Probate vs Administration: The Different Processes of Estate Distribution in Malaysia

Relevant law and authorities: Wills Act 1959 – s3, s4, s5; Distribution Act 1958 – s6; Probate and Administration Act 1959 – s30, s60(4)

*Statutes applicable only to non-Muslims in West Malaysia.

Application process for a Grant of Probate…

A Grant of Probate is an official court document allowing the executor of a valid will to manage and distribute the deceased’s estate according to their wishes. To apply for a Grant of Probate, the deceased must have had a valid will under the Wills Act. Generally, this means the will must be in writing, signed by the testator, and witnessed by two witnesses who also sign in the presence of the testator.

The process begins with the executor or executors named in the will applying for the Grant of Probate via the Registry of the High Court. This application is made using an Originating Summons accompanied by an Affidavit in Support, as well as an Affidavit of Due Execution. This Affidavit in Support sets out the facts of the deceased’s estate. It generally includes documents such as the death certificate and will, and information like a list of the assets/debts and beneficiaries of the estate. The Affidavit of Due Execution is a document signed by the witnesses who signed the original will, and it confirms that the deceased was the one who signed and that they understood the will they were signing.

Next, the executors and their lawyer attend a hearing with the Registrar to answer any questions the court may have, such as questions on the executor’s identity or if the will complies with the legal requirements. If the inquiries of the Registrar are satisfied, then a Grant of Probate can be issued.

Application process for a Letter of Administration…

A Letter of Administration is an official court document granting an administrator the power to manage and distribute a deceased’s estate according to the fixed rules of the Distribution Act, provided the deceased passed away intestate (meaning without a valid will).

The first step of getting a Letter of Administration is to decide on an administrator to handle the applications for LA and the distribution of the estate. An administrator must be someone who is entitled to inherit from the estate. Additionally, there is an order of priority to follow set out by the Distribution Act, meaning usually the children or spouse act as administrators. If there are several individuals who are equally entitled to administration, then the others must consent to the appointment of the chosen administrator or renounce their rights to administer the estate.

Next, the administrator can then apply for the Letter of Administration via the Registry of the High Court. This application is made using an Originating Summons accompanied by an Affidavit in Support, as well as an Exemption of Sureties. This Affidavit in Support is similar to the prior one described, except no will is included and the documents to prove the relationships of the beneficiaries such as birth certificates and marriage certificates must be given. An Exemption of Sureties allows the administrator to avoid needing to find the two sureties, who are meant to act as guarantors to ensure the administration process is carried out lawfully.

Then the administrator and their lawyer attend a hearing with the Registrar to answer any of the Court’s questions regarding subjects like the rights of the administrator, the beneficiaries’ connection to the deceased, or the assets and debts of the estate. If the inquiries of the Registrar are satisfied, then a Letter of Administration can be issued.

What happens after getting the Grant of Probate vs Letter of Administration?

After getting the Grant of Probate, the executor then uses the assets of the estate to pay off any outstanding debts, such as loans or taxes owed, as well as funeral expenses. After all debts have been settled, all remaining assets will be distributed according to the rightful beneficiaries according to the instructions given in the will.

After getting a Letter of Administration, the administrator has the power to collect and distribute most parts of the estate, except for immovable assets (meaning land or properties), according to the terms set out in the s6 Distribution Act. Similarly to executors, the administrator would first settle any debts left outstanding by the deceased. After that, the administrator would need to distribute each remaining asset to the next of kin of the deceased, such as their spouse, children or parents. For assets that are movable, the administrator is able to collect and redistribute them using the Letter of Administration. However, immovable assets require an application for a Vesting Order from the court to present to the Land Office to facilitate transfers of property.

Why are Letters of Administration more complicated?

In summary, the process of applying for a Letter of Administration and then administering the estate poses quite a few additional hurdles compared to applying for a Grants of Probate and then executing the will. This is due to: (1) compilation of assets and next of kin; (2) affidavit of agreement to appoint an administrator; (3) burden of proving family relations; (4) exemption of sureties; (5) vesting order for the transfer of immovable properties.

