A Living Trust in Malaysia or a Will? What a Trust Does and Does Not Do for Property
Ask about a living trust in Malaysia for your property and the question underneath is almost always “if I put the house in a trust, does that mean no tax and no paperwork for my family?” No. A living trust (inter vivos trust) genuinely keeps assets that were actually transferred into it out of probate, and it can handle incapacity and staged distribution in a way a will cannot. But moving a house from your name into a trustee’s name is a lifetime transfer of ownership, and on the published material, stamp duty and Real Property Gains Tax still apply. This page compares the two honestly, talks about money only with dated published fee schedules, and states plainly which questions I could not find an answer to. The last section is my own view, labelled as a view, not legal advice.
Short answer
A living trust in Malaysia keeps assets transferred into it out of probate and allows staged distribution; a will takes effect only on death. But moving a house into a trust is a lifetime transfer of ownership: LHDN’s no-gain-no-loss list covers devolution on death, and no stamp duty exemption for a trustee transfer was found — budget ad valorem duty of 1%/2%/3%/4%, or a flat 8% for a non-citizen.
Key numbers at a glance
| Governing law | Trustee Act 1949, Trust Companies Act 1949, Public Trust Corporation Act 1995 |
|---|---|
| Maximum trustees | Four for a settlement of property (Trustee Act 1949 s.39) |
| What a trust really does | No probate for funded assets, continuity on incapacity, staged distribution, privacy |
| Stamp duty on transfer in | No exemption found; assume ad valorem 1%/2%/3%/4%, or 8% for a non-citizen |
| RPGT | A lifetime settlement is not on LHDN's no-gain-no-loss list — get a tax opinion |
| Annual fee (published, from 1 Apr 2021) | RM2,000 per title for non-income-bearing property; 1% or RM6,000 if income-bearing |
| Mortgaged property | A charge means the bank must be involved; no published source on bank consent |
| Muslim estates | A trust does not displace faraid; hibah and wasiat (max 1/3, not to a waris) apply |
Key points in 30 seconds
- A living trust is a lifetime arrangement where the settlor transfers ownership of assets to a trustee, who holds them under a written trust deed for named beneficiaries. The governing law is the Trustee Act 1949 (Act 208), the Trust Companies Act 1949 and, for Amanah Raya, the Public Trust Corporation Act 1995.
- What a trust genuinely does: no probate for assets transferred in, continuity if the settlor becomes incapacitated, staged or conditional distribution, and privacy — a trust deed is not the public record a proved will becomes.
- Assets left outside the trust still go through the estate process. A trust that is set up but never funded avoids nothing.
- The part marketing leaves out: LHDN’s no-gain-no-loss list covers the devolution of a deceased person’s assets, not a lifetime settlement, and no stamp duty exemption for a transfer to the trustee of a living trust could be found. Budget for ad valorem MOT duty (1%/2%/3%/4%, or a flat 8% for a non-citizen settlor) and get a written tax opinion first.
- The only fee schedule I could verify on a licensed trust company’s own site — Rockwills Trustee Berhad, effective 1 April 2021 — charges RM2,000 per title per year for a non-income-bearing property, or 1% / RM6,000 per title (whichever is lower) where it produces income. Private trust set-up starts at RM1,500. Amanah Raya publishes no fee schedule.
- Where a charge sits on the title, nothing moves without the bank. No Malaysian source states whether banks consent to a charged property being transferred to a trustee — ask the bank before you sign a deed.
- A Muslim estate follows faraid, and a trust by itself does not displace it. The instruments that apply are hibah (a lifetime gift) and wasiat (up to one third, and not to a legal heir), with the detail varying by state.
What is a living trust in Malaysia, and what law governs it?
A living trust (inter vivos trust) is an arrangement made during the settlor’s lifetime, under which the settlor transfers ownership of assets to a trustee who holds and manages them under a trust deed for named beneficiaries. Three roles, all necessary: settlor, trustee, beneficiary.
- Governing law: the Trustee Act 1949 (Act 208), the Trust Companies Act 1949, the Public Trust Corporation Act 1995 (Act 532) for Amanah Raya, and English equity and common-law principles.
