"There is a Will. Why is the Estate still frozen?"

A father prepares a will naming his eldest daughter as executor. The will clearly states how his house, savings and investments are to be distributed among his children.

After he passes away, the family brings the will to the bank.

The bank refuses to release the money.

They then approach the Land Office to transfer the house according to the will. Once again, they are informed that further documents are required.

The children are confused.

“Why can’t we follow the will? Isn’t that the purpose of having one?”

A will is an important estate-planning document. However, it does not by itself complete the administration or transfer ownership of the deceased’s assets.

1. A will records the deceased’s wishes. It is not a transfer document

A properly prepared will may identify the beneficiaries, appoint an executor and provide instructions on how the estate should be administered.

It does not automatically change the registered ownership of a house. It also does not immediately give beneficiaries the right to withdraw money from the deceased’s bank accounts.

After death, the will must still be proved and the estate must be properly administered.

For a non-Muslim estate, the named executor will ordinarily apply to the High Court for a Grant of Probate. Under the Probate and Administration Act 1959, probate refers to a grant under the seal of the Court authorising the executor named in the will to administer the estate.

The grant provides banks, the Land Office, financial institutions and other parties with formal confirmation of the executor’s authority.

Until the necessary grant is obtained, those institutions may not be prepared to release or transfer the deceased’s assets.

2. What does the Grant of Probate do?

The Grant of Probate confirms that the Court has recognised the will for the purpose of administration and that the person named in the grant is authorised to act as executor.

The executor may then proceed to collect and administer the estate, subject to the terms of the will and the law.

Depending on the assets involved, the executor may need to:-

• close or operate the deceased’s estate accounts;

• obtain information from banks and financial institutions;

• collect money owed to the deceased;

• deal with shares and investments;

• register the executor as the personal representative of landed property;

• redeem an outstanding housing loan;

• sell property where permitted or necessary;

• settle the deceased’s debts and administration expenses; and

• distribute the remaining assets to the beneficiaries.

Probate therefore does not replace the will. It enables the executor to implement it.

3. Does obtaining probate mean the beneficiaries will receive everything immediately?

Not necessarily.

The executor must first identify the full extent of the estate. This includes both assets and liabilities.

The assets may include property, bank accounts, vehicles, investments, shares in a company, business interests, money owed to the deceased and personal belongings of value.

The liabilities may include housing loans, personal financing, credit-card balances, taxes, maintenance charges, legal obligations and administration expenses.

Under the Probate and Administration Act 1959, the deceased’s property is available for the payment of debts, and the personal representative has duties in administering those assets.

This means the executor cannot simply distribute the money immediately because the beneficiaries are requesting it.

The executor must make reasonable inquiries, preserve the estate, settle liabilities in the proper manner and ensure that the proposed distribution is consistent with the will and the law.

If an executor distributes the estate prematurely and a valid debt later appears, the executor may face personal difficulty in recovering the money from the beneficiaries.

4. “But the will gives the house specifically to me.”

A gift of a house under a will does not mean that the beneficiary immediately becomes its registered owner upon the testator’s death.

Several matters may still need to be addressed.

The title may remain subject to a bank charge. There may be an outstanding housing loan, a private caveat, restrictions in interest, unpaid quit rent or maintenance charges.

The property may also be under a master title, involved in an incomplete transaction or jointly owned with another person.

Before the transfer can be completed, the executor may need to obtain the grant, register the transmission of the property and execute the necessary transfer documents.

If the property is still financed, the beneficiary may need to settle or refinance the outstanding facility. The bank’s rights over the property do not disappear merely because the borrower has passed away.

The will determines the intended recipient. It does not eliminate the conveyancing, financing and registration steps required to place the property legally in that person’s name.

5. What if the estate does not have enough cash to pay its debts?

A person may leave behind valuable assets but very little available cash.

For example, the estate may consist mainly of a house valued at RM800,000, while also carrying an outstanding loan, credit-card debt and administration expenses.

The will may state that the house is to be given to one child. However, if there are insufficient funds elsewhere in the estate, the executor must consider how the debts and expenses are to be settled.

Depending on the will, the nature of the liabilities and the available assets, it may become necessary to sell or refinance an asset.

A beneficiary who wishes to retain the house may need to provide funds to settle the relevant liabilities or arrange suitable financing.

Estate planning should therefore consider liquidity, not merely the total value of the assets.

Owning several properties does not necessarily mean that the estate will have enough cash to complete its administration smoothly.

6. What if the executor refuses or is unable to act?

Naming an executor is important, but the chosen person may not always be available when the time comes.

