Selling a deceased person’s property may seem like a daunting process but once you understand the processes involved, it isn’t as scary as you imagine it to be. Let us break it down into bite-sized information for you.
Inheriting the Property
Before you can sell the deceased’s property, you will need to inherit the property first. Even if you have been named as the beneficiary in the will or you are beneficiary (or one of the beneficiaries), you will still need to get the necessary documents that allows you to deal with the property as you wish – whether to sell it, or keep it.
In order to inherit the property, you will first need to obtain a Grant of Probate (if deceased died leaving a Will) or, and Letters of Administration (if deceased died without leaving a Will). The type of order you need to apply for depends on whether the deceased left a will behind or not. The application for Grant of Probate must be made in the High Court. The application for Letter of Administration can be made in the High Court or land office (Small Estate) or with Amanah Raya Berhad.
Is There a Will?
If there is a Will left behind by the deceased, the rest of the procedures are quite straightforward. Firstly, with a Will in hand, the person(s) named as trustee(s)/executor(s) will need to apply for a Grant of Probate (GP) from the High Court.
It takes approximately 3-6 months to obtain a GP from the High Court. In order to apply for this grant, you will need to prepare a few documents such as:
- Death certificate
- Executor’s identity card
- Beneficiaries identity card
- Original copy of the Will
- All land titles and evidences of property ownership
- Bank details of the deceased
- Paperwork relating to all debts, liabilities, and other assets
If the executor that was named has passed away before the deceased, or no one has been named as executor in the Will, then the person who intends to be the administrator of the Will may apply for a Letter of Administration (LA) from the High Court AFTER the Will has been annexed by the High Court.
To apply for the Grant of Probate you should engage a lawyer to prepare the necessary documents and to attend High Court.
Depending on the contents of the Will and wishes of the deceased (testator), the property may be disposed, sold, transferred or dealt with after the Grant of Probate has been obtained.
What Happens if There is No Will Left Behind?
If the deceased did not leave a Will at all, then the next of kin who intends to be the administrator may apply for the Letters of Administration. However, not every applicant needs to get the LA from court; it all depends on the total value of the estate.
If the gross value of the estate – both wholly or partially immovable property such as land or house worth more than RM2,000,000, administrators will need to get their LA from the High Court. The Court will then give the administration rights to one or more persons who have interest in the estate, with the exception of insolvency or other special circ*mstances.
You should engage a lawyer to prepare the necessary documents and to attend High Court for application for Letter of Administration.
If the estate (consist of at least 1 immovable property) is a small estate (not exceeding RM2,000,000 in total value at time of application), the next of kin can head to the Small Estate Distribution Unit (Harta Pesaka Kecil) of the Department of the Director-General of Lands and Mines (JKPTG) or the Land Office to apply for the Letters of Administration.
Application to the land office is a D.I.Y (Do it Yourself) method. Lawyers are not required and you can make the application totally on your own. This is the cheapest mode and the cost will be minimal.
Alternative method of applying and obtaining a Letter of Administration is through the Amanah Raya Berhad.
Provided that all documents are in order and all beneficiaries are in consensus, the Letter of Administration can be obtained within 6 months to 1 year.
Once the Letter of Administration has been obtained the person named as Administrator(s) may deal with the property such as enter into tenancy, collect rental and other administrative tasks, however the LA itself does not authorise the administrator(s) to dispose, sell or transfer the properties.
To sell, dispose or to transfer the properties the Administrators will need to make a separate application for distribution order that will allow the Administrators to sell, dispose and transfer the properties. This application will take you another 3 to 6 months.
The Difference Between Executor and Administrator
There isn’t really a very big difference between being an Executor and an Administrator. The main thing that sets them apart is – executors are appointed in the Will and have full authority to handle the estate from the time of death, whereas administrators need to be appointed by the High Court and get his/her authority from the land office or Amanah Raya Bhd after being issued the Letters of Administration (LA).
Duties of The Executor and Administrator
So, what happens after being named executor or administrator? The next step would be to manage the deceased assets. As an executor, your will need to:
- Collect all the assets that belong to the deceased.
- Pay off all the debts and liabilities owed by the deceased.
- Distribute the assets according to the will left behind by the deceased (Administrator can only do so after obtaining the Order to Distribute).
Since being an administrator means there is no Will left behind by the deceased, you do not distribute according to the Will. However, you will still need to collect the assets and pay off the debts, and only after that can you distribute the assets in accordance with the Distribution Act 1958.
The law in Distribution Act 1958 provides provision and list of the next of kin (beneficiaries) that will be entitled and the portion of entitlement to the estate of the deceased.
What is The Distribution Act 1958?
In simpler terms, this is an Act in Malaysia related to the law of distribution of estates to the deceased’s next-of-kin, should the deceased not leave a Will behind. Different surviving beneficiaries will receive different proportions of the deceased estate under this Act.
| Beneficiaries | Proportion of Distribution |
| Spouse and children | Spouse 1/3 Children 2/3 |
| Parents, spouse and children | Parents 1/4 Spouse 1/4 Children 1/2 |
| Children only | To be divided equally among all the surviving children |
Note : This list is not complete. Please refer to the Distribution Act 1958 to see the complete list.