- Form: the trust deed must be in writing, stamped, and signed by the settlor and the trustee(s).
- For real property: the transfer into the trust must comply with the National Land Code and be registered at the land office; the deed itself should be lodged with the related registry.
- Territorial application: the Trustee Act 1949 has applied in Peninsular Malaysia since 31 December 1949 and in Sabah and Sarawak since 30 June 1965, covering trusts, executorships and administratorships created before or after commencement.
The terms used here (settlor, trustee, beneficiary, hibah, wasiat, MOT) are defined in the glossary.
Who can be a trustee? Trust companies, Amanah Raya and private trustees
The three kinds of trustee
- An individual — a family member or a trusted friend. Unless the deed provides otherwise, or the court allows remuneration under s.46 of the Trustee Act 1949, an individual trustee has no automatic right to charge.
- A licensed trust company registered under the Trust Companies Act 1949. Section 3 sets the registration requirements: authorised capital of at least RM500,000, paid-up capital of at least RM150,000, a RM100,000 security deposit with the Accountant General, and half the issued shares to remain unpaid. Section 8(1) lets it act as executor, administrator, trustee, receiver, assignee or liquidator, and ss.9–10 let it apply for probate and letters of administration. Bank-linked names in the market include Maybank Trustees, CIMB Trustee, RHB Trustees, AmTrustee, Hong Leong Trustee and Alliance Trustee, alongside independent licensed trust companies.
- Amanah Raya Berhad, under the Public Trust Corporation Act 1995 (Act 532), which replaced the old Public Trustee and Official Administrator. It may act as executor, administrator, trustee, guardian and receiver (ss.11 and 13). The Act’s own thresholds include summary administration of movable property up to RM600,000 (s.17), small estates not exceeding RM5,000 where the beneficiaries are of modest means (s.18), capital distributions up to RM20,000 for a minor’s maintenance from estates under RM40,000 (s.19), a Common Fund (s.25) and fees (s.33).
Trustee Act 1949: the parts a property owner should know
| Point | Section |
|---|---|
| Authorised investments: government and guaranteed securities, immovable property, fixed-interest securities, loans to approved companies | s.4 |
| Investment in securities quoted on the stock exchange, subject to conditions | s.5 |
| Duty to consider diversification and suitability | s.6 |
| Protection where a loan is made on a qualified surveyor’s valuation | s.12 |
| Power of sale — the trustee “may sell or concur with any other person in selling all or any part of the property … by public auction or by private contract” | s.16 |
| Reimbursement of expenses out of the trust property | s.35(2) |
| Maximum four trustees for a settlement or disposition of property (charitable, religious or public purposes excepted) | s.39 |
| Appointment of replacement trustees (death, abroad over 12 months, desiring discharge, refusal, unfitness, incapacity, minority) | s.40 |
| Court’s power to appoint a new trustee, including where a trustee is imprisoned, mentally disordered, bankrupt or a dissolved corporation | s.45 |
| Court may allow “such remuneration for his services as trustee as the Court may think fit” | s.46 |
How to read that table in practice: the Act gives a trustee clear power to hold and sell immovable property, caps trustees at four, and does not hand a lay trustee an automatic right to be paid. That is a real argument for a professional trustee where a house is involved — not because relatives are unreliable, but because managing a property (rent, tax, repairs, an eventual sale) is ongoing work, and a trustee whose deed is silent on remuneration has to go to court for it.
The usual mistake is comparing set-up fee against legal fee and forgetting the tax on the transfer itself. On the published material, an RM800,000 house moved into a trust budgets at RM18,000 of ad valorem stamp duty (RM64,000 at the non-citizen 8%), plus RM2,000 per title every year. Against that, a small estate under RM5 million with no will has a published four-month target and a RM10 transfer. Put both on one page first.
Ask Louis directly
Send me the trust proposal or quotation you have been given and I will hold it against the dated published schedule in this article so you can see where the numbers sit.
Tell me the property's value and how many titles it has, and I will work out the ad valorem stamp duty on a transfer for free, plus a list of the exact questions to put to your lawyer and tax adviser.