The executor may have passed away, lost mental capacity, moved overseas or decided that he or she is unable to undertake the responsibility.

An executor may also formally renounce the right to obtain probate.

Where no executor is appointed, no executor survives, or the appointed executor is unable or unwilling to act, the Court may grant Letters of Administration with the Will Annexed to another suitable person.

The will does not necessarily become invalid merely because the original executor cannot act. However, the administration may become more complicated and additional documents may be required.

For this reason, a will should preferably appoint an alternative executor.

The person preparing the will should also consider whether the proposed executor is willing, capable and likely to remain available.

7. What if the original will cannot be found?

The location of the original will matters.

A family may know that the deceased signed a will, but only find a photocopy or an unsigned draft after searching through the deceased’s belongings.

Although the law provides procedures for certain cases involving lost or destroyed wills, proving the existence and contents of such a will may be considerably more difficult.

The family may need evidence explaining:-

• when and how the will was signed;

• who witnessed it;

• where the original was kept;

• when it was last seen; and

• why it can no longer be produced.

A person preparing a will should therefore ensure that the original is stored securely and that the executor knows where it can be located.

Keeping the will so secret that no one can find it may defeat the very purpose of preparing it.

8. Does the Wills Act apply to a Muslim will?

No. The Wills Act 1959 applies in Peninsular Malaysia but expressly excludes the wills of persons professing the religion of Islam.

A Muslim will or wasiat is governed by Hukum Syarak and the relevant state law.

Its legal effect may depend on matters such as the identity of the beneficiary, the proportion of the estate involved and whether the consent of the lawful heirs is required.

As a general principle, a Muslim’s estate must also be considered in light of funeral expenses, debts, matrimonial-property claims where applicable, valid testamentary arrangements and the entitlement of the lawful heirs under faraid.

The existence of a wasiat does not necessarily mean that every asset can be released or transferred immediately.

The appropriate administration route may involve the High Court, the Small Estates Distribution Division, Amanah Raya Berhad or another relevant authority, depending on the composition and circumstances of the estate.

The document and the assets should be reviewed before the family selects the procedure.

9. A will only governs assets that form part of the estate

Another common assumption is that every asset connected to the deceased must be distributed according to the will.

That is not always the case.

Before applying the will, the executor must determine whether the deceased actually owned the asset and whether it forms part of the estate.

An asset may be jointly owned. It may be held on trust for another person. It may have been transferred before death. It may also be subject to a nomination or other contractual arrangement with its own legal effect.

Similarly, a person cannot give away through a will something that he or she no longer owns at the time of death.

A complete estate review should therefore consider the ownership document for each asset instead of relying only on a general list in the will.

10. A well-drafted will makes administration clearer - not unnecessary

The purpose of a will is not to avoid estate administration altogether.

Its purpose is to make that administration more organised.

A properly prepared will can:-

• identify the intended beneficiaries;

• appoint a suitable executor;

• provide for minor or vulnerable beneficiaries;

• establish an appropriate trust;

• address the testator’s business interests;

• reduce uncertainty over particular assets; and

• provide clear administrative powers to the executor.

Without a will, the family may first need to agree on who should apply as administrator. Consents, renunciations and an administration bond may also be required, depending on the application.

A will may simplify these matters, but someone must still take responsibility for completing the administration.

11. Estate planning should continue after the will is signed

A will prepared ten years ago may no longer reflect a person’s present family or financial position.

The person may have married, divorced, acquired new property, sold the asset mentioned in the will or taken substantial financing. An appointed executor or beneficiary may have passed away.

For non-Muslims, marriage may also revoke an earlier will unless it was made in contemplation of that marriage, as provided under the Wills Act 1959.

A person should therefore review the estate plan after any major change involving:-

• marriage or divorce;

• the birth or adoption of a child;

• the death of an executor or beneficiary;

• the purchase or sale of significant property;

• new business ownership;

• substantial borrowing or guarantees; or

• a major change in the intended distribution.

It is also useful to maintain an updated record of assets and liabilities, together with the contact details of the relevant banks, insurers, trustees and professional advisers.

This record should support the will, not replace it.

12. The document is only the beginning

Preparing a will is an important step. It records intentions while the person is still able to make decisions.

However, the effectiveness of an estate plan also depends on whether the will remains valid and current, whether the executor can be located, whether there is sufficient liquidity and whether the assets can practically be administered in the manner intended.

A will left in a drawer cannot transfer a house, settle a loan or release a bank account by itself.

Someone must obtain the appropriate authority, identify the assets, settle the liabilities and complete the distribution.

The better these matters are planned during the owner’s lifetime, the fewer unanswered questions the family will need to resolve later.