Distribution order in Malaysia plays an important role in the estate administration process. Our article explains what it is, how to get it, and the fees.
Understanding Distribution Order in Malaysia?
After the death of the deceased, and according to the Malaysian inheritance laws, one needs legal orders to distribute the deceased estate to the rightful beneficiaries. One of those orders is the distribution order.
Distribution orders are orders applied for and given when the deceased dies intestate, that is, without leaving any will. It is different from a grant of probate, which is the order given when the deceased leaves a will.
Distribution order usually means orders given in 2 situations where the deceased dies intestate where the estate is a:
A small estate
Under the Small Estates (Distribution) Act 1955, a small estate is defined as an estate that includes immovable property where the estate value is not more than RM 2,000,000. Here, the distribution order allows the administrators to handle the small estate distribution order and distribute the deceased’s estate to the legal heirs according to the Distribution Act 1958.
Not a small estate
When the deceased’s estate value is more than RM 2,000,000, then it is not a small estate. Then, the administrator requires a grant of letter of administration (LA) from the High Court under the Probate and Administration Act 1959.
After the letter of administration is given, and if the estate includes any immovable property, such as a house, then a distribution order is required to transfer those properties to the intended beneficiaries. In this way, the distribution order works like a vesting order in Malaysia that allows the transfer of immovable properties to the rightful beneficiaries.
Steps in Applying For Distribution Order
Here are a few steps in applying for a distribution order in Malaysia, which are as follows:
Identify administrator
The administrator is an individual or organisation given trust and authority by the deceased to manage the deceased’s estate and respect the deceased’s last wishes. After the death of the deceased, the loved ones should identify an individual, usually amongst close family members, who can handle the administration of the deceased’s estate to be the administrator.
Under Malaysian law, the administrator has a fiduciary duty to avoid conflict of interest in the estate and manage the estate, including distributing the properties to the rightful legal heirs.
Prepare documents
As the new administrator will have the responsibility for the proper administration of the estate, it is advisable to engage lawyers to help them with the process.
Here, the administrator will have to prepare the necessary documents, such as the title deed, unit trust statement, original death certificate, and legal documents such as affidavits and dispensation of sureties.
Sureties are individuals required to guarantee the proper administration of an estate and are required in an application for the grant of a letter of administration. However, the court may, at its discretion, allow the dispensation of sureties.
Apply to the authorities.
After the preparation and execution of the documents, the administrator or their lawyers on their behalf then apply to the legal authority for the distribution order. The appropriate authority to apply for depending on the situation is for:
(a) Small estate distribution: To apply to the district land administrator office where one of the immovable properties of the estate is located.
(b) Grants of letter of administration: To the High Court. The legal proceedings follow the legal procedures under the Rules of Court 2012.
Hearing
The authorities will then fix a hearing whereby the administrator and their appointed lawyers will have to attend. If it is in the High Court, the officer of the courts, the Registrar will then check the documents to ensure the documents are proper.
Once they are satisfied with the documents and the related payments have been made, then the court and land office will order the grant of the letter of administration and distribution order.
Estate Administration
After the granting and issuance of the distribution orders, the administrator's duties and obligations in managing the deceased’s estate continue. Those legal responsibilities include:
(a) Collecting assets
The administrator collects the deceased person’s properties, such as title deeds and personal property.
(b) Paying liabilities
He then pays off the liabilities of the deceased, such as taxes, funeral expenses, and other claims by creditors.
(c) Distribution
The estate distribution process is continued with the transfer of the legal ownership of the deceased assets, such as vehicle ownership and funds in financial institutions, to the appropriate beneficiary according to the applicable intestate succession laws. The applicable laws for:
(i) Non-Muslim estate
The applicable law is the Distribution Act 1958 (DA 1958), where this Act states the rightful beneficiaries and their respective entitlements. The rightful heirs include eligible family members such as surviving spouses, children, parents, and brothers and sisters. However, the deceased children are not among the eligible beneficiaries.
(ii) Muslim estates
When the deceased is Muslim, then the distribution follows the Islamic inheritance law.
When there is the transfer of immovable properties under the order of the court, then the order of the court is usually submitted together with the instrument of transfer, that is, the memorandum of transfer, and generally a nominal stamp duty of RM 10 is required to be paid as the ad valorem stamp duty.
Hiring Lawyer and Fees
The executor/administrator should engage an experienced lawyer to help with the process, as they can provide valuable assistance in the following:
Legal advice
A good lawyer can advise on the legal requirements and legal rights of the administrator and beneficiaries in the process, together with tips on estate planning.
Efficient administration
By advising on the right way, a good legal professional can also ensure effective administration and distribution of the estate and prevent legal disputes.
On the query of ‘letter of administration Malaysia cost’ and estate administration fees, generally the fees start from thousands of ringgits and include the following:
Legal fees
This includes the fees charged by the lawyers for advising on the legal process, preparing the documents, and representing the clients in front of the authorities.
Disbursements
This includes court filing fees, travel costs, and miscellaneous expenses such as affirmation and photocopy.
If you are looking for a probate lawyer and looking for a quote, do contact us and we will assist you.
Conclusion
Distribution order in Malaysia is important for the estate administration process. If you need any assistance with this or are looking to get a grant of probate/letter of administration or are looking for a lawyer in Kuala Lumpur, do contact us and we will assist you.
Frequently Asked Questions
1. What is a distribution order in Malaysia?
A distribution order in Malaysia is a court document ordering the distribution of a deceased's person immovable property. It is given after a grant of letter of administration has been issued by the High Court of Malaya.
2. Who are the beneficiaries of the Distribution Act in Malaysia?
The rightful beneficiaries under the Distribution Act in Malaysia, that is, the Distribution Act 1958, include the surviving spouse, children, and parents.
3. Can you distribute assets without a will in Malaysia?
Yes. The distribution of assets will then follow the applicable intestate succession laws, the Distribution Act 1958 for non-Muslims. As for the Muslims, it will follow the Syariah laws.
