Letter of administration in Malaysia is an important legal document that allows the administration and distribution of the deceased estate to the rightful heirs.
This article explains the procedure step-by-step, the time required, and the fees.
Understanding Letter of Administration in Malaysia
A grant of letter of administration (LA) in Malaysia is an order granted by the High Court of Malaya under the succession laws, that is the Probate and Administration Act 1959 to the administrator to manage the deceased estate when there is no will.
The administrator of the deceased can be amongst the potential beneficiaries, that is the person who is interested in the deceased person's estate. He is responsible for the estate distribution of the deceased properties to the appropriate beneficiaries, Letter of administration in Malay means ‘surat kuasa mentadbir’.
In other situations when there are no wills, the estate administrator can also apply for:
Small estate application
By applying to the land office/land administrator where one of the immovable properties of the estate is located. This only applies when it is a ‘small estate’ which is defined under section 3 of the Small Estates (Distribution) Act 1955 as:
“an estate including immovable property located in Malaysia with/without movable property where the estate value does not exceed RM2 million.
Summary administration through Amanah Raya Berhad (ARB)
By applying to ARB and it can administer the estate as though a letter of administration has been granted to them with certain fees. However, this only applies when it consists only of movable properties and a total value not more than RM 600,000-00.
Thus, when there are no wills, the administrator has several options to choose from for the administration of the deceased person’s estate: letter of administration, small estate option, and through ARB.
Steps to Get a Letter of Administration
The estate administration process through a letter of administration in Malaysia usually follows below steps:
Step 1: Identify the administrator
The administrator is responsible for the deceased asset management and distributes the estate assets to the legal heirs according to the applicable inheritance laws.
Under Section 30 of the Probate and Administration Act 1959, the potential administrators include the deceased person's legal heirs or family members. Usually, it is one of the eligible family members, on behalf of the family, applies to be the administrator. He should be at least 18 years old, healthy, and mentally sound.
If no close family members are willing or suitable to act as administrators, one may consider appointing a public trustee as administrator of the deceased’s estate under the Public Trust Corporation Act 1995. They may charge fees for acting as an administrator.
Step 2: Identify a list of assets and liabilities + beneficiary
The next step continues with the intended administrator compiling a list of the deceased properties and liabilities. In Malaysia, there is no estate duty. Furthermore, he should identify the list of beneficiaries, that is the rightful heirs to the estate.
Step 3: Prepare and submit the application to the High Court of Malaya
The administrator of the estate or his lawyer then continues by applying for a grant of letter of administration from the High Court of Malaya following the legal procedures, that is the Rules of Court 2012 by filing cause papers such as ex-parte originating summons and affidavit in support together with the following documents:
The original death certificate of the deceased
Identification documents of the administrator (e.g., identity card/passport) and documents showing the relationship between the deceased and the administrator, such as a birth certificate or marriage certificate
List of beneficiaries and identity card of the beneficiaries and documents showing the relationship between the deceased and beneficiaries (such as birth certificate and marriage certificate)
A list of assets of the deceased, including immovable properties and the estimated value of the assets. The administrator should also attach any relevant documents showing ownership of the estate assets, such as property titles, bank account statements, and insurance policy statements.
A list of liabilities of the deceased and estimated value.
Administration oath
Administration bond (This is only required when the estate’s gross value is more than RM 50,000)
This is when 2 other sureties provide security for the due administration of the estate by the administrator. The 2 sureties must be at least 18 years old, resident in Malaysia, and have assets within Malaysia which must at least equal the total amount of deceased’s estate assets.
Alternatively, the administrator can also apply to the High Court judge for dispensation of the sureties.
Step 4: Hearing
After reviewing the application, the court will schedule a hearing date. The administrator must attend the hearing. The court, through its officer, usually the Registrar, may ask the administrator some questions and require the administrator to provide additional information or documents (if required)
If the High Court is satisfied that all the documents are proper, then it will order a grant letter of administration to be given to the administrator.
