Nominating Minors for EPF

Is this a good idea? 

This article is copied from LegalWillsMalaysia.com due to all info sent from them are so useful, I do not quote any single part. 

Many EPF contributors especially those with children, nominate their EPF money in this manner. They usually give a larger portion to the spouse (eg 60% to 80%), and the remainder goes to their children equally. This is not an issue if all your children are above the age of 18 years old.

On the other hand, if any your children is below the age of 18, then it can be an issue. For any child below the age of 18, they have to wait until they are 18 year old. Their share of the money will be held by the public trustee. 

If you have prepared well financially i.e. sufficient insurance money to cover house loans, car loans, living expenses etc, then the portion of money is usually not that crucial. The funds becomes quite crucial if your family is not that well off and your children need the money. Do not forget that when one person dies, a dual income family, becomes a single income family, and a single income family may be a no income family.

It becomes a big problem if you and your spouse dies together. Since both spouses nominated each other, a large portion of that money is stuck until your children either get  a Grant of Probate (if you have written a Will) or the Letter of Administration (if you did not write a Will). Your children will not be able to access that money you nominated your spouse to get for quite a while. Applying for a Grant of Probate can take anything from 6 to 9 months. Getting the Letter of Administration is even longer because the need for sureties and appointing a suitable administrator.

It is better not to include children below the age of 18 in your EPF nomination. You can name your children as back up beneficiary in your Will, in the event your spouse dies as the same time. That way, the executor and trustee of your Will, can access all the EPF funds once the Grant of Probate is out, and your children get to use the money.

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Source: LegalWillsMalaysia.com