administration of small estate

NUR ALYA SYAFIQA BINTI MOHAMAD 256218 E-PORTFOLIO LAW OF SUCCESSION & PROBATE

NUR ALYA SYAFIQA BINTI MOHAMAD 256218 administration of small estate

The procedures relating to 1 the administration of a small estate is governed by the Small Estates (Distribution) Act 1955 (SEDA). WHAT IS SMALL ESTATE? SECTION 3(2) OF SEDA An estate of a deceased person consisting wholly or partly of immovable property situated in any state and not exceeding two million ringgit in total value. PETITION FOR DISTRIBUTION OF A SMALL ESTATE Section 8(1) of SEDA gives authorization to certain people to lodge the petition. Petition must be in Form A and attached with evidence of the deceased’s death and all copies of the documents relating to the deceased’s estate. the corporation person with interest as beneficiary a purchaser penghulu or a Settlement a creditor Officer of the district where the land is located GENERAL PROCEDURE Land administrator has an exclusive jurisdiction on this matter. Section 8(3) requires the land administrator to give notice to the principal registry of the High Court as a receipt of his application,

2 Figure 1 illustrates the general procedure for the state of the deceased to be liquidated. As for small estate distribution, the Grant of Probate may be obtained from the Land Office for immovable and movable asset while Amanah Raya Berhad (ARB) is in charge for a Grant of Probate of movable assets only. To get a clear look at this figure, do refer to \"Jurnal Teknologi\" by Fatin Afiqah and Mohammad Tahir Sabit. The authors also pointed out several weaknesses or confusions that may be generated from the current framework such as a reliable valuation report is required by the Land Office or Civil High Court for the determination to file the case although it is not legally required under the Act. This logically may cause delay to the estate distribution. (Md. Azmi & Haji Mohammad, 2015) HEARING Firstly, a notice of petition shall be served by the LA to beneficiaries, claimants or any persons with interest. Secondly, witnesses or administer oaths shall be summoned and examined by the LA. The production of the document shall be compelled and be delivered as well. Finally, the hearing shall be executed. The petitioner is required to attend and provide original documents.

Note that a collateral dispute under sec 14(2) may be 3 executed if LA considers the necessity and desire in the interests of justice as to the possibility for the assets to be affected after the determination. Consequently, the making of distribution order will be delayed. LA shall decided on a collateral dispute before distribution order is made. DISTRIBUTION ORDER A distribution order may be issued by the LA after the hearing, The assets shall be in transferable as the Order will be labelled under Form E. Thus, it is necessary to ensure that there is no encumbrances on the assets that prevent it from being transferred or else the Order shall not be issued. The administrator of the asset will be served with a letter of administration by the LA to deal with such encumbrances. (Drs et al., 2017) Distribution order may be made in three forms which are :- DIRECT The registration of Order shall be made under sec 348 of TRANSMISSION the NLC and sec 16 of the SEDA. Sec 13(2) SEDA allows the registration of the share of an infant beneficiary in any immovable property to be made under a suitable person as the trustee and caveat shall also be entered so the infant's interest is protected. Besides that, the asset of the deceased shall be transferred by LA to any persons that have purchased it. Sec 16(3) requires money that is payable to any person with unknown location, lack of legal capacity or refuse to accept the money to be deposited with the Corporation. May take into consideration the nature of the case. GRANT OF LETTERS Sec 13(7) allows the grant of letters of administration to OF ADMINISTRATION be made for the assets or insolvent estates to be protected and preserved. ORDER Sec 13(1) requires LA to issue an order for sale on the FOR SALE estate so the expenses, debts, fees and duties cost during the process of sale are paid. Public auction and tender among the beneficiaries shall be the mediums to make the order of sale. The Act requires the sale price to be equal to the market value. Appeal against the decision by the LA is allowed under sec 29 and shall be made through a notice of appeal in Form K2 by the aggrieved person to the High Court. The duration to file the notice is 14 days after the pronouncement of decision.