Step 5: Administering the estate following the law
After paying the required fees and with the granting of the letter of administration, the administrator should get a certified true copy of the cause papers from the High Court, including the official grant, list of beneficiaries, and list of assets and liabilities as these are required for the administration later on
Then, the administrator duties continue as follows:
Collecting the assets: The administrator then collects all the deceased's assets which are listed earlier in the application.
Paying liabilities: The administrator then pays the deceased's outstanding debts, such as loans and bills.
Estate Distribution
After paying off the debts, then the administrator continues by distributing the estate to the legal heirs according to the applicable intestate succession laws. For non-Muslims, the applicable law is the Distribution Act 1958, and the main beneficiaries and their entitlements are followed:
Surviving spouse, child, and parents: Parent (1/4), spouse (1/4), child (1/2)
Surviving spouse and child only (parents predecease): Spouse (1/3), child (2/3)
Surviving spouse and parents (no child): Spouse (1/2), parents (1/2)
Surviving parents and child (spouse predeceases): Parents (1/3), child (2/3)
Spouse only (no child/ parents predecease): Spouse (100%)
Child only (spouse and parents predecease): Child (100%)
Parents only (no child/ no spouse/ spouse predeceases): Parents (100%)
After the distribution, the estate administration process under the letter of administration in Malaysia is complete.
Difference between Letter of Administration and Probate
A grant of probate in Malaysia is an order given by the court to the executors to administer the deceased’s death when there is a will that complies with the Wills Act 1959. Grant of letters of administration only applies when there are no wills.
Probate application is also filed in the High Court of Malaya and the probate process is usually faster. After the grant of probate is issued by the High Court, then the executor can pay off the debts and distribute the assets to the beneficiaries named in the will according to the inheritance rules.
The rightful beneficiaries are stated in the will and usually include specific family members. After the distribution, then the probate matters are complete. If you are looking for a probate lawyer or need any legal assistance, you can contact us.
Time, Fees and Lawyer
The application for a letter of administration in Malaysia usually takes six to 9 months, depending on the complexity of the estate and the court's workload.
The estate administration fees for the grants include the legal fee, court filing fees, and disbursements (expenses incurred by the law firm such as travel, postage, and photocopying). Usually, the total fees start at a few thousand ringgits.
You may consider below factors in hiring a legal adviser/law firm for your matters:
Experience and expertise: Look for a lawyer with experience in estate matters, especially in obtaining a letter of administration.
Good reputation: Check the reviews of past clients to ensure they provide good service.
Fees: It is important to clarify the lawyer's fees upfront to ensure they are transparent and reasonable.
Whether you are an executor or administrator and looking for a lawyer in Kuala Lumpur for your administrations matters, you can contact us. Our lawyers understand estate and family law and can help you with the granting of a letter of administration.
Conclusion
Getting a letter of administration in Malaysia is important to ensure the deceased estate is distributed to the rightful beneficiaries. If you need any assistance with this, do contact us and we will assist you.
Frequently Asked Questions
1. How to obtain a letter of administration in Malaysia?
The administrator can apply for a letter of administration from the High Court of Malaya. In the application, the administrator should attach documents, such as a death certificate, identification cards of administrator and beneficiaries, and a list of the deceased's assets and liabilities.
2. How much does letter of administration cost in Malaysia?
The cost of getting a letter of administration in Malaysia can vary depending on the complexity of the matter. Usually, the total fee range starts at a few thousand ringgit and that includes legal fees, court filing fees, and disbursements. You can contact us to get a quote.
3. What is the difference between probate and letter of administration in Malaysia?
A grant of probate is required when there is a will whereas a letter of administration is required when the deceased passed away without a will. The process for a letter of administration is usually longer.
4. Who are the sureties for letters of administration in Malaysia?
The sureties are people at least 18 years old and residing in Malaysia. Furthermore, they must have assets within Malaysia at least equal to the deceased’s estate value.
