Obtaining probate or letters of administration is not the end of the process \u2014 it is the beginning. The grant of representation gives the executor or administrator the legal authority to deal with the deceased’s estate, but the work of actually administering that estate \u2014 identifying and collecting assets, paying debts, resolving disputes, and ultimately distributing what remains to the beneficiaries \u2014 can be a substantial undertaking that takes months or, in complex cases, years to complete.<\/p>\n\n\n\n
This article explains what estate administration involves in practice, the duties and obligations of the executor or administrator, and the common challenges that arise along the way.<\/p>\n\n\n\n
Estate administration in Sabah is governed by the Probate and Administration Ordinance<\/strong>, a Sabah law that has been declared federal but continues to apply in Sabah. The executor or administrator acts as the legal personal representative of the deceased and is subject to fiduciary duties \u2014 obligations of the highest good faith \u2014 in dealing with the estate. They must act in the interests of the estate and its beneficiaries, not in their own interests, and are personally liable for losses caused by a breach of those duties.<\/p>\n\n\n\n Where the estate includes land in Sabah, dealings with that land must comply with the Land Ordinance (Sabah Cap. 68)<\/strong>. Transfers of land to beneficiaries require proper documentation and registration with the relevant Land Office.<\/p>\n\n\n\n 1. Taking stock of the estate<\/strong><\/p>\n\n\n\n The first task of the executor or administrator is to identify and locate all of the deceased’s assets and liabilities. This involves:<\/p>\n\n\n\n A comprehensive inventory of assets and liabilities is the foundation of the administration. Without it, there is a risk that assets are missed, debts are overlooked, or the distribution is carried out on an inaccurate basis.<\/p>\n\n\n\n 2. Securing the assets<\/strong><\/p>\n\n\n\n While the administration is ongoing, the executor or administrator is responsible for protecting and preserving the estate’s assets. This may involve:<\/p>\n\n\n\n 3. Notifying creditors and paying debts<\/strong><\/p>\n\n\n\n Before distributing the estate to beneficiaries, the executor or administrator must pay all valid debts and liabilities of the deceased. This includes outstanding loans, utility bills, tax liabilities, and any other obligations.<\/p>\n\n\n\n It is good practice \u2014 and in some cases legally prudent \u2014 to place a notice to creditors in a newspaper or gazette, inviting creditors to submit their claims within a specified period. This helps protect the executor or administrator from personal liability if unknown creditors emerge after the estate has been distributed.<\/p>\n\n\n\n Where the estate is insolvent \u2014 where debts exceed assets \u2014 the administration must follow insolvency principles, with creditors paid in the prescribed order of priority before any distribution to beneficiaries.<\/p>\n\n\n\n 4. Dealing with specific assets<\/strong><\/p>\n\n\n\n Different types of assets require different handling:<\/p>\n\n\n\n Bank accounts<\/em> \u2014 Banks will freeze accounts upon notification of death. The executor or administrator must produce the grant of representation to access the accounts and collect the funds. Joint accounts with a right of survivorship pass automatically to the surviving account holder and do not form part of the estate.<\/p>\n\n\n\n Real property<\/em> \u2014 Transferring land registered under the Land Ordinance (Sabah Cap. 68)<\/strong> to beneficiaries requires the preparation of transfer documents and registration at the Land Office. Where the property is subject to a charge (mortgage), the financial institution’s involvement will be required.<\/p>\n\n\n\n EPF savings<\/em> \u2014 EPF savings are distributed to nominated beneficiaries directly by EPF, outside the estate administration process. Where there is no valid nomination, EPF pays the savings to the executor or administrator for distribution as part of the estate.<\/p>\n\n\n\n Insurance policies<\/em> \u2014 Life insurance proceeds are paid to the named beneficiary directly and do not form part of the estate, unless the policy is assigned to the estate or there is no named beneficiary.<\/p>\n\n\n\n Shares and investments<\/em> \u2014 Shares held in the deceased’s name must be transferred through the relevant share registry or stockbroker upon production of the grant of representation.<\/p>\n\n\n\n Business interests<\/em> \u2014 Where the deceased had an interest in a partnership or a private company, the applicable partnership agreement or shareholders’ agreement will govern what happens to that interest. This can be complex and may require negotiation with surviving partners or shareholders.<\/p>\n\n\n\n 5. Filing taxes<\/strong><\/p>\n\n\n\n The executor or administrator is responsible for ensuring that all tax obligations of the deceased and the estate are met. Malaysia does not currently impose estate duty or inheritance tax, but income tax returns for the year of death and, where the estate generates income during administration, for the administration period itself, must be filed with the Inland Revenue Board (LHDN).<\/p>\n\n\n\n 6. Preparing the estate accounts<\/strong><\/p>\n\n\n\n Before distributing the estate, the executor or administrator should prepare estate accounts \u2014 a clear record of all assets collected, debts paid, expenses incurred, and the balance available for distribution. Beneficiaries are entitled to see the accounts, and providing transparent accounts helps prevent disputes about how the estate has been handled.