LEGAL GUIDE ON LETTER OF ADMINISTRATION AND GRANT OF PROBATE
- What is Letter of Administration (LA)?
Letter of Administration or commonly known as LA is a legal document issued by either Land Administrator or High Court of Malaya to administer the estate(s) of a deceased person who has not left any valid will. LA is needed especially when the deceased person has not named anyone in their will to be the executor or the executor refused and/ or unable to act.
- Why is LA needed?
The purpose is to give legal authority to the person appointed as administrator to manage and distribute the property and/ or assets of the deceased person according to the laws of intestacy. The appointed administrator is responsible to identify and valueing the deceased’s assets, settle any outstanding debts or taxes and finally distribute the remaining balances to the available beneficiaries according to the law of intestacy.
- How to apply for Letter of Administration?
An administrator can only be appointed upon receiving approval from all of the available and/ or existing beneficiaries. Application for LA can be made through two (2) ways based on the value of the deceased’s estate.
- for estate value above RM2 million;
Application for Letter of Administration must be made at High Court of Malaya. The application usually made by filing Originating Summon, affidavit in support of the application together with supporting documents such as death certificate, list of beneficiaries, inventory of the deceased’s assets and liabilities.
The Court then will review the application and if approved, the Court will issue the Letter of Administration authorising a person to be an administrator to manage the estate of the deceased. The appointed administrator will legally have the rights to manage the estate, including distribution of remaining assets according to Islamic inheritance laws (Faraid) for Muslim estates or intestate succession.
- for estate value below RM2 million;
Application for Letter of Administration must be made to the Land Administrator or District Officer. They will then appoint an administrator and obtain the distribution order.
- Is administrator allowed to dispose the deceased’s estate?
The simple answer is, yes. However, it must be noted that an Administrator is not entitled to dispose estate of the deceased without obtaining approval from the court or the Land Administrator or District Officer.
For example, the administrator needs to make an application for Order for Sale (OFS) before they can proceed to sell any estate of the deceased person. The said application needs to be done because a duly appointed administrator does not have the capacity to do any sale and purchase transaction as they are not the rightful owner of the said property/ estate.
For an application under OFS, we are required to prove that there is Sale and Purchase Agreement. If none, another document such as Offer to Purchase is sufficient to prove that there is sale and purchase transaction. The administrator is required to follow the court procedure and once the OFS obtained, then only they can proceed with sale and purchase transactions.
In addition, administrator is obliged to dispose the estate of the deceased in a proper manner and act in the best interest for the beneficiaries.
- What is Grant of Probate?
Grant of Probate is a document issued by the High Courts that authorise the validity of the deceased person’s will and allow the named executor in the will to administer the deceased’s estate. The appointed executor carries the same responsibilities as the administrator where they are requires to manage the deceased’s estates, settling taxes and debts including distribution of the assets to the beneficiaries.
- When is a Grant of Probate required?
Letter of Administrator is required when a person passed away without leaving a valid will, meanwhile, Grant of Probate is required when the deceased has left a valid will. Before administering the estate according to the will, the executor must apply for Grant of Probate. However, if the named executor refused to act and/or unable to perform their duties, the Court have the power to grant a Letter of Administration with a will annexed and appoint an administrator according to stipulated provisions under the Probate and Administration Act 1959.
- How to apply for Probate?
There are several steps need to be followed when applying for probate. Among others are as follows:
- Identify the necessary documents.
It includes the original will, the deceased’s death certificate, lists of the deceased’s assets and liabilities.
- Identify the executor
The deceased that left a will usually named the executor to administer their estate. So, it is important to make sure the named executor is able to perform their responsibilities. If none executor named or the named executor unable and/or unwilling to act, an administrator may be appointed to manage the deceased’s estates.
- Preparation for probate application
This stage is when you will need a lawyer to prepare for the application where usually several important documents need to be prepared includes petition for Grant of Probate, affidavits verifying the case, etc.
- Submit the application
The application for both Muslim or non-Muslim must be submitted to the High Court of Malaya where the deceased person owned any estate or resided.
- Attend hearing
The court may schedule a hearing where the executor or administrator may be needed to make clarification regarding the application.
- Obtain the Grant of Probate
If no disputes and/ or the court satisfies with the validity of the will and qualifications of the executor, the court then will issue the Grant of Probate. And in case the will is not valid, the court will issue a Letter of Administration).
- Estate administrations
Once the executor obtained Grant of Probate or Letter of Administration, the appointed executor or administrator must fulfil their obligations to manage the estates, paying taxes and debts and distribute the assets to the beneficiaries according to the will or intestate succession laws.
- What is contentious and non-contentious probate?
Contentious probate is when there are disputes or any objections towards the deceased’s person will. There are few circumstances in where the disputes may arise, such as:
- Question regarding validity of the will
- The deceased’s state of mind when the will was made
- The will was not executed properly
- When there is more than one will
- When the beneficiaries contested the distribution of the assets.
Any contentious probate can only be granted after a hearing, where the court will examine the evidence and make a ruling on the validity of the will and the assets distribution. In this situation, it is important for the executor to appoint a lawyer to handle and represent them in court. The court then will examine the evidence gathered and subsequently make a ruling for the validity of the will.
Contrary to the contentious probate, non-contentious is when the process obtaining validity of the will are rather easy and straightforward as it does not involve any dispute. The application for grant of probate can be made normally and once it is granted, the executor is responsible to manage and distribute the assets.
Below are the several main differences between letter of administration and grant of probate;
| Letter of Administration (LA) | Grant of Probate |
| The deceased does not leave a will | The deceased left a will |
| Anyone can apply to be an administrator (such as siblings, children, creditors) | An executor is appointed by the deceased during their lifetime |
| The appointed Administrator need to apply for distribution order. For muslims, distribution must according to faraid law. For non-muslims, distribution must according to the Distribution Act. | Distribution order is not needed as the estate is distributed according to what the deceased’s wishes. |
