Written by: Sr. KC Law
While it is a trying time to cope with losing a loved one, as the beneficiary, you must be clear-headed when dealing with his/her property and assets. In this article, we suggest a protective measure for your real estate inheritance. Do read on.
What is a will?
A will is a legal document that determines how a person’s wealth will be distributed among his/her beneficiaries after he/she dies.
When a person dies with a valid will, a grant of representation is given to a person granted by the authority to deal with the assets and liabilities of the deceased.
The person granted with this representation is known as the “Executor”. The executor’s role is to administer the wishes of the deceased according to what is spelt out in the will.
The executor will need to appoint a lawyer to get a “grant of probate” from the High Court of Malaya before he/she is allowed to transfer/distribute the estate or assets to the beneficiaries based on the deceased will. This would take approximately 3-4 months
On the other hand, if the deceased did not leave a valid will, the next of kin may apply for the “letters of administration” in order to be appointed as the administrator of the deceased’s assets. This would take approximately 2 years. The distribution of assets will be in accordance with the Distribution Act 1958 and Distribution (Amendment) Act 1997.
At the same time, it is crucial for you as the beneficiary or the executor to get the property valued by a registered property valuer as soon as you can in order to have a “value stamp”.
Why is this so?
Other than enabling a fair distribution of estate and assets between beneficiaries, it also helps in your future Real Property Gains Tax (RPGT) filing should you as the beneficiary wish to sell the property immediately or at a later date. The RPGT chargeable gain is calculated by taking the current fair market value minus the fair market value at the date of the person’s demise.
As of 2019, there is a 5% RPGT on chargeable gain for individuals who dispose of their property acquired or inherited for more than 5 years. Whereas, for property owned by companies, there will be a 10% RPGT on the chargeable gain.
In order to reduce or eliminate uncertainty and errors in RPGT calculation during the disposal of your inherited property in the future, it is definitely wise to get a property valuation done for each of your inherited property.
Since valuation is not an exact science, it is difficult to accurately determine the fair market value of a property retrospectively, since the sentiment and market environment would have been different.
Therefore, having a property valuation done as soon as possible gives a more accurate assessment of the property value at that point in time.
To all property beneficiaries, real estate agents selling inherited properties, estate, will and trust lawyers and property holding companies, Action Valuers provide property valuation report service to address the above needs and help you manage these uncertainties. For more information, do contact us at 03-77851888.
About the author
Sr. KC Law is a Registered Valuer, Estate Agent and Property Manager with The Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVEAP) of Malaysia. KC Law is also an electronic engineer registered with the Board of Engineer Malaysia (BEM) and received his engineering training from Tunku Abdul Rahman College Malaysia and later at Hatfield Polytechnic United Kingdom. In the 1990’s he was involved with the digital transformation of Telecommunication infrastructure for Maxis and Telekom Malaysia. His passion for Real Estate in the 2000s led him to practice as a real estate negotiator in Ace Realty and later valuation and property management in Rahim & Co International. Several years later he founded Action Real Estate and Action Valuers & Property Consultants. His areas of expertise are in Real Estate Agency, Property Valuation, Property Management and Business Valuation. He is Member of The International Association of Certified Valuation Specialists of Canada, