Letter of Wishes (Malaysia)

A Letter of Wishes in Malaysia states formally the matter at hand and what the writer asks the recipient to do.

A Letter of Wishes is most commonly used alongside a discretionary trust deed, a life insurance nomination under the Financial Services Act 2013 (FSA 2013), or a will that gives the trustee or executor wide discretionary powers over the distribution of assets. Where the trust deed or will does not specify how discretionary powers are to be exercised, the Letter of Wishes provides the human context — explaining family circumstances, the needs of individual beneficiaries, and the settlor's values and intentions — that guides the trustee in making decisions consistent with the settlor's actual purposes.

Amanah Raya Berhad (ARB), the government-owned trust corporation established under the Amanah Raya Berhad Act 1995 and licensed under the Public Trust Corporation Act 1995, regularly accepts Letters of Wishes from clients who appoint ARB as executor or trustee of their estate or trust fund. ARB's Will and Trust Division treats the Letter of Wishes as an important document in the administration process, and clients are encouraged to update the letter whenever family circumstances change.

A Letter of Wishes is also used by business owners in Malaysia who hold shares in private companies registered under the Companies Act 2016 with the Companies Commission of Malaysia (SSM), wishing to guide their executors on whether to sell the business, pass it to a specific family member, or continue operations under a nominated successor. The letter may also address sentimental personal property — jewellery, antiques, family heirlooms — that a testator wishes to see passed to specific individuals without formally amending the will.

The legal framework governing the Letter of Wishes (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Letter of Wishes (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Wills Act 1959 (Act 346) sets the foundational requirements.

A Letter of Wishes in Malaysia is needed whenever a testator or settlor wants to provide personal guidance to a trustee or executor beyond the strictly enforceable provisions of a will or trust deed.

A Letter of Wishes is needed when a testator appoints a professional executor — such as Amanah Raya Berhad under the Public Trust Corporation Act 1995 — and wants to explain the family's specific circumstances, the special needs of a dependent beneficiary, or the intended use of trust funds for education or healthcare without making these legally binding obligations.

A Letter of Wishes is required when a business owner has structured shares in a Sdn Bhd company (registered under the Companies Act 2016 with SSM) into a discretionary trust and wants the trustee to understand whether the business should be sold, retained, or restructured upon the owner's death or incapacity.

A Letter of Wishes is needed when a parent has established a life insurance trust or nominated beneficiaries under Section 166 of the Financial Services Act 2013, and wants the trustee to understand how the insurance proceeds should be applied — for example, that funds should be used for the children's university education before any other purpose.

A Letter of Wishes is useful when a testator holds property or assets in multiple jurisdictions — Malaysia, Singapore, and the United Kingdom, for example — and wishes to guide the executor on which assets to realise first, how to handle cross-border estate administration, and whether specific overseas assets should be transferred to specific beneficiaries.

A Letter of Wishes is needed when there are family members with special needs, disabilities, or substance dependency issues whom the testator wishes to protect through a discretionary trust arrangement, and the testator wants to explain to the trustee the exact nature of each beneficiary's circumstances and the appropriate level of financial support.

A well-drafted Letter of Wishes in Malaysia should contain the following key elements to be most useful to trustees and executors.

Addressees and Context: The letter must clearly state who it is addressed to — the named executor, the trustee company (such as Amanah Raya Berhad), or the trustees named in the trust deed — and must identify the will, trust deed, or insurance nomination to which it relates, including the date of that instrument.

Family Background and Circumstances: The letter should describe the family structure, the relationships between beneficiaries, any special needs or vulnerabilities, and any family dynamics relevant to the exercise of discretion. This context helps the trustee make decisions consistent with the settlor's intentions when circumstances arise that the formal documents do not address.

Beneficiary-Specific Guidance: For each discretionary beneficiary, the letter should set out the settlor's wishes regarding the size and timing of distributions, the purposes for which funds should be applied (education, healthcare, housing deposit), and any conditions or criteria the settlor would wish the trustee to consider before making a distribution.

Business Succession Instructions: Where the estate includes shares in a private company registered with SSM under the Companies Act 2016, the letter should address whether the business should be sold, retained, or transferred to a nominated family member or manager, and the settlor's views on the business's future.

Personal Property Memorandum: The letter may set out wishes for the distribution of sentimental items — jewellery, artwork, family heirlooms — that are not specifically dealt with in the will, providing the executor with clear guidance on the testator's intentions without requiring a formal will amendment.

Updating and Dating: Because a Letter of Wishes is non-binding and informal, it can be updated at any time without the formalities required for a will under Section 5 of the Wills Act 1959. Each version should be dated in DD/MM/YYYY format, signed by the settlor or testator, and the previous version should be destroyed or clearly superseded.

Confidentiality Note: The settlor may address whether the letter is intended to be shared with beneficiaries or kept confidential by the trustee. Malaysian trustees generally treat Letters of Wishes as confidential documents not automatically disclosed to beneficiaries, though the courts may order disclosure in contentious trust proceedings before the High Court of Malaya.

Additional compliance elements for a Letter of Wishes (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.