law. In addition to the land or building, a small estate may consist of movable
property, such as cash, money in bank savings or current account, unit trusts,
and company shares.
After the recent amendment known as the Small Estates
(Distribution) (Amendment) Act 2008 (the amending Act), the value of a small
estate is increased to RM2 million. In other words, after the amendment, the
property of a deceased millionaire can be a “small estate”.
The debts of the deceased are not to be deducted when
ascertaining the value of a small estate. A trust property is not to be included
either in the small estate. A small estate must include some landed property
(known as immovable property in law) for example, a piece of land, a house or a
shop. Without landed property, it cannot be a small estate.
Even if the property of the deceased person consists of only
a few thousand ringgit in cash, it does not become a small estate. Movable
property (such as cash or company shares) does not constitute a small estate.
Value increased
The amending Act received the Royal Assent on Jan 24, 2008,
and was published in the Gazette on Feb 7, 2008. It will come into force on a
date to be appointed by the relevant minister by notification in the Gazette.
The most important amendment introduced by the amending Act
is the increase in the value of a small estate. The value of a small estate is
increased from RM600,000 to RM2 million.
Such an increase is phenomenal. The total value of a small
estate is now up to RM2 million. It is 333% of the original value of RM600,000
before the amendment. The drastic increase in the value of a small estate in a
way reflects the fast spiralling inflationary trend in this country.
It is instructive to note the upward adjustments in the value
of a small estate over a period of 50 years since the inception of the principal
Act in 1957.
A “small estate” was worth only RM10,000 or below, when it
was first introduced in 1957. The principal Act came into effect on Oct 1, 1957,
soon after this country achieved independence.
The recent increase in the value of a small estate from
RM600,000 (since 1990) to RM2 million is considerable. The adjustment of 333% in
the value of a small estate has been the highest since the introduction of the
principal Act (apart from the sixfold increase in 1979).
If one compares RM2 million with the initial RM10,000 (the
value of a small estate first introduced in 1957), the former is 200 times the
latter! This would mean that over a period of 50 years, the increased value of a
small estate amounts to 20,000% (or 200 times) its initial value!
Could it be that the government is anticipating that an
impending fuel price hike would lead to a steep increase in property prices?
Where to file the petition?
After the amendment, the petition is to be lodged in the
district where the immovable property (a piece of land or a house) is situated:
s.8(1). The petition need not be lodged in the district where the greater part
of the property is situated.
For example, if a house is situated in district A, the
petitioner of a small estate must file his petition in district A, though the
greater part of the property is found in another district, say district B. Even
though the house may constitute a minor part of the small estate, the petition
The Malaysian Bar
http://www.malaysianbar.org.my Powered by Joomla! Generated: 13 April, 2016, 22:05
must be filed in the district where the house is situated.
The Director of Lands and Mines (PTG) of the state concerned,
or the Director General of Land and Mines (PBGT) of the Federation, has
discretionary power to order that the petition be heard by the land
administrator of a particular district.
But someone must make the application. The order made must
appear to be convenient to the parties or witnesses, or it is in the interest of
justice to make such an order. The order made is final and not subject to any
appeal: proviso to s.4(2).
Sale of movable property by land administrator
The land administrator has been given additional power to
sell property. Under a new provision, if two (or more) beneficiaries are each
entitled to a share in any movable property (such as company shares), the land
administrator may sell the property. But, when exercising his discretion, he
must have regard to the interests of the beneficiaries concerned: new s.15(5A).
Transitional provision
Under the transitional provision, all small estate petitions
filed before the amendment, are to proceed under the old procedure. Only
petitions lodged after the amendment are to be heard according to the new
procedure.
All petitions for small estates distribution lodged before
the coming into force of the amending Act, must follow the previous procedure:
s.12(1) of the amending Act.
All small estate matters commenced before the amending Act
takes effect (or pending before a land administrator), must continue to be heard
under the previous procedure: s.12(2) of the amending Act.
Conclusion
The Small Estates (Distribution)(Amendment) Act 2008,
increases the value of a small estate to RM2 million. As a result, a
millionaire’s property may be treated as a small estate. It reflects the rapid
inflationary trend taking place in this country.
Every land office must therefore have sufficient resources to
deal with the influx of small estates matters. Otherwise, the accumulation of
small-estate cases and undue delay in their disposal are inevitable. It is hoped
that the authorities concerned have taken necessary steps to cater for such
eventualities.
The writer is a member of the Conveyancing Practice
Committee, Bar Council, Malaysia
www.malaysianbar.org.my
Note: This column is brought to you by the Malaysian
Bar Council for your information only. It does not constitute legal advice. You
should therefore seek professional legal advice for your specific needs. Neither
the Malaysian Bar nor the Sun Media Corporation Sdn Bhd shall be liable to any
reader who suffers losses as a result of relying on this column.
No comments:
Post a Comment