(1) If a properly written will is available, it will likely already contain comprehensive information on the assets in an estate and mention all beneficiaries, which makes the compilation of assets, liabilities and beneficiaries for the probate application easy. If no will exists, and the extent of the deceased’s assets are not known to their family, then the process of compiling all the assets for the affidavit becomes a much lengthier investigative process of tracking down the deceased’s assets. Additionally, if any assets are discovered later on after the application for administration has already been filed, an additional amendment or corrective order would need to be filed for each change to the original application.

(2) Unlike wills that clearly establish who has been chosen to bear the responsibility of executing the will, the administrator of an intestate estate needs to be chosen from the pool of next of kin who are entitled to part of the estate. Generally, this would be according to the order of priority of s6 of the Distribution Act. However, the other family members entitled to benefit and administer the estate must unanimously agree on the administrator and each of them must waive their right to administer to appoint the chosen administrator.

(3) Since the beneficiaries of an intestate estate are determined purely by familial relations to the deceased, the application process requires the applicant to prove the connections of the beneficiaries to the deceased, such as by including birth certificates for the parents or children of the deceased and the marriage certificates for the spouse with the Affidavit in Support, as well as proving it to the Registrar during the hearing.

(4) Generally, 2 Sureties (people with assets equivalent to the value of the intestate estate) are required to guarantee the proper administration of the estate by the administrator. However, in most cases this can be avoided, but it would require an additional application for Exemption of Sureties.

(5) Grants of Probate have the power to allow the executor to manage any part of the estate, including the transfer of immovable properties of the deceased to the person specified as a beneficiary in the will. However, Letters of Administration are only able to facilitate the administrator collecting and distributing movable assets, so in order to distribute any properties, the Land Office would require a Vesting Order, which needs a separate application to the High Court to obtain.

Exceptions or variations to the aforementioned processes…

The main processes focused on above are for the two standard administration methods: application for a Grant of Probate (when it is non-contentious) and applications for a Letter of Administration. However, there are several other types of special situations with different administration methods, which will be summarised briefly below.

1. Contentious Probate

This occurs when there is disagreement over some aspect of the will, such as the authenticity or its validity on the basis of testamentary capacity. In this situation, the application for probate must be changed from Originating Summons to Writ, meaning the court will have to hold hearings and ultimately decide whether the will should be considered valid and the Grant of Probate can be issued.

2. Small Estate

For an estate to qualify as “small” according to the Small Estates Distribution Act, it must be valued at less than RM5,000,000. For estates that fall under this category, the administrator must submit a petition for distribution to an Estate Distribution Officer (EDO). The EDO then notifies the principal registry and, after verifying no other petitions have been made, can call a hearing for all interested parties in the estate to discuss the distribution. Then the Order for Distribution is given and the debts will be settled, with all remaining assets being distributed following the provisions of s6 of the Distribution Act.

3. Summary Distribution

For an estate to qualify for Summary Distribution, it must be valued at less than RM600,000 and be composed entirely of movable property (meaning any other assets apart from real estate including vehicles, jewellery, bank accounts, stocks, etc). In this situation, the administrator applies for a petition of distribution through the EDO, and a hearing is not required, so the Order of Distribution will be issued and the debts will be settled, with all remaining assets being distributed following the provisions of s6 of the Distribution Act.

Conclusion…

Overall, whether an estate is administered through Grant of Probate or Letter of Administration depends on whether the deceased had a valid will. Both processes serve the same purpose of distributing the estate, but having a will makes the process more straightforward and quick, whereas not having a will requires additional paperwork and evidence that causes delays and increases costs. Taking the time and/or money to prepare a valid will, not only allows you to establish your wishes and ensure they are followed, but also simplifies the legal process for your loved ones in the future.

Drafted by See-Teng Wong under the supervision of Partner Patrick Tan Yan Hong.

Disclaimer:

This article is intended for informational purposes only and does not constitute legal advice. Every situation is unique, and specific legal advice should be sought based on the particular circumstances. Readers are encouraged to contact us at info@tnhlaw.com.my if they require legal advice or have any questions regarding the content of this article.