Who Can Sell The Property? (only in relation to Real Property (Immovable)
Under Grant of Probate (Deceased died leaving a Will)
Upon obtaining the Grant of Probate, the Executor under the Will may deal, sell, dispose or transfer the property of the deceased in accordance with the wishes stated in the Will. The Executor will have the power to enter into agreement and sign documents on behalf of the estate of the deceased. The Executor is the trustee of the estate and all monies received and collected shall be for the sole benefit of the beneficiaries named in the Will.
If the Will states the wish of the deceased to transfer certain property to certain beneficiary, the Executor may then proceed to do so.
If all the beneficiaries are of the age of majority (18 years old and above), the beneficiaries may mutually agree that instead of accepting the transfer of the property, instruct the Executor to dispose or sell the property. In this situation the money from the sale of the property will be distributed to the beneficiaries in accordance with the Will or as may be instructed by the beneficiaries.
However, if the Will states that the property to be given to a minor beneficiary (below 18 years old), there isno option to the Executor and the property will be held on trust by the Executor until the beneficiary reaches the age of majority. Meanwhile all income from the property (rental etc) shall be kept and used solely for the beneficiary.
A word of advise, always consult a lawyer for advise on drafting a Will to make sure the Will is drafted in accordance with your specific requirements, circ*mstances and wishes.
Under Letter of Administration (Deceased dies without leaving a Will)
As said earlier the Administrator will need to apply for a Distribution Order before he can transfer the property to the beneficiary(ies) under the Distribution Act 1958. When the Distribution Order is obtained the Administrator may proceed to transfer the property to the beneficiary(ies) in proportion as provided under the Distribution Act 1958.
Provided that all beneficiaries are of the age of majority, the beneficiaries may mutually agree to instruct the Administrator to sell the property to a 3rd party.
To do so, the Administrator will need to apply and obtain an Order for Sale from the High Court.
The application may take about 3 to 6 months and lawyers will need to be engaged.
Tax & Stamp Duty
There is no inheritance tax in Malaysia at the moment. Rest assured you will not be taxed for inheriting property left by your parents.
In the usual transaction, transfer of property will be subject to payment of ad valorem stamp duty which will be calculated in accordance with the value of the property. However, for transfer under inheritance (transfer from the deceased estate to beneficiaries) there is no ad valorem stamp duty and only nominal stamp fee of RM10.00 will be imposed.
There is also no Real Property Gain Tax (RPGT) to be paid for transfer under inheritance (transfer from the deceased estate to beneficiaries).
However, if the beneficiaries should instruct the Executor or Administrator to sell the property to a 3rd party, the 3rd party buyer will be levied with the full ad valorem stamp duty. And the deceased estate will need to pay RPGT in accordance with the Real Property Gains Tax Act 1976 (unless exempted or waived).
If there is no exemption or waiver of the RPGT, the date of death of the deceased shall be considered the date the beneficiaries acquired the property.
Seeking Assistance
With all that said, you should seriously think about hiring a lawyer to outline all the necessary procedures involved and to help you sort and handle the massive amount of paperwork that is required. Even though you will have to fork out a substantial amount of money for that assistance, at least it will guarantee lesser inconveniences and hindrances, to expedite the sale of the property.
The statement and information in the articles are the opinion of the writer and meant only as a guide. Any property purchase, rental or lease involve many legal issues and other complication depending on the individual facts and circ*mstances. Readers and Users are strongly advised to seek professional advise including from qualified and competent lawyers, bankers and/or real estate agent to verify the information and the statement before embarking on any purchase, rent or lease of any property. To the fullest extent permitted by law, we exclude and disclaim liability for any losses and damages of whatever nature and howsoever cause and arising including without limitation, any direct, indirect, general, special, punitive, incidental or consequential.
Well, diving into the intricacies of selling a deceased person's property requires a solid understanding of legal processes and documentation. Allow me to demonstrate my expertise by breaking down the key concepts in the article.
1. Inheriting the Property:
- Grant of Probate (if there's a Will) or Letters of Administration (if no Will) is needed.
- Application location depends on the presence of a Will.
2. Is There a Will?
- Procedures for handling a property with a Will are straightforward.
- Necessary documents include death certificate, executor's ID, beneficiaries' IDs, original Will, property ownership evidence, bank details, and paperwork related to debts and assets.
3. No Will Left Behind:
- Next of kin can apply for Letters of Administration based on estate value.
- Large estate (over RM2,000,000) requires High Court application, small estate application is possible at the Land Office.
- Engaging a lawyer may speed up the process.
4. Executor vs. Administrator:
- Executors are appointed in the Will with immediate authority.
- Administrators are appointed by the High Court after obtaining Letters of Administration.
5. Duties of Executor and Administrator:
- Collect assets, pay debts, and distribute according to the Will for executors.
- Administrators follow the Distribution Act 1958 for asset distribution.
6. Distribution Act 1958:
- Defines the distribution of the deceased's estate if no Will is present.
- Proportions for spouses, children, parents, and others are specified.
7. Selling the Property:
- Executors can sell, dispose, or transfer based on the Will.
- Administrators require a separate application for a distribution order to sell or transfer.
8. Tax & Stamp Duty:
- No inheritance tax in Malaysia.
- Ad valorem stamp duty for property transfer in normal transactions, but a nominal stamp fee for inheritance transfer.
- No Real Property Gain Tax (RPGT) for inheritance transfer.
9. Seeking Assistance:
- Hiring a lawyer is recommended to navigate the legal processes and paperwork efficiently.
So, if you're navigating this process, remember, understanding the legalities is key, and professional assistance can be invaluable.
