Administration of estate in Malaysia (Letter of Administration and Grant of Probate)
Upon the death of a person (“the Deceased”), the next of kin other than having to deal with the lost of the love one will also have to deal with the assets and liabilities of the Deceased.
It is common ground that upon the passing of the Deceased the next of kin or even the beneficiaries will not be able to deal with the assets and liabilities of the Deceased because the authorities, the banks or third party usually will requires the person claiming to represents the estate of the Deceased to provide some proof that he or she is so authorized by law to deal with the assets of the Deceased.
Now the next question is how to get the next of kin or the beneficiaries of the Deceased to be authorized? The answer is that the next of kin or the beneficiaries will have to apply for the relevant grant of representation.
A grant of representation to put it simply means it will formally or officially vest the person or persons being granted with the relevant grant of representation with the authorities to deal with the assets and liabilities of the Deceased.
Depending on the type of the grant of representation, the person granted with the representation can be known as an “Administrator” in the case of a grant of Letter of Administration or an “Executor” in the case of a grant of Probate.
There are various types of grant of representation in Malaysia and we will be only dealing with the most common type of grant here which is the grant of Letter of Administration and the Grant of Probate.
The grant of Letter of Administration
A grant of Letter of Administration is a grant issued by the High Court of Malaya allowing the person granted with the Letter of Administration to administer the estate or assets of the Deceased in situation where the Deceased have died without leaving a valid will.
The application for the grant of Letter of Administration will have to be made to the High Court.
The followings are the procedure for applying for the grant of Letter of Administration:
Step 1 filing of the cause papers
the appointed lawyer will prepare the followings documents to be filed in the High Court:Ex Parte Originating Summons praying for the person named therein to be granted with the Letter of Administration;Affidavit In Support of the Ex Parte Originating Summons;Notice of Appointment of Solicitors;List of assets of the Deceased;List of liabilities of the Deceased;Renounciation; andAdministration Oath.
Step 2 hearing of the Ex Parte Originating Summons
Once the above is filed the High Court will processed the documents and will seal the Ex Parte Originating Summons with the seal of the High Court. The High Court at the same time will fix a hearing date for the Ex Parte Originating Summons.The Ex Parte Originating summons will then be heard in the High Court before a Registrar and the intended administrator or administrators will have to be present in Court for the hearing. The Registrar upon being satisfied that the papers filed are in order will grant order in terms as per the Ex Parte Originating Summons i.e. will grant the Letter of Administration to the person or persons named.
Step 3 dispensation of sureties
Section 35(1) Probate and Administration Act 1959 requires the applicant for the letters of administration to provide two sureties who have assets within the jurisdiction equivalent to the amount of the Deceased’s estate as security for the due administration of the estate.Due to the difficulties in finding the required sureties, the applicant for the Letter of Administration will usually be advised to file an application for dispensation of sureties to dispense with the requirement of Section 35(1) Probate and Administration Act 1959 and it usually will be granted by the Court.
Step 4 collecting assets and payment of debts
Having done the above the Letter of Administration can now be extracted and once it is extracted from the High Court the administrator now can collect all the assets of the Deceased into his possession to settle all the debts or liabilities of the Deceased meaning the administrator can now go to the bank and withdraw the Deceased's monies from the bank or etc.
