Can your foreign spouse finance your housing loan in the event of your death?

By Viktor Chong

Caring elderly

Death is assumed by many cultures as the end of all things, including one’s financial problems. However, it is also the beginning of your spouse or children’s legal issues. In our previous article, we’ve discussed the implications and steps that could be taken by the next of kin, if the deceased dies before paying off his or her housing loan.

The article can be revisited at: What happens to your housing loan when you die?

Now, the scenario involves a foreign spouse and children who are not Malaysian citizens. Messrs Eunice Tan & Partners founder Eunice Tan Mui Lee is here to answer all these sticky legal questions.

  1. If a will was not created by the deceased, is the spouse capable of financing the loan? Is there any additional red tape that he or she has to jump through to apply Grant of Letter of Administration in Court to protect and to administer the property?

On the assumption that the couple has registered their marriage in accordance to Law Reform (Marriage and Divorce) Act 1976, they are considered to be legally married under Malaysia law regardless of the nationality of the spouse.

If the deceased dies without making a will, the movable and immovable properties that he/she leaves behind will be distributed among his / her family members according to the Distribution Act 1958.

As long as you are a legally married couple under the Malaysia law, the governing law of the administration of the estate of the deceased will be bound by the Malaysia law as long as they live in the country.

  1. If the next of kin is composed of the deceased’s children and they are not Malaysian citizens, can they apply for an Originating Summons in court to appoint a person to become the administrator of the deceased estate? (On the assumption that no will was created)

To inherit the deceased’s estate, surviving family members have to agree to appoint one administrator or a trust company and obtain the Grant of Letter of Administrator from the court.

If the foreigner spouse is the administrator, he or she has to acquire the state authority approval to transfer the property into his/her name as the administrator.

With regards to the financing of a loan, it depends on whether the deceased has obtained any MRTA (Mortgage Reducing Term Assurance) or MLTA (Mortgage Level Term Assurance) which can fully pay off the loan of the property. If there is no purchase of MRTA or MLTA, the appointed administrator has to administer the estate according to the Probate and Administration Act 1959.

An administrator without the permission of the court is not allowed to sell, mortgage, charge or transfer by sale, gift, exchange of immovable property for the time being vested on him/her or lease any such property for a term more than five years.

If the next of kin which is composed of the deceased’s children who are not Malaysian citizens, the departed’s children would have to prove that there is a valid relationship between them.

If the deceased dies intestate, the children can obtain the grant of letter of administration from the High Court of Malaysia, PROVIDED THAT the subject matter, i.e. the assets of the deceased are within Malaysia AND it is within the jurisdiction of Malaysia.

The deceased’s children have to appoint an administrator, or a trust company vide the legal process in Malaysia as discussed previously. The duty of the administrator is the same as discussed earlier.

To Read More: Considering taking a home loan?

To Read More: Is it essential to pay attention to the lock-in period of home loans?

To Read More: How to speed up the loan process

To Read More: Understanding joint loans


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