Trust vs will: the comparison that matters
| Will | Living trust | |
|---|---|---|
| Takes effect | On death only | During the settlor’s lifetime |
| Estate process | Probate required | Assets vested in the trustee are administered under the deed, without probate |
| Control during lifetime | Full — the testator keeps ownership | Transferred to the trustee; the settlor keeps only what the deed reserves |
| Privacy | Becomes a public record once proved | The deed stays private |
| Cost (ranges quoted in the sources) | RM350–RM1,000 basic to lawyer-prepared | RM5,000–RM20,000 depending on complexity |
| Stamp duty on the property transfer | RM10 nominal on a transfer under the will | Ad valorem MOT duty — see the next section |
| RPGT | None on death | Not on LHDN’s no-gain-no-loss list — see the next section |
On "faster", let me be more precise
A trust is faster because there is no grant to apply for. But I could find no published Malaysian figure for how long a trustee actually takes to deal with a house, so I will not write “a trust distributes in days”. What is published is on the other side of the comparison: small estate distribution (no will, under RM5 million) has a stated four months from the date of application, against 46,707 cases still outstanding at the end of 2025 — see small estate distribution. The probate route where there is a will is in wills and property inheritance.
What does a trust cost to set up and run in Malaysia?
For this section I use only fee schedules a trust company publishes on its own site, with the date shown. The one I could verify to that standard is Rockwills Trustee Berhad’s schedule, effective 1 April 2021 — five and a half years old today, so treat it as an order of magnitude and ask the company for a current quotation.
| Item | Fee |
|---|---|
| Executor / administrator appointment (first) | RM120 |
| Estate administration (executorship), annual, on gross estate value | 1.5% on the first RM1m, minimum RM5,000; 0.90% on the next RM9m; 0.50% on the next RM20m; 0.25% above RM30m |
| Private trust set-up | RM1,500 (20 clauses or fewer) up to RM3,500–RM25,000 (above 34 clauses) |
| Annual trustee fee — non-income-bearing immovable property | RM2,000 per title / lot |
| Annual trustee fee — income-bearing immovable property | 1% or RM6,000 per title / lot, whichever is lower |
| Annual trustee fee — movable assets | 0.75%, minimum RM2,000, with tiered reductions |
| Annual trustee fee — holding company shares | RM8,000 for the first three; RM2,500 each additional |
| Prepaid packages | Gold RM2,000; Silver RM1,200 |
The line that matters most to a property owner is the RM2,000. A home you live in, producing no rent, costs RM2,000 per title per year on that published schedule — RM20,000 over ten years, before set-up fees, legal fees and the tax on the transfer itself. That is the concrete version of “a trust costs money every year”, and it is the number people miss when they compare set-up fees alone. Add 8% SST on professional fees where the firm is SST-registered.
The part marketing leaves out: a trust does not avoid stamp duty or RPGT
This is the most important section on the page and the one I see misunderstood most often. Transferring property into a living trust is not a stamp duty exemption and not an RPGT exemption. A licensed trust company says so on its own site: setting up a living trust “does not automatically eliminate income tax, stamp duty, RPGT or other costs”, and it lists “registration, financing restrictions, stamp duty, legal fees and Real Property Gains Tax considerations” as part of moving real property into a trust.
Stamp duty: no exemption found, so budget the ad valorem rate
- Ad valorem duty on a memorandum of transfer runs at 1% on the first RM100,000, 2% on RM100,001–500,000, 3% on RM500,001–1,000,000 and 4% above RM1,000,000, on the higher of consideration or market value. A non-citizen who is not a PR pays a flat 8% on residential property from 1 January 2026. See stamp duty and legal fees.
- On hasil.gov.my, in the Stamp Act material I could reach, and in the law firm publications I checked, no exemption or remission for a transfer to the trustee of a living trust was found. KPMG’s May 2025 stamp duty and RPGT brochure does not address trusts, trustees or transfers without consideration at all.
- So the position on this page is: assume ad valorem duty on market value until a conveyancer identifies a specific exemption. “It only costs RM10 to put a house in a trust” is wrong — RM10 is the nominal duty on a transfer to a beneficiary under a will.