NUR ALYA SYAFIQA BINTI MOHAMAD 256218 administration by corporation

Unlike the administration of small estates, the administration of estate by the Corporation is 4 governed under the Public Trust Corporation Act 1995 (PTCA). WHAT IS THE RELEVANT AGENCY? Sec 17 has recognized the establishment of Amanah Raya Berhad (ARB) as one of the administrative bodies and government-owned company that may administer estate upon claim by the deceased's heir. Besides vesting of property, the Act also set out rights and liabilities of the Amanah Raya Berhad (ARB). ADMINISTRATIVE ORDERS There are two administrative orders that may be issued by ARB Sec 17(1)- Letter of Declaration, value of assets is below RM 50,000. Sec 17(2)- Letter of Direction, value of assets is above RM 50,000 but below RM 600,000. Basically, ARB shall only involve movable assets that are below RM 60,000. The Act has expressly vested ARB with the duty to administer the deceased's assets. Figure 3 has shown the process of applying the Order in regards of the concerned estates.The value of the asset must be calculated without deducing the debts and shall exclude any value of deceased's any other estates. Furthermore, in the matter of application, Figure 3 shows that it shall be made directly to the ARB and not to the Court. A standard form shall be filled up together with any relevant documents like certificate of death, birth or marriage of concerned parties and proof of deceased's ownership. To add, the requirement of Faraid is shouldered by Muslims. Besides that, any testate or intestate cases may be personally represented by the ARB. Thus, such representation services offered by the solicitor or any trust companies are likely to be charged with fees.

THE DUTY OF THE CORPORATION As mentioned above, one of the roles vested in the 5 Corporation is estate administration. In depth, the Corporation shall conduct an investigation on the documents and the parties for status confirmation. It is necessary to ensure that there is no previous application on the estate. Hence, letter of administration shall be granted for ARB to declare, in writing, the administration of estate. The filing of the notice of declaration shall be made to the Registry. Upon satisfaction of the Corporation, the delivery of estate shall be made to the Petitioner. This article has mentioned that the rights of beneficiaries may be denied against hukum shariah upon the application of Sec 17(2) as it allows the withdrawal of all estates by one beneficiary. Other than that, the Article detected a drawback from this process due to the limited jurisdiction by ARB. This indication is seen as ARB is allowed to transfer the administration of estate to the Civil High Court due to the value of estates exceeding 2 million. THE DUTY AS PERSONAL REPRESENTATIVE Previously, I have briefly mentioned that ARB may offer services to personally represent in intestate or testate case. The probate of will or letter of administration may be granted by the Court to ARB upon application by ARB or any other persons as authorized under Sec 13. In order for the probate of will to be granted, it is necessary for the appointment of ARB as an executor of the deceased's estate to be initiated. Upon the appointment, Sec 11(2) vested the powers, duties, liabilities, rights and immunities, which are equivalent to a private person, to the Corporation. Note that the appointment of ARB as an executor shall not be declined by any persons in order to avoid the charged fees. Court in the case Pua Chui Har v Amanah Rakyat Berhad declined the application of plaintiff to set aside the appointment of defendant as an executor. The plaintiff intended to save the expenses as the service to administer the estate will be charged by the defendant. Court took into consideration the express intention of the deceased to appoint the defendant as his executor in the will.

UNDISTRIBUTED FUNDS Undistributed funds may be executed in the case where the 6 property is belonged to a disabled person. The lack of legal capacity to own or hold property by such property is taken into consideration. A trustee may be appointed by a personal representative to hold the property on behalf of minor beneficiary as authorized under the law. This article by Nor Azlina and Ahmad Shamsul has pointed out that there is no direct or express reference made by the law to unsound person but only to minor. The power of the personal representative to appoint trustees on behalf of the minor beneficiary can be seen in Sec 75 of the Probate and Administration Act 1959. The trustees may be a trust corporation or private individuals and shall not be exceeding four trustees. Specifically, Sec 86 of the Probate and Administration Act 1959 allows the undistributed funds to be passed to the Public Trust Corporation. The article has also highlighted that Amanah Raya Berhad is basically referred as Public Trust Corporation and incorporated under Companies Act 1965. Thus, the share and right of the minor beneficiary upon the estates may be held by ARB as a personal representative. The share and right shall be passed to the minor beneficiary when they reach the age of majority. This shall be equivalent to Sec 16 of SEDA where the procedure of hearing is provided, including the duty of the Land Administrator in issuing the distribution order. There are certain circumstances require a payable sum of money to be deposited by the Land Administrator to any person such as when the location of such person is unknown, when the payment of such money is refused by such person or when such person is lack of legal capacity. This shall includes a situation where the payment of such money is not practicable to such person.

