By Sharen Kaur
KUALA LUMPUR: Malaysians are estimated to hold RM135 billion in digital funds in local e-wallets, which could become the next wave of unclaimed assets without proper digital estate planning, said Sampul.co chief executive officer and co-founder Arham Merican.
He warned that without careful planning, these digital assets may be inaccessible to beneficiaries if the account holder passes away, highlighting the importance of incorporating digital asset management into traditional financial planning.
"Malaysia reportedly has RM13.3 billion in unclaimed funds and RM90 billion in frozen assets, showing how widespread this issue already is," he told Business Times.
An e-wallet, or digital wallet, is an online service that allows users to pay for goods and services electronically. Payments can be made online or at physical stores using smartphones, other mobile devices, or computers. Funds can be preloaded or linked directly to a bank account, and wallets can also securely store items such as driver's licenses, health cards, loyalty cards, and other IDs.
In Malaysia, e-wallets are increasingly popular as cashless payments gain traction. Leading platforms include Touch 'n Go eWallet, widely used for tolls, public transport, and retail purchases; Boost, offering bill payments, QR code payments, and loyalty rewards; and GrabPay, integrated into the Grab app for ride-hailing, food delivery, and retail transactions. Other widely used options such as ShopeePay, Maybank QRPay, and BigPay cater to both daily payments and online shopping.
Sunway University professor of economics Dr Yeah Kim Leng said that Malaysia's RM90 billion in frozen estate assets is a substantial sum, equivalent to nearly 5 per cent of the country's 2024 GDP, illustrating how much productive capital is effectively "locked away" at any given time.
He added that if these assets were fully invested or channelled into productive sectors, such as small businesses, infrastructure projects, or capital markets, they could contribute roughly 1.25 per cent to GDP growth, based on an incremental capital-output ratio of four, which is typical for developing economies.
"Unlocking these resources could not only stimulate broader economic activity but also generate employment, raise household incomes, and increase consumption, creating a multiplier effect that benefits both communities and the government through higher tax revenues," he told Business Times.
Dr Yeah said unresolved inheritance disputes effectively trap wealth in the system, leaving assets unutilised and preventing them from contributing to economic growth.
He explained that when assets, whether in cash, property, or digital holdings, remain idle due to legal or administrative delays, the circulation of capital slows.
"This reduction in liquidity weakens the money multiplier effect, the mechanism through which each ringgit in the financial system generates additional economic activity, and leads to subpar growth and diminished wealth creation for both families and the broader community.
"For instance, properties left in limbo or unclaimed bank balances cannot be reinvested, sold, or used to generate income, limiting their potential contribution to the economy," he said.
Dr Yeah further noted that beyond macroeconomic effects, the freezing of assets also has real-life consequences for families.
Without access to inherited wealth, households may struggle to meet educational, healthcare, or business financing needs, perpetuating financial stress and reducing opportunities for upward mobility.
"Inheritance is an essential intergenerational transfer that preserves family wealth and social mobility. When families cannot pass on assets, it risks widening inequality," Dr Yeah said.
Probate Delays Leave Families Cut Off from Funds
Arham said Malaysia's probate process remains largely manual and paper-based, often taking 12 to 24 months. Throughout this period, a deceased person's bank accounts and assets are frozen, cutting off families from essential funds.
Many Malaysians, he added, underestimate the administrative and legal hurdles involved, from securing death certificates to obtaining probate orders, until they experience a loss themselves. Missing nominations, incomplete wills, or the absence of Hibah structures can prolong financial hardship.
Arham emphasised that the system has not kept pace with Malaysia's fast-evolving digital banking ecosystem, creating a gap between how quickly money moves in life and how slowly it moves after death.
Analysts agree, saying Malaysia faces a "structural lag" in estate governance. While digital adoption has outpaced the region, estate administration processes remain fragmented across Amanah Raya, civil courts, and Syariah courts. Required documentation—including asset verification, debt settlement, Faraid calculations, and court certifications—creates multiple points of delay; even minor errors can add months.
Court backlogs, limited public awareness, and reliance on intermediaries such as lawyers and trustees further add time and cost, Arham told Business Times. Incomplete or outdated wills and missing information on digital assets, including e-wallets and crypto holdings, commonly stall proceedings.
"These layers of delay prevent families from resolving matters efficiently and add emotional strain during an already difficult period," he said.
Regarding frozen assets, Arham said that straightforward cases can take 6–12 months to settle, while more complex cases may remain frozen for two years or longer.
Arham explained that financial institutions are legally required to freeze accounts immediately once notified of the account holder's passing.
No withdrawals or transfers are allowed until the Grant of Probate (for those with wills) or Letter of Administration (for those without) is issued. Even joint accounts may face temporary freezes depending on bank policies, he said.
Arham said that this challenge is expanding into the digital realm.
"Assets held in digital banks, e-wallets, and crypto wallets risk remaining inaccessible or unclaimed if the owner's details are not properly recorded or linked to an estate plan."
He added that collaboration between financial planners, licensed trustees and technology platforms like Sampul.co, a cradle-backed startup, is essential to create a trusted and complete estate planning ecosystem.
Source: https://www.nst.com.my/business/corporate/2025/12/1327420/rm135bil-e-wallet-risk-going-unclaimed-bttv
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