How to Avoid Frozen Assets: 5 Simple Steps for Your Heirs

Many families in Malaysia face financial hardship when a loved one passes away—not because there isn’t enough wealth, but because the assets are frozen due to legal complications. When assets are frozen, heirs cannot access bank accounts, property, or investments until the legal process is completed, which can take months or even years.

To prevent this from happening, here are five effective steps to ensure your wealth is smoothly transferred to your heirs without unnecessary delays.

Why Do Assets Get Frozen?

When a person passes away, their assets—such as bank accounts, property, vehicles, and investments—are legally frozen until proper estate distribution is determined. This happens because:

• No wasiat (Islamic will) or legal document is in place
• Disputes arise among heirs over asset distribution
• A lengthy court process is required to confirm rightful beneficiaries
• Unpaid debts or taxes delay asset release

Without proper planning, your family may struggle financially while waiting for the estate to be settled. Fortunately, you can take steps to prevent this.

Step 1: Write a Wasiat (Islamic Will)

A wasiat is a legally recognized will that specifies how you want your assets to be distributed. It allows you to:

✅ Appoint an executor to manage your estate
✅ Distribute up to one-third of your wealth to non-faraid beneficiaries (e.g., adopted children, charities)
✅ Ensure a smooth legal process for your heirs

If no wasiat is written, all assets must go through the Malaysian Syariah Court and faraid laws, which can delay asset distribution for months or even years.

📌 What You Can Do:

• Prepare a wasiat with a professional estate planner
• Specify how your assets should be distributed
• Appoint a trusted executor to handle your estate

Step 2: Use Hibah (Lifetime Gifting)

Hibah is an Islamic gifting mechanism that allows you to transfer ownership of assets while you are still alive. Since hibah is not subject to faraid, it ensures that assets do not get frozen upon your passing.

Benefits of Hibah:

✅ Assets immediately belong to the recipient
✅ Not affected by faraid laws or legal disputes
✅ Can be given to anyone, including stepchildren and adopted children

📌 What You Can Do:

• Consider hibah for important assets like property, business shares, or savings
• Use proper legal documentation to avoid disputes
• Consult an Islamic estate planning expert to set up a hibah agreement

Step 3: Set Up a Trust (Amanah)

A trust (amanah) allows you to appoint a trustee to manage and distribute your assets according to your wishes. This is particularly useful if you want to:

✅ Ensure your children or dependents receive assets in stages
✅ Protect wealth from misuse or disputes
✅ Ensure business continuity by appointing a successor

A trust is especially helpful for minor children or families with complex inheritance situations.

📌 What You Can Do:

• Work with an Islamic trust company to create an amanah
• Clearly outline who should receive what assets and when
• Appoint a trustee to manage your wealth after your passing

Step 4: Nominate Beneficiaries for EPF, Takaful & Bank Accounts

Some assets, such as Employees Provident Fund (EPF), Takaful insurance, and bank accounts, allow you to nominate beneficiaries. This ensures that these funds go directly to your heirs without going through the estate administration process.

Key Assets You Can Nominate Beneficiaries For:

✅ EPF (KWSP) savings – Can be transferred immediately to your nominated heir
✅ Takaful insurance payouts – Ensures financial protection for your family
✅ Bank accounts – Some banks allow nominees to access funds

📌 What You Can Do:

• Check and update your nomination details regularly
• Ensure your nominee understands how to claim the assets
• Inform your family about the nomination process

Step 5: Settle Debts & Zakat Obligations Early

Islamic law emphasizes that debts must be settled before inheritance distribution. If a deceased person has outstanding debts, their assets cannot be distributed until the debts are cleared. This can cause delays and financial stress for heirs.

📌 What You Can Do:

• Pay off existing debts while you are still alive
• Keep clear records of your debts for your heirs
• If necessary, set up a Takaful plan to cover outstanding loans

Conclusion: Secure Your Family’s Future Today

By taking these 5 simple steps, you can prevent your assets from being frozen and ensure your family receives their rightful inheritance without unnecessary delays.

🔹 Quick Recap:

✅ Write a Wasiat – Ensure legal clarity for asset distribution
✅ Use Hibah – Transfer ownership while alive to avoid disputes
✅ Set Up a Trust – Manage and protect assets for future generations
✅ Nominate Beneficiaries – For EPF, Takaful, and bank accounts
✅ Settle Debts Early – Avoid delays in estate distribution

Proper estate planning is not just for the wealthy—it’s for anyone who wants to protect their loved ones from financial and legal difficulties.

🔹 Need professional help? Visit Pewarisan.my for expert guidance and digital solutions for Islamic estate planning.