Step 5 distribution
Having collected the assets of the Deceased and settle all his debts, the Administrator can now distribute the assets of the Deceased in accordance with Section 6 of the Distribution Act 1958 (Act 300) which provides for the followings:
(1) After the commencement of this Act, if any person shall die intestate as to any property to which he is beneficially entitled for an interest which does not cease on his death, such property or the proceeds thereof after payment thereout of the expenses of due administration shall, subject to the provisions of section 4, be distributed in the manner or be held on the trusts mentioned in this section, namely-
(a) if an intestate dies leaving a spouse and no issue and no parent or parents, the surviving spouse shall be entitled to the whole of the estate;
(b) if an intestate dies leaving no issue but a spouse and a parent or parents, the surviving spouse shall be entitled to one-half of the estate and the parent or parents shall be entitled to the remaining one-half;
(c) if an intestate dies leaving issue but no spouse -and no parent or parents, the surviving issue shall be entitled to the whole of the estate;
(d) if an intestate dies leaving no spouse and no issue but a parent or parents, the surviving parent or parents shall be entitled to the whole of the estate;
(e) if an intestate dies leaving a spouse and issue but no parent or parents, the surviving spouse shall be entitled to one-third of the estate and the issue the remaining two-thirds;
(f) if an intestate dies leaving no spouse but issue and a parent or parents, the surviving issue shall be entitled to two-thirds of the estate and the parent or parents the remaining one-third;
(g) if an intestate dies leaving a spouse, issue and parent or parents, the surviving spouse shall be entitled to one-quarter of the estate, the issue shall be entitled to one-half of the estate and the parent or parents the remaining one-quarter;
(h) subject to the rights of a surviving spouse or a parent or parents, as the case may be, the estate of an intestate who leaves issue shall be held on the trusts set out in section 7 for the issue;
(i) if an intestate dies leaving no spouse, issue, parent or parents, the whole of the estate of the intestate shall be held on trusts for the following persons living at the death of the intestate and in the following order and manner, namely:
Firstly, on the trusts set out in section 7 for the brothers and sisters of the intestate in equal shares; but if no person takes an absolutely vested interest under such trusts, then
Secondly, for the grandparents of the intestate, and if more than one survive the intestate in equal shares absolutely; but if there are no grandparents surviving, then
Thirdly, on the trusts set out in section 7 for the uncles and aunts of the intestate in equal shares; but if no person takes an absolutely vested interest under such trusts, then
Fourthly, for the great grandparents of the intestate and if more than one survive the intestate in equal shares absolutely; but if there are no such great grandparents surviving, then
Fifthly, on the trusts set out in section 7 for the great grand uncles and great grand aunts of the intestate in equal shares.
(j) In default of any person taking an absolute interest under the foregoing provisions the Government shall be entitled to the whole of the estate except insofar as the same consists of land.
[Subs. Act A1004:s.3]
(2) If any person so dying intestate be permitted by his personal law a plurality of wives and shall leave surviving him more wives than one, such wives shall share among them equally the share which the wife of the intestate would have been entitled to, had such intestate left one wife only surviving him.
(3) When the intestate and the intestate's husband or wife have died in circumstances rendering it uncertain which of them survived the other, this section shall, notwithstanding any rule of law to the contrary, have effect as regards the intestate as if the husband or wife had not survived the intestate.
However, prior to the distribution, the Administrator will have to apply to the High Court for a distributor order to confirm with the distribution and to ensure that the respective shares of the beneficiaries are in accordance with the provision of Section 6 Distribution Act.
The grant of Probate
The grant of Probate is the most cost and time effective from of grant of representation.
The grant of Probate is issued by the High Court of Malaya allowing the person granted with the grant of Probate to administer the estate or assets of the Deceased in situation where the Deceased have died leaving a valid will.
It is important to note that a grant of Probate will only be granted in situation where the Deceased have died leaving a valid will and given the benefits of the grant of Probate it is therefore important for the general public to know the importance of having a valid will which will be covered in another topic.
The application for the grant of Probate will have to be made to the High Court
The followings are the procedure for applying for the grant of Probate:
Step 1 filing of the cause papers
the appointed lawyer will prepare the followings documents to be filed in the High Court:Ex Parte Originating Summons praying for the person named therein to be granted with the grant of Probate;Affidavit In Support of the Ex Parte Originating Summons;Notice of Appointment of Solicitors;List of assets of the Deceased;List of liabilities of the Deceased; andAffidavit of due execution of the will affirmed by at least one witness to the Deceased’s will
Step 2 hearing of the Ex Parte Originating Summons
Once the above is filed the High Court will processed the documents and will seal the Ex Parte Originating Summons with the seal of the High Court. The High Court at the same time will fix a hearing date for the Ex Parte Originating Summons.The Ex Parte Originating summons will then be heard in the High Court before a Registrar and the intended executor or executors will have to be present in Court for the hearing. The Registrar upon being satisfied that the papers filed are in order will grant order in terms of the Ex Parte Originating Summons i.e. will grant the grant of Probate to the persons named.
Step 3 collecting assets and payment of debts
Once the grant of Probate is extracted the administrator now can collect all the assets of the Deceased into his possession to settle all the debts or liabilities of the Deceased.
Step 4 distribution of assets
Having collected the assets of the Deceased and settle all his debts, the Administrator can now distribute the assets of the Deceased in accordance with terms of the wills.
The difference between grant of probate and grant of Letter of Aministration.
There is no requirement to provide for the sureties as a form of securities for the due administration of the estate and there is also no need for the executor to apply to the High Court for distribution order because distribution is in accordance with the terms of the will.
The above differences will resulted in significant saving of time and costs in administration of the Deceased’s estate.