Trusts and Divorce in Malaysia: Are Your Assets Really Protected?

Setting up a trust is often seen as a way to protect assets from potential claims, including those arising from divorce. But how effective is a trust under Malaysian law?

While Malaysian courts generally respect the structure of a trust, the intention behind setting it up is heavily scrutinised. If a trust is created with the purpose of avoiding matrimonial claims or to hide assets from a spouse, the court may set it aside.

For example, if a husband sets up a trust and transfers his property into it just before filing for divorce, the court may view it as an attempt to defeat the wife's claim to matrimonial assets.

To genuinely protect your assets, trusts should be set up early, with clear intentions and proper documentation. A lawyer can help you design a trust structure that complies with the law and withstands scrutiny in divorce proceedings.