The heartache of intestacy (people dying without Wills)

Not leaving a Will means leaving a heartache for a bereaving family, especially one that is unaware of the legal quicksand.

Can you imagine a scenario such as this: a man died without having written a Will. All he owned were assets of not more than RM600,000 including a house.

His non-working widowed wife thought that obtaining a distribution order from the Land Office was the end of the matter but no, she was told that as her three children were still below 18 years old, two-thirds of her late husband’s EPF money would be transferred to the Amanah Raya Bhd (ARB) as the public trustee for them.

So she went to the local ARB office to enquire after the amount that she wanted withdrawn for her three children’s expenses. But there wasn’t any good news. According to the ARB, piano lessons, swimming lessons, art classes, ballet dance classes and other similar activities were considered as “luxuries” to have. No, no no. The ARB would not allow the children’s money to be used for these activities even though the kids had been attending them before her husband died.

She was shattered. How can it be? Not only was it already hard for the children to cope with life without their father, their lifestyle and activities now risk being drastically changed. How much more tragic could any child’s life become?

As a mother, could she bear to stop her children from attending activities that they have enjoyed and acquired skills from? She used her one-third entitlement which was for her personal benefit under the law, for the welfare of her three minor children. Most probably, she may exhaust her entitlement by the time her three children reached adulthood. Who could she rely on if her children were not filial to her?

The above is only a scenario but so typically, it highlights some of the many hardships that we may put our families through if we die without a Will.

In law, there is the Small Estates (Distribution) Act 1955 (Small Estates Act) that allows the District Land Administrator (DLA) to act in situations where a person dies without a Will and leaves an estate consisting wholly or partly of immovable property and which does not exceed RM600,000 (small estate). This Act sounds very compassionate and socially responsible but in reality, it is full of pitfalls for the affected families.

As the ARB is also a government agency, it is a common practice of the DLA to appoint ARB as the trustee for beneficiaries who are minors. Further, and this is also a very important point to note, no lawyer is entitled to appear on behalf of any party in respect of a small estate except with the permission of the DLA. Hence, lay persons are expected to deal with the relevant authorities all by themselves.

In 2008, perhaps with an eye on inflation, the amount of RM600,000 under the Small Estates Act was amended to RM2 million. According to the official portal of the Department of Director-General of Lands and Mines (Federal), this amendment is already effective, meaning that many of us now falls under the above category. Ironically enough, with this amended definition, even the properties of some deceased millionaires can now even be classified as “small estates” and thus affected.

In any event, when a person dies, his property is known as his estate and his children are his “issue.” If the person dies intestate (without a Will), Section 6 of the Distribution Act 1958 (DA) provides distribution as such:

For example, if a man dies intestate, leaving behind both parents, spouse and three children and two houses, both houses will bear six people’s names in each of the title deeds. Can you imagine the inconveniences to all six of them and the disputes that may arise in the event of disagreement in dealing with the two houses?

If the man had died leaving no parent, spouse and issue, his whole estate will go to the following persons in order of priority:

(a) brothers and sisters
(b) grandparents
(c) uncles and aunts
(d) great grandparents
(e) great grand uncles and grand aunts
(f) the government.

For the purposes of the DA, the word “child” means a legitimate child and where the deceased has more than one lawful wife, “child” includes a child by such wife, but does not include an adopted child unless the child is adopted under the Adoption Act 1952. Similarly, the word “parent” means the natural mother or father of a child or the lawful mother or father of a child under the Adoption Act 1952. As for divorced spouses, they remain surviving spouses until the divorce order is made absolute.

So essentially, what can we do if we have assets below RM2 million but we do not wish them to be classified under the Small Estates (Distribution) Act and falling under the control of the District Land Administrator with all the heartache and problems coming with it? One answer is to avoid intestacy and have your Will written as soon as possible.

Apart from avoiding the above problems, making a Will has other advantages: we select our beneficiaries, their shares and entitlement, and this will minimise disputes among them. Further, our named executor in the Will can directly petition the Court for a grant of Probate. Generally, the steps involved in obtaining the Probate are less cumbersome compared with the situation if one dies intestate and family members have to petition for the grant of Letters of Administration.

Every Will is unique because it reflects our personal intention and direction of how we would like our assets to be managed and distributed. There is no single Will format that will satisfy everybody. Traditionally, we engage a lawyer to prepare our Will. People still do but since 1996, there are alternatives. Professional Will-writing companies such as Rockwills Corporation provide specialist estate-planning services in this area to non-Muslims.

For more details or consultation in Penang, southern Kedah or northern Perak, please do contact this writer here.