After so much has been shared on estate planning in our previous article entitled An Overview of Estate Planning in Malaysia, which is about putting a plan in place to deal with our assets and liabilities while we are alive, this article is about what happens to our plan upon our death, whether or not we have one, i.e. the estate administration.
To avoid confusion, do note that the information as follows only applicable to the non-Muslims in the Peninsular of Malaysia despite some are equally applicable to the Muslim and to East Malaysian.
Basically, estate administration entails three steps as follows:-
(a) to call in the deceased’s assets;
(b) to pay off the deceased’s debts and liabilities (if any); and
(c) to distribute the estate in accordance to the deceased’s will or trust deed, without which to distribute in accordance to the Distribution Act 1958, as elaborated in Distribution of Estate under Distribution Act 1958.
Simply put, our estate plan will definitely affect the manner of administration of our estate.
Who will be In Charge of Our Estate Administration?
It depends on whether someone passed away leaving a will or without a will.
In the case of someone passed away leaving a will, the executor named in the will be the person to execute the will.
This means the executor will locate the will, bring it together with the death certificate and the deceased’s list of assets and liabilities to start administering the testator’s estate. In other words, the executor assumes the official role of proving a will by applying for a grant of probate.
‘Testator’ is a legal term for the person who wrote a will.
Whereas in the case of someone died without writing a will, any persons interested in the estate of the deceased may apply as the administrator.
An administrator is a person whom a letter of administration is granted authorizing the administrator to administer the deceased’s estate in accordance with law, i.e. the Distribution Act 1958. It must be noted that the appointment of administrator lies within the discretion of the Court as stated in Section 30 of Probate and Administration Act 1959.
Estate Administration With a Will
Where an executor is appointed under the will, he or she may start off administering the testator’s estate by applying for a grant of probate in the High Court.
A grant of probate means a grant under the seal of the High Court authorizing the executor or executors named in the will to administer the testator’s estate.
Alternatively, the executor may renounce his or her right and apply for summary administration by applying for such declaration or direction via Amanah Raya Berhad (which is a Public Trust Corporation established under the Public Trust Corporation Act 1995) provided that the deceased’s estate contain only of movable properties totaling not more than RM600,000 only.
Further details in terms of their fee can be found in
As compare to Amanah Raya Berhad, High Court has jurisdiction to grant probate for an estate of any value. This is provided in Section 24(f) Courts of Judicature Act 1964.
Whether the executor opts for grant of probate in the High Court or summary administration via Amanah Raya Berhad, the deceased’s estate will still be disposed of in accordance to his or her will.
As part of the procedural requirement, both the executor and Amanah Raya Berhad are required to declare in writing to undertake or by oath, to administer the estate accordingly and such declaration shall be filed in the court.
Estate Administration Without a Will
Where someone died without writing a will or on the failure of executors, any persons interested in the estate of the deceased may start off administering the intestate’s estate apply the letter of administration in the High Court.
‘Intestate‘ is the legal term for someone died without writing a will. A letter of administration means a grant under the seal of the High Court authorizing the administrator or administrators to administer accordingly.
Alternatively, the interested person may apply for summary administration via Amanah Raya Berhad provided that the deceased’s estate contain only of movable properties totaling not more than RM600,000 only. And if this opted, no person will be entitled to petition for grant of letter of administration thereafter.
As seen from above, the administration of intestate’s estate is similar to that of the testator’s estate.
The main difference is that for the administration of intestate’s estate, there is an exclusive jurisdiction of the district land administrator (‘DLA’) to administer summarily by virtue of section 4 of Small Estate (Distribution) Act 1955 (‘SEDA 1955’).
Under Section 3(2) SEDA 1955, small estate means an estate of a deceased person consisting:-
(a) wholly or partly of immovable property; and
(b) not exceeding RM2,000,000 in total value at the time of application for summary administration.
In ascertaining the value of the small estate, Section 3(4) SEDA 1955 provides that we must not deduct the debts of the deceased and include property which is to be held by the deceased as a trustee.
Guided by this principle, the value of the estate certainly includes the deceased insurance payout and his or her EPF monies if there is no nomination done by the deceased.
Having said that, unless there is a failure of executors where a will is in existence, whichever the option for administration in the case without a will, the intestate’s estate will be distributed of in accordance to Distribution Act 1958 (refer to Distribution of Estate under Distribution Act 1958).
We hope our articles in this area of the law offer you sufficient information to make up your mind to plan your estate accordingly due to the sheer advantage when it comes to administering the same.
About the Author:
This article is written by Chia Swee Yik, Partner of this Firm, who has provided advice on probate law.
Feel free to contact us using the form below if you have any queries.