UPON the death of a person, a member of his family or a person interested in his estate must take charge to administer and distribute his estate.
Upon his death his assets, such as his bank account, are frozen. No one can deal with them and things will be left in limbo.
If he has left a will, then they can apply to the High Court for what is called a probate, by which an executor to his estate will be appointed in accordance with the will. If, however, he died intestate, i.e, he has not left a will, then they can apply for letters of administration (LA) to be appointed as the administrator of his estate.
There are three ways one can go about obtaining LA.
Firstly, they can apply to the High Court.
Secondly, they can apply to Amanah Raya Bhd. But, this is for cases where the estate consists only of movable property and is valued at RM600,000 or less.
Thirdly, they may apply to the land office as a small estate. This is done under the Small Estates (Distribution) Act, 1955. They can apply as a small estate only if three conditions are complied with. First, the total value of his assets must not exceed RM2mil. Second, the deceased person must not have left a will. Third, there must be immovable property (e.g, land, house or apartment) in the name of the deceased within the jurisdiction of the land office.
It is this last method of obtaining LA that we will discuss here.
This is a cheap and, usually, fast mode of obtaining LA.
It is much cheaper for the simple reason that there is no need to appoint a lawyer as lawyers are generally not allowed to attend the hearing. The land office also does not charge any fee for filing of the petition for LA.
The applicant starts by completing Form A prescribed under the Small Estate (Distribution) Regulations. It is a simple form, available online or from the land office. In essence, it lists down all the assets and liabilities of the deceased as well as his beneficiaries. After completing the form, it must be signed by the applicant before a commissioner for oaths. Form A must be filed with the land office.
A copy each of the following documents must also be filed at the same time:
> the identity card and birth certificates of each beneficiary;
> the deceased’s marriage certificate, if any;
> the deceased’s death certificate;
> evidence of his assets, such as share certificates, savings accounts book, bank statement, motor vehicle registration card, EPF statement;
> either a certified true copy of the land title or an official title search from the land office;
> (where the immovable property has no separate title) the sale and purchase agreement;
> the current quit rent and assessment receipts.
Generally, within three months after filing the application, the land office will issue a notice to hear the application. The notice will set the time and date of the hearing.
The applicant and other beneficiaries must attend the hearing, which will be conducted by the land administrator.
The applicant must attend the hearing. Any other beneficiary, however, who is unable to attend may submit a letter of consent by completing Form DDA, available online or from the land office, which must be signed before a commissioner for oaths.
Form DDA will specify the beneficiary’s wishes as to the distribution of the estate and may also opt to renounce his share in favour of another beneficiary.
Everyone attending the hearing must bring along their original identity card. The applicant must also bring along the original of the other documents, copies of which were filed with the Form A.
During the hearing, the land administrator will need to be satisfied with the particulars set out in the Form A, verify the identity of the applicant and the beneficiaries, the assets and the beneficiaries’ entitlement.
The land administrator will then proceed to grant LA to the applicant and to make an order for distribution of the estate.
For Muslims, distribution will generally be according to Faraid law. For non-Muslims, the distribution will generally be in accordance with the Distribution Act 1958, which determines the share each beneficiary is entitled to.
However, if the land administrator is satisfied that the beneficiaries are in consensus for the estate to be distributed differently, the administrator can make an order according to the consensus.
Fees are payable for grant of LA to be issued:
> RM10, if the value of the estate is between RM1 to RM1,000
> RM30, if the value of the estate is between RM1,001 to RM50,000
> 0.2% of the value of the estate, if it is more than RM50,000.
The administrator of the estate of the deceased has the duty to do the following:
> utilise the assets of the estate to pay for funeral expenses and the costs in obtaining the grant of LA
> settle the liabilities of the deceased
> distribute the balance of the estate to the beneficiaries.
For movable property, the administrator of the estate will produce the grant of LA to various parties like banks, the EPF and Tabung Haji, for withdrawal of money and transfer of ownership of assets.
For this reason, it is advisable to apply for several copies of the grant of LA, as each authority, agency, company or bank will require this to be produced to transfer the asset. The land office charges a fee of RM5 for each copy.
For immovable property where there is a separate title, the administrator of the estate has to forward to the land registry or land office the grant of LA together with the original property title, for transfer of the property to the beneficiary. No fee is charged for this.
In conclusion, obtaining LA by way of a small estate application is an attractive option, both in terms of cost as well as efficiency. Its use should be encouraged. Perhaps the authorities can consider removing the requirement that there must be immovable property before an estate can qualify as a small estate.
That would alleviate the pressure on the courts as well as provide a cheap, speedy and efficient means to attend to estate matters.
The writer, a lawyer practising at Messrs G. Ragumaren & Co, is a member of the Conveyancing Practice Committee, Bar Council, Malaysia. This column is brought to you by the Malaysian Bar Council for your information only. It does not constitute legal advice.