6 difficulties when applying Letter of Administration (LA)

When a person dies without A Will (Dies intestate) - Apply Letter of Administration (LA)

1. Require two guarantors

• Family members might have difficulty to look for the qualified guarantors. The guarantors must have a net worth equivalent to the gross value of the deceased’s estate.
  

• This results in the delay in estate administration. Beneficiaries might take a longer time to receive their shares of the estate. The delay might result in estate shrinkage and beneficiaries might receive less due to the shrinkage in estate.

2. Conflict & problems faced over the appointment of administrator(s)

• The Court requires 1 or 2 administrator(s).

• Family contention arises over the right to be appointed as the Administrator(s).

• There is risk of the Administrator(s) absconding the estate.

• Appointed Administrator(s) may lack competence to perform.

• Family might not be able to obtain the 100% consent from all legal beneficiaries required.

• When there is a minor beneficiary, two Administrator(s) are needed.

3. Legal Fees higher to apply for LA To apply for LA, the family members might receive less due to the generally higher legal costs incurred.

4. Financial difficulties faced by the family as it takes more time to apply for LA Normally it takes 2 to 5 years OR MORE, thus dependants may face cash flow problems as the deceased’s bank accounts are frozen. Distributions under the Law might results in a change in ownership in businesses/companies of the deceased which might lead to fragmentation and loss in continuity and control.

5. The Law takes over your ‘RIGHT’ to name your beneficiaries

• As there is no Will, whom your beneficiaries are and the proportion for distribution are decided by the law. The distribution may not be that of your choice, and you lose your Right to distribute your hard earned assets the way you want it.

• Under the Law, there is no provisions for partner, stepchildren, illegitimate children, relatives whom you support.

6. The Law takes over your ‘RIGHT’ to appoint trustees and guardian for your minor children

• If both parents die in a common disaster, the Court decides who are the trustees & guardians for your minor children.
  

• The appointed person(s) might not be competent to perform the job.
  

• Welfare of minor might not be taken care of.
  

• Misuse of funds by the appointed Trustee might happen.
  

• You lose your Right to choose your preferred trustees/guardian.

Source: Rockwills Sdn. Bhd