Probate & Administration : 5 things you need to know about Small Estate Distribution Act

Section 8 (1) of SEDA states:

Petition for distribution.
8.(1) Where any person has died intestate leaving a small estate, any person claiming to be interested in the estate as a beneficiary, or a creditor, or a purchaser, or in the circumstances mentioned in subsection 18(1), the penghulu or a Settlement Officer of the district or of the locality in which any land of which the deceased was the proprietor is situated, or the *Corporation, may lodge with the Land Administrator at any district wherever the immovable property comprised in the estate is situated a petition, in the prescribed form, for the distribution of the estate.

Properties with a value of not more than RM 2million fall under the ‘small estate’ category in Malaysia. Section 3 (2) of SEDA defines small estates as follows:

Application of Part and definition of small estate.
(2) For the purposes of this Act, a small estate means 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.

In ascertaining the value of the property, the petitioner may conduct a survey on the market rate of the property before submitting the petition at the land office. Subsequently, the District Land Administrator at the land office would assess the value of the property upon receiving the petition. Section 3(3) of SEDA provides:

(3) For the purposes of this section, the value of the property comprised in an estate shall be deemed to be its value at the date of the filing of a petition for probate or letters of administration or lodging of a petition for distribution under this Act in respect of the estate or, if more than one such petition has been filed or lodged in respect of the same estate, at the date of the filing or lodging of the earliest petition.

Section 31 (1) of SEDA provides:

Advocates
31.(1) No advocate shall be entitled to appear on behalf of any party in any proceedings before the Land Administrator under this Act except with the permission of the Land Administrator, who may grant or withhold such permission in each case as he thinks fit.

The applicant is required to file a petition for a grant of LA personally with the relevant land office. A copy of the following documents must also be filed at the same time:

1. a copy of Form A as prescribed under the Small Estate (Distribution) Regulations.
2. the deceased’s death certificate.
3. the deceased’s marriage certificate (if any).
4. the identity card and birth certificates of each surviving heir.
5. List of deceased’s assets, such as share certificates, savings accounts book, bank statement, motor vehicle registration card, EPF statement.
6. a certified true copy of the land title or an official title search from the land office.
7. the current quit rent and assessment receipts.

In most cases, a Hearing will be fixed before the Land Administrator within three months from the filing of the petition. The applicant and the other surviving heirs will be required to attend the Hearing. However, any parties who are unable to attend the Hearing may submit a letter of consent in Form DDA to the land office, specifying his/her wishes as to the distribution of the estate.

At the Hearing, the applicant is required to bring along all original copies of relevant documents filed in Form A. The Land Administrator will inquire into all matters and once satisfied, allow the grant for LA to the applicant and to grant an order for distribution of the estate. A fee for the issuance of the grant of LA is payable to the Land Office following a rate prescribed according to the value of the property.

In the event that the Land Administrator is dissatisfied at the Hearing and/or the cause papers are not in order, the applicant will be ordered to remedy the necessary defects and a subsequent Hearing may be fixed to hear the matter.

Essentially, the Land Administrator in granting the distribution order would distribute the estate according to the Distribution Act 1958. For the Muslims, the distribution will be done according to the Faraid law. In the event the surviving heirs have agreed to distribute the estate according to certain arrangements, the Land Administrator may grant an order according to the consensus.

Effectively, this option was introduced to ease the public in distributing the estate efficiently. To wrap things up, it is worth exploring this option of obtaining a Grant of LA by way of a small estate petition as it is not only cost and time saving but also easily accessible by most citizens of Malaysia.