Two Minutes to understand Estate Administration in Malaysia

Two Minutes to understand Estate Administration in Malaysia

There are myths about estate administration which persist. Most of the people are having misconception that upon demised of a person, his/her family members could automatically inherit the estate of the deceased. The reality is, when a person passes away, his/her estate would be frozen.

To start with the process of “unfreezing” the deceased’s estate, we need to conduct facts finding exercise and to ascertain whether the deceased made a will during his lifetime. 

What makes a will valid then? In Malaysia, we have a specific act i.e., Wills Act 1959, which provides legal requirements of a valid will. [This topic shall be discussed further in next article]

This article will discuss the process of “unfreezing” the deceased’s estate for testacy (where the deceased person dies leaving a valid and enforceable will) or intestacy (where the deceased person dies without leaving a valid and enforceable will).

Grant of Probate for Estate Administration

If the deceased person dies leaving a valid and enforceable will, the executor(s) appointed by the deceased through his/her will shall apply to the court for a grant of probate. A grant of probate is a grant of permission issued by the High Court authorizing the appointed executor(s) to administer the deceased’s estate. Meaning to say, with the grant of probate, the appointed executors(s) could manage and/or distribute the deceased’s estate according to the terms of the will.

Generally, the process of application for grant of probate could take around 3 to 6 months. There will be a list of cause papers to be filed in Court. The attesting witnesses to the will are also required to testify that the deceased is of sound mind at the time the Will is made. Under normal circumstances, the attesting witnesses only require to testify by way of affidavit. Should there be any incident of challenging a will by any “interested persons”, the two witnesses are likely to be called to testify in Court.

During the hearing of the application, the original death certificate and original will are to be handed over to the Court for safe-keeping. This is to avoid any issue of fraud or forgery in the future.

People sometimes get confused between executor and beneficiary. As far as a will is concerned, executor(s) are the people who manage and distribute the deceased’s estate. In layman’s terms, people who organise your affairs after your death. Whereas, beneficiaries are people you named in your will who would ultimately benefit from your estate. An executor is not equivalent to beneficiary BUT an executor and beneficiary can be the same person.

Letter of Administration for Estate Administration

On the other hand, if the deceased did not make a will during his lifetime, then the persons interested in the estate of the deceased can apply to the court for a Grant of Letter of Administration to manage and distribute the deceased’s estate pursuant to Section 30 of Probate and Administration Act 1959.

As the deceased did not specify who would become the administrator of his estate through the will, the court will require the persons interested in the estate to agree on the “candidate” of the administrator. Generally, if all the persons interested in the deceased’s estate agree to one of them (or up to four) as the administrator, then the court will allow the estate to be administered by the agreed person(s) after verifying the affidavits of all the persons interested and the original death certificate of the deceased. For scenario where there is a beneficiary who is an infant, the court shall grant the administration to a trust corporation or not less than 2 individuals as administrators. This is in accordance with Section 4(2) of the Probate and Administration Act 1959.

In certain scenario, the persons interested in the deceased’s estate may have a heated disagreement on who to be the administrator. This will lead to the circumstance that the estate of the deceased “can be seen but untouchable”. [This would be another topic which shall be discussed further in next article]

Back to the process of “unfreezing” the deceased’s estate, according to Section 35 of the Probate and Administration Act 1959, the administrator must provide two sureties to guarantee the amount of money of the estate to the court before the court allows the administrator to obtain the Grant of Letter of Administration; unless exempted by the court (generally this exemption is allowed by court upon applying).

Regarding how the deceased’s estate should be distributed in cases of without a Will, Malaysia has a Distribution Act 1958 in this regard. According to the law, the inheritance will be allocated to spouse, parents and children (the allocated share varies in different situations, please refer to section 6 of the Distribution Act 1958 for details). If the spouse, parents and children do not survive the deceased, other relatives may get the distribution of the estate. This is just a distribution guide for the persons interested in estate of the deceased. If all of the beneficiaries agree to other distribution methods, the administrator can distribute the deceased’s estate according to everyone’s wishes. Nevertheless, if there is any real property, the estate administrator must apply to the court for a distribution order to specify how the real property should be distributed.

Duty of the Executor or Administrator

Afterall, the prior duties of the executor or administrator is to pay off the debts owed by the deceased during his lifetime before distributing the deceased’s estate. Otherwise, the creditor can sue the executor or administrator. Of course, the executor or the administrator only responds to any claims by the creditor of the deceased in the capacity of representative of the deceased.

BY WINSON TAN

Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.

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