control are common in marketing but raise real questions about whether the trust is effective. This is exactly the point on which to take advice on your specific structure rather than rely on a general answer.
It depends entirely on the terms of the deed. Some trusts are drafted to allow variation or revocation and some are not, and the choice has consequences. Decide this before signing, because it is difficult to fix afterwards.
Muslim estates are distributed under Faraid and fall within the jurisdiction of the Syariah Court, and instruments such as hibah and wasiat operate in that framework. That is a distinct area of practice and you should take advice from a practitioner in it.
We advise on whether a trust is right for you, draft the deed, and deal with transferring the assets into it properly.
Our lawyers work in English, Bahasa Malaysia, Mandarin and Cantonese. The first discussion and quotation are free.
Message us on WhatsAppAbout this page. General information about non-Muslim estate matters in Malaysia. Muslim estates are dealt with under Faraid and fall within the jurisdiction of the Syariah Court. Where an estate is distributed without a will, the fixed shares apply in Peninsular Malaysia and Sarawak; Sabah has its own intestacy law and the shares there differ. Court thresholds, duties and fees are set by legislation and change from time to time, so we confirm the current position for your matter rather than quoting figures here. Nothing on this page is advice on your own situation. Tam Yuen Hung & Co. is a Malaysian law firm regulated by the Malaysian Bar.