<\/p>\n\n\n\n 7. Distributing the estate<\/strong><\/p>\n\n\n\n Once all debts, liabilities, taxes, and administration expenses have been paid, the remainder of the estate \u2014 the residuary estate \u2014 is distributed to the beneficiaries in accordance with the will or, where there is no will, in accordance with the Intestate Succession Ordinance 1960 (Sabah No. 1 of 1960)<\/strong>.<\/p>\n\n\n\n Distribution should be properly documented. Beneficiaries should provide receipts for what they receive, and the executor or administrator should retain records of all transactions for a period after the administration is complete.<\/p>\n\n\n\n The personal representative of a deceased person owes fiduciary duties to the estate and its beneficiaries. The most important of these include:<\/p>\n\n\n\n Duty to act in the interests of the estate<\/strong> \u2014 The executor or administrator must not use their position for personal gain at the expense of the estate. Self-dealing \u2014 transactions in which the personal representative benefits personally \u2014 is generally prohibited without the informed consent of all beneficiaries or court approval.<\/p>\n\n\n\n Duty to act impartially<\/strong> \u2014 Where there are multiple beneficiaries with different interests \u2014 for example, a life tenant and a remainderman \u2014 the personal representative must act even-handedly and not favour one over the other.<\/p>\n\n\n\n Duty to act with reasonable care and diligence<\/strong> \u2014 The personal representative must manage the estate competently. They are not required to be infallible, but they must exercise the care that a reasonable person would take in managing their own affairs.<\/p>\n\n\n\n Duty to account<\/strong> \u2014 The personal representative must keep proper records and be prepared to account to beneficiaries for all dealings with the estate.<\/p>\n\n\n\n Estate administration does not always proceed smoothly. Common problems include:<\/p>\n\n\n\n Executor or administrator misconduct<\/strong> \u2014 Where a personal representative misappropriates estate funds, fails to administer the estate within a reasonable time, or otherwise breaches their duties, beneficiaries may apply to the court to remove and replace them, and to recover losses caused by the breach.<\/p>\n\n\n\n Beneficiary disputes<\/strong> \u2014 Disagreements among beneficiaries about the distribution of the estate, the conduct of the administration, or the interpretation of the will can delay administration and, in some cases, require court resolution.<\/p>\n\n\n\n Missing beneficiaries<\/strong> \u2014 Where a beneficiary cannot be located, the executor or administrator cannot simply ignore their share. Legal advice on how to deal with missing beneficiaries \u2014 which may involve advertising for the beneficiary or paying the share into court \u2014 is necessary.<\/p>\n\n\n\n Unexpected claims<\/strong> \u2014 Claims against the estate by creditors, former business partners, or others can arise after the administration has begun and must be properly investigated and, where valid, paid.<\/p>\n\n\n\n Being appointed as executor or administrator is an honour and a responsibility. It is also, for most people, an unfamiliar and time-consuming task that arrives at an already difficult time. Understanding what is involved \u2014 and obtaining legal assistance early \u2014 helps ensure that the estate is administered properly, that the beneficiaries receive what they are entitled to, and that the personal representative is protected from personal liability.<\/p>\n\n\n\n This article is intended for general informational purposes only and does not constitute legal advice. Estate administration involves complex legal, financial, and practical considerations, and individual circumstances vary considerably. Readers are encouraged to seek qualified legal advice specific to their situation. Nothing in this article is intended as advertising or solicitation of legal services, in compliance with the Sabah Advocates Ordinance.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Obtaining probate or letters of administration is not the end of the process \u2014 it is the beginning. The grant of representation gives the executor or administrator the legal authority to deal with the deceased’s estate, but the work of actually administering that estate \u2014 identifying and collecting assets, paying debts, resolving disputes, and ultimately […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-216","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/posts\/216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/comments?post=216"}],"version-history":[{"count":2,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/posts\/216\/revisions"}],"predecessor-version":[{"id":247,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/posts\/216\/revisions\/247"}],"wp:attachment":[{"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/media?parent=216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/categories?post=216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usmanandpartners.com\/blog\/wp-json\/wp\/v2\/tags?post=216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\n\n\nThe Steps of Estate Administration<\/h2>\n\n\n\n
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\n\n\n\nThe Executor’s or Administrator’s Duties<\/h2>\n\n\n\n
\n\n\n\nWhen Things Go Wrong<\/h2>\n\n\n\n
\n\n\n\nActing as Executor or Administrator: What to Expect<\/h2>\n\n\n\n
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