7 Consequently, the Corporation shall be vested with the duty as a trustee upon such transfer of money. The transferred amount shall be held by the Corporation on behalf of the entitled person. The Corporation may require an identity, entitlement and legal capacity confirmation and a written claim by such person to pass the money. To add, Sec 20 has expressly described the term of undistributed fund and acknowledged the power of the Corporation. THE ADMINISTRATION OF UNDISTRIBUTED FUNDS In order for the undistributed fund to be administered, it shall be made accordance to Sec 19 of the Public Trust Corporation 1995. Even though there is only minor beneficiary that is expressly mentioned in the provision, the power of the Corporation may practically extends to any other cases as mentioned in the book titled \"Administration of Estates in Malaysia: Law and Procedure\" by Akmal Hidayah Halim. The author also mentioned that the power of the Corporation in the provision shall also be subjected to the Corporation itself, The Probate and Administration Act 1959 and the Small Estates (Distribution) Act 1955. How to administer undistributed funds :- The Corporation may practice its power and duty by making payment for the income and capital money of the asset, which value does not exceeds RM 20,000, that it holds as trustee. This is due to the reasonable consideration of maintenance, education or benefit of the minor beneficiary. Payments of capital money amounted to RM 20,000 may be made by the Corporation in case where the value of asset exceeds RM 40,000. The Act recognized parents or guardian as the receiver of such payment. The Corporation, however, has the discretion for the determination of any funds that are applicable for the same purposes or any person that shall provide for the minor beneficiary.

CONCLUSION 8 Through this writing, a discussion of two administrative bodies that are empowered for the administration of estates may be observed. Such administration bodies are the Land Office and the Corporation or may be known as Amanah Rakyat Berhad. The functions of these administrative bodies are basically similar as it strives to assist the people in estate matter. In depth, there are clear divisions between these two bodies in regards of jurisdictions and powers. Furthermore, the formality of the bodies may be differentiate as the Land Office deals with the Civil High Court for hearing of application meanwhile Amanah Rakyat Berhad deals independently as the law authorizes it for appointment of personal representative to the deceased's estate. Thus, any overlap of duties and powers of these bodies may be avoid upon the distinction. However, it happened otherwise as the public finds difficulty in approaching and bringing this matter to these bodies due to lack of knowledge. At the end of the writing, I am able to learn and understand in depth on how the administration estates by the Land Office and the Corporation may work. Prior to this, I have no knowledge about the existence of ARB, let alone its functions. This actually shall be seen as a challenge to execute such practice especially to the general public. This challenge may be due to the misconception of these administrative bodies. Looking into the causes, it is clearly arises from the lack of knowledge and ignorance of people. It is worsen as these people think that such bodies are irrelevant and unnecessary. Now that I have been enlighten, I object such misconceptions as these bodies are provided as helpful and necessary for the use of people especially the ones that seek assistance in estate matter. It can be seen on how easy for the applicant to get access to the letters of representations. In addition, the cost of service offered by these bodies would not be too expensive thus shall help people with financial difficulties. Aside from that, I do believe that the system of these bodies should be improved for better and easier access to the public. Lack of knowledge may be due to the lack of education mediums by the authorities. Thus, the improvement of the system may overcome the misconception of the public.

REFERENCES Md. Azmi, F., & Haji Mohammad, M. (2015). A Proposal For A Single Tribunal Of Estates Distribution In Malaysia. Jurnal Teknologi, 75(10). Drs, M., Ahmad, N., Kulliyah, I., Laws, Mohd, W., Ahmad, S., Helmi, M., Ahmad, S., Nuramani, S., & Manap, A. (2017). Administration Of Estates In Malaysia: Jurisdiction And Misconception. UUMJLS, 8, 183–196. http://uumjls.uum.edu.my/images/vol82017/h-183-196.pdf Mohd Noor, N. A. & Abd. Aziz, A. S. (2018). Administration of Estates in Malaysia: Stepping into The Shoes of Person Under Disability. International Journal of Law, Government and Communication, 3 (13), 174-181. Akmal Hidayah Halim. (2018). Administration of Estates in Malaysia: Law and Procedure (2nd ed.). Sweet & Maxwell. Public Trust Corporation Act 1995 Small Estates (Distribution) Act 1955