In Malaysia, when someone passes away, one of the concerns is what will happen to their assets and belongings. These assets can include things like their businesses, properties, shares, vehicles and jewelry.
If the deceased has left a will, the distribution of their assets and belongings are laid out clearly. However, if they pass away intestate or without a will, their assets will be distributed according to the law.
From this we know that there are basically two ways in which a deceased person’s estate will be administered, which is according to their last will and testament, or in the absence of one, according to the law.
In Malaysia, non-Muslims who die intestate will have their assets distributed according to the Distribution Act 1958 ( in Peninsula Malaysia and Sarawak) as well as the Intestate Succession Ordinance 1960 for Sabah.
Whichever way the deceased’s estate is to be distributed, it will be under the management of an administrator.
What is an Estate Administrator’s Role?
Very simply, these are individuals who are responsible to establish and confirm the assets of the deceased, distribute them according to the will or law, and pay off debts if required.
If the deceased has left a will, the will usually state the name of the estate administrator. In a will these individuals or a group of individuals are known as executors of the will.
If there is no will, an administrator may be appointed by the courts.
When an individual passes away, their assets are frozen. This means it cannot be transferred, paid or moved in any way.
This happens until a grant of probate or letter of administration is applied for and granted by the courts.
What is a Grant of Probate and Letter of Administration?
Before we look at what sets them apart, we should consider their common features.
Both of these documents signify the legal authority given to a person or a group of people to administer the assets of a deceased person.
Applying for these documents requires you to pay for a court filing fee and stamp duty that is a percentage of the asset value.
The main difference between these two is whether the deceased died with or without a will. In the case that there is a will, the executor(s) of the will will apply for a Grant of Probate.
On the other hand, if there is no will, then a Letter of Administration (LA) should be applied for. This application can be made by anyone with a vested interest in the deceased’s assets. They can be relatives or even creditors trying to achieve a debt resolution.
The process and documents required for both are also different. Usually, a Grant of Probate (GP) application process is much faster than a Letter of Administration(LA). This is because the GP is given to an executor that is already named in a will.
The following table summarizes the difference between a GP and LA:
Important Notes on Letters of Administration
While the application of a GP is pretty straightforward, LA applications come with some complexities. For the application and granting of a GP, there is only one pathway which is through the High Courts. However, for the application of an LA, there are three different pathways, as we will soon see.
The first pathway to obtain an LA is through the High Courts. If the assets of the deceased are more than RM500,000 in value, two sureties or guarantors are required. These are two relevant individuals to the administrator ( like friends or family) that have assets of an equal or similar value to the assets of the deceased.
Only when these have been provided will the administrator be allowed to transfer the deceased’s assets into their own name and begin the distribution process according to the law. The sureties or guarantors are meant to ensure that the administrator does not abuse his or her authority.
The second pathway for distributing an intestate pool of assets is through Amanah Raya Berhad, which is a government linked trustee. However, this only applies if the deceased’s assets are worth less than RM600,000. Anyone who stands to benefit from the estate can make the application, but will have to pay a fee to Amanah Raya, ranging from 1% to 5% of the total asset value. Here’s how the charges work:
Source: Amanahraya Soalan Lazim Pentadbiran Pusaka
The third pathway is through the Small Estates (Distribution) Act 1955. However, this only applies to immovable assets like property. The application is made to the local land office where the asset(s) are located. Once the applicant has submitted all the required documents and proof, the land office will hold a hearing where the applicants and beneficiaries have to be present. If there are no major problems, an LA will be granted so that distribution can commence.
Planning Your Estate and Seeking Legal Help
One of the key takeaways here would be that individuals should always strive to leave a will for their loved ones. As you can see, passing away without a will makes for a very long and complex process which can take years to settle.
This will leave those dearest to you in a lurch, and probably in financial difficulty as well. As such, do consider preparing a will and name your beneficiaries and executors as soon as possible.