- Also note: from 2027, transfers of property ownership move to self-assessment through e-Duti Setem.
Worked through (this is the default budget, not a statement that a trust must pay it): a house worth RM800,000 transferred to a trustee gives 1% × RM100,000 + 2% × RM400,000 + 3% × RM300,000 = RM18,000. The same house with a non-citizen settlor, at the flat 8%, is RM64,000. Put that cash on the same page as whatever estate-process cost the trust is meant to save.
RPGT: a lifetime settlement is not on LHDN's exemption list
LHDN publishes the situations where the disposal price is deemed equal to the acquisition price (no chargeable gain, no allowable loss) under Schedule 2 of the RPGT Act 1976. There are six: (1) devolution of a deceased person’s assets on an executor, legatee or the trustees of a trust — subparagraph 3(1)(a); (2) transfer between spouses — 3(1)(b)(i), restricted to Malaysian citizen residents from 1.1.2018; (3) transfer to a controlled company for shares, or shares plus not more than 25% cash — 3(1)(b)(ii); (4) gift to the Federal or State Government, a local authority or an exempted charitable body — 3(1)(e); (5) compulsory acquisition under any law — 3(1)(f); (6) gifts between spouses, parent and child, or grandparent and grandchild — paragraph 12, with the donor required to be a Malaysian citizen from 1.1.2017.
And here is the other half, stated as honestly: I found no LHDN public ruling, guideline or reported decision dealing specifically with a transfer to the trustee of an inter vivos trust. Where the settlor and the beneficiary happen to be parent and child, whether paragraph 12 has any role is a question for a tax adviser; where the trustee is a bare nominee, the analysis may differ again. So this page will not tell you a trust is RPGT-free, and will not tell you it is definitely taxable. Get a written tax opinion before you transfer anything.
If RPGT does arise, the whole machinery comes with it: the rate table, the buyer’s retention of 3% (or 7% where the seller is not a citizen or PR), and CKHT filing within 60 days — see selling property and RPGT. If what you actually want is a transfer between family members rather than a trust, transferring property to family covers the routes that do have published relief.
Want to see what you can actually buy?
The rules are above; these are the actual homes. Each page lists the projects I am tracking, with published price ranges and the date each figure was checked. Tell me the area on WhatsApp and I will send the current list.
Can you put a mortgaged property into a trust?
What is verified
- A title carrying a charge cannot be transferred without the chargee bank’s involvement. The charge is a registered interest on the title.
- A licensed trust company lists “financing restrictions” on its own site among the consequences of transferring real property into a trust.
What is not verified
No Malaysian source I could reach states how banks treat a proposed transfer of a charged property to a trustee: whether the charge can be novated to the trustee, whether the loan must be redeemed first, or whether any lender offers a trust-friendly arrangement. Two estate-planning firms’ step-by-step guides to transferring property into a trust omit the mortgage entirely.
Note that this is a different question from what happens to a charged property after the owner dies, inside an estate distribution. That one is equally unsourced, and I say so in small estate distribution.
Muslim estates: a trust does not by itself displace faraid
A Muslim’s estate is distributed under faraid, with the Syariah Court determining the heirs and their shares and issuing the sijil faraid. Creating a trust does not, by itself, take an estate out of faraid. The instruments that do apply are these two:
- Wasiat (an Islamic will) may dispose of up to one third of the estate; the remaining two thirds follows faraid. A wasiat cannot benefit a faraid heir (waris) — it can go to non-heirs, such as a charity or a non-Muslim spouse. Exceeding one third, or benefiting a waris, requires the unanimous consent of all the heirs after death.
- Hibah, a lifetime gift, moves an asset out of the estate entirely and out of the faraid calculation — but only where the donor genuinely relinquishes control. A poorly structured hibah can be challenged by other heirs. Hibah amanah, a gift held on trust, is the commonly marketed combination: Amanah Raya or a licensed trustee holds the asset, which then distributes outside faraid.
How a Muslim estate runs through the small estate process — the Syariah court issues the sijil faraid and JKPTG issues the distribution order on that basis — is in small estate distribution.
