Inheritance Law in Malaysia
Understanding Faraid and the Distribution Act for estate planning
Two Systems, One Goal
Malaysia operates a dual legal system for inheritance. Which law applies to your estate depends on your religion at the time of death.
Both systems aim to provide fairly for your family, but they work differently. Understanding which applies to you is the first step in effective estate planning.
For Muslims: Faraid
Islamic Inheritance Law (Faraid)
As a Muslim in Malaysia, your estate is distributed according to Faraid by default. This divine system ensures every rightful heir receives their prescribed share.
How Faraid Works
Step 1: Settle Obligations
Funeral expenses and debts are paid first from the estate.
Step 2: Execute Wasiat
Up to 1/3 of the remaining estate can go to non-heirs via Wasiat.
Step 3: Distribute by Faraid
The remainder is distributed according to Quranic shares.
Syariah Court Oversight
The Syariah Court issues the inheritance certificate (Sijil Faraid).
Typical Faraid Shares
Spouse
- Wife: 1/8 (with children) or 1/4 (no children)
- Husband: 1/4 (with children) or 1/2 (no children)
Children
- Sons receive double the share of daughters
- Daughters only: share 2/3 equally
Parents
- Father: 1/6 (with children) or residue
- Mother: 1/6 (with children) or 1/3 (no children)
Others
- Siblings may inherit if no children/parents
- Complex rules for extended family
Wasiat (Will)
Allocate up to 1/3 of your estate to non-heirs such as adopted children, charities, or friends.
- • Must not exceed 1/3
- • Cannot go to Faraid heirs
- • Requires witnesses
Hibah (Gift)
Transfer assets during your lifetime. Takes effect immediately and bypasses Faraid.
- • Effective immediately
- • Can go to anyone
- • Requires documentation
Takaful Nomination
Nominate beneficiaries for your Takaful policies. May bypass the estate.
- • Check policy terms
- • Conditional vs absolute
- • Update regularly
For Non-Muslims: Distribution Act 1958
Civil Intestate Succession
If you pass away without a valid Will, the Distribution Act 1958 determines how your estate is divided among your family members.
Distribution Act Shares
Why You Should Write a Will
Unlike Muslims, non-Muslims can freely distribute their entire estate via a Will. Without one, the Distribution Act may not reflect your wishes.
- • Provide for unmarried partners or stepchildren
- • Leave assets to charities or friends
- • Appoint guardians for minor children
- • Avoid family disputes
Key Considerations
Joint Ownership
Assets held in joint tenancy may pass automatically to the surviving owner, bypassing both Faraid and the Distribution Act.
EPF Nominations
Your EPF nomination determines who receives your retirement savings. For Muslims, nominees may hold it as trustees for Faraid distribution.
Insurance & Takaful
Nominated beneficiaries may receive insurance proceeds directly. Check your policy terms to understand whether proceeds enter your estate.
Foreign Assets
If you have assets in other countries, those assets may be subject to different inheritance laws. Consider a coordinated estate plan.