When a trust is worth it and when a will is enough (Louis's view)
When I think a trust is worth looking at seriously
- Minor children, or a dependant who needs long-term care. A will distributes once; a trust can distribute in stages or on conditions, which a will cannot do.
- You are worried about incapacity. A will does nothing until you die; a trust can name a successor trustee to take over if you cannot manage your affairs.
- Several properties across states or countries, or a genuinely complex structure (company shares, business assets).
- Privacy matters to you — you would rather the distribution not become a public record once a will is proved.
- A Muslim settlor who wants an asset outside the faraid pool — but the instrument is a properly constituted hibah or hibah amanah, taken through a Shariah-qualified adviser, not simply “a trust”.
When I think a will is enough
- One or two properties, clear heirs, no family dispute. That describes most people.
- The cash arithmetic gives most people pause: putting an RM800,000 house into a trust budgets at RM18,000 of ad valorem duty (RM64,000 at the non-citizen flat 8%), plus set-up fees, plus RM2,000 per title per year on the 2021 published schedule — RM20,000 over ten years. On the other side, a small estate under RM5 million with no will has a published four-month target, and the transfer to beneficiaries generally carries RM10 stamp duty.
- The annual fee recurs. Set-up is once; the trustee fee is every year, whether or not anything happens.
- You are not actually going to transfer the house in. Then do not set one up — an unfunded trust saves nobody anything.
Whichever you choose, do these three things
- Put the title, the SPA, the loan account, any MRTA/MLTA policy, and the assessment and quit rent receipts on one list, and tell your family where it is. It costs nothing and it is the step people skip.
- If the property is charged, write to the bank first and ask whether a charged property can be transferred to a trustee and whether redemption is required. That answer can change the whole plan.
- Get advice in writing: a licensed trust company or a lawyer on structure and fees, a tax adviser on stamp duty and RPGT. If someone tells you verbally that there is no tax, ask them to put it in writing.
Related questions
Can you have both a trust and a will?
Yes, and in practice most people should. A trust only deals with the assets transferred into it, so anything left outside — a property bought later, bank accounts, a car — still needs the estate process, which is why a residuary will usually sits alongside the trust. The common failure is not choosing the wrong instrument but never funding the trust: a licensed trust company says plainly that probate avoidance applies only to assets properly transferred in.
Once the house is in a trust, can I still sell it or collect the rent?
Ownership sits with the trustee, so a sale or a letting is executed by the trustee under the deed. Section 16 of the Trustee Act 1949 expressly gives a trustee power to sell by public auction or private contract. How much say you keep depends entirely on how the deed is drafted, which is why the deed is read clause by clause before signing and why a template off the internet is a bad idea.
Does a trust protect a Malaysian property from creditors?
I will not claim that. One firm notes that a revocable trust gives only limited creditor protection, and the area brings in claw-back and sham-trust doctrines that I have not researched, so this page draws no conclusion either way. If you have genuine creditor exposure, take it to a lawyer who specialises in asset protection and get the advice in writing rather than relying on marketing material.
Can a foreigner set up a Malaysian trust to hold property?
What this page can confirm is the tax side: a non-citizen who is not a PR pays a flat 8% stamp duty on a residential transfer from 1 January 2026, so an RM800,000 house costs RM64,000 in duty against RM18,000 for a citizen. For foreign ownership and the state consent layer, see when a foreign owner dies, and take written legal advice before structuring anything.
Frequently asked questions
What is the difference between a trust and a will in Malaysia?
A will takes effect only on death, needs probate, and becomes a public record once proved. A living trust takes effect during your lifetime, and assets transferred into it are administered under the trust deed without probate, with the deed staying private. The trade-off is that ownership passes to the trustee while you are alive, there are set-up and annual fees, and moving a house in is a lifetime transfer that carries stamp duty and RPGT considerations.
Does putting property in a trust avoid stamp duty and RPGT in Malaysia?
Do not assume it does. The item on LHDN’s no-gain-no-loss list that mentions trustees covers the devolution of a deceased person’s assets, which happens on death, not a lifetime settlement. I also found no stamp duty exemption for a transfer to the trustee of a living trust. Budget ad valorem MOT duty (1%/2%/3%/4%, or a flat 8% for a non-citizen). Equally, I will not say it is certainly taxable — get a written tax opinion.
How much does it cost to set up a trust in Malaysia?
Using a published, dated schedule: Rockwills Trustee Berhad (effective 1 April 2021) charges RM1,500 for a private trust of 20 clauses or fewer, rising to RM3,500–RM25,000 above 34 clauses, and an annual trustee fee of RM2,000 per title for a non-income-bearing property, or 1% / RM6,000 per title (whichever is lower) where it produces income. Add 8% SST on professional fees. Amanah Raya publishes no fee schedule; you have to call.
Can I transfer a mortgaged house into a trust?
Ask the bank first. A charge is registered on the title, so nothing transfers without the chargee’s involvement. No Malaysian source I could reach states whether a bank will consent to a charged property being transferred to a trustee, or whether redemption is required first, so I will not guess. The two possible outcomes are redeeming the loan and transferring unencumbered, or the bank agreeing to another arrangement.
Who can be a trustee in Malaysia, and is Amanah Raya better than a trust company?
An individual, a trust company registered under the Trust Companies Act 1949, or Amanah Raya Berhad under the Public Trust Corporation Act 1995. A settlement of property may have no more than four trustees (Trustee Act 1949 s.39). I do not recommend a particular company. Compare whether they publish a fee schedule at all, their track record, whether they are bank-linked, and how clearly the deed sets remuneration — an individual trustee has no automatic right to charge.
Can a Muslim use a trust to bypass faraid?
Not by creating a trust alone. A Muslim estate is distributed under faraid, with the Syariah court determining heirs and shares. The instruments that apply are hibah, a lifetime gift that removes the asset from the estate provided the donor genuinely gives up control, and wasiat, limited to one third and not to a legal heir. Islamic personal law is a state matter, so take this to your state religious authority and a Shariah-qualified planner.
If I have a trust, do I still need a will?
Usually yes. A trust only deals with the assets actually transferred into it. Anything left outside it — a property bought later, bank accounts, a car — still goes through the estate process. The common arrangement is a trust plus a will that catches the residue. The two mistakes to avoid are setting up a trust and never funding it, and assuming a trust removes the need to plan for everything else.
Sources & verification
- Trustee Act 1949 (Act 208) — reprint (PDF)
- Trustee Act 1949 — CommonLII
- Trust Companies Act 1949 — CommonLII
- Low & Partners — Trust Companies Act 1949 (registration and powers)
- Public Trust Corporation Act 1995 (Act 532) — CommonLII
- Low & Partners — Public Trust Corporation Act 1995 (Amanah Raya)
- Amanah Raya Berhad — about (no fee schedule published, checked 29 Sep 2026)
- Kevin Wu & Associates — The Practical Application of a Living Trust in Malaysia (25 Nov 2025)
- Wen Jie & Co — Trust Deed in Malaysia (24 Oct 2024)
- HWG Asia — The Difference Between a Will and a Trust in Malaysia (9 Dec 2025)
- Rockwills — What Is a Living Trust? (22 Jul 2026)
- Rockwills Trustee Berhad — published fee schedule, effective 1 April 2021 (PDF)
- LHDN — Disposal price deemed to be equal to acquisition price (RPGT Schedule 2)
- LHDN — Transfer of asset inherited from deceased estate
- KPMG Malaysia — Stamp duty and Real Property Gains Tax brochure (5 May 2025)
- Stamp Act 1949 — CommonLII
- RDS Law Partners — Key stamp duty changes from 1 January 2026
- Sim & Rahman — The process of transferring property into a trust in Malaysia (1 Jul 2024)
- ClickBina — Property inheritance and faraid in Malaysia (updated 24 May 2026)
- Maher Saham — Hibah and faraid: Islamic inheritance guide Malaysia
- Rockwills — Islamic estate planning in Malaysia
- Thomas Philip — Protection of assets as a high-risk individual
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
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Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
Tell me the property's value and how many titles it has, and I will work out the ad valorem stamp duty on a transfer for free, plus a list of the exact questions to put to your lawyer and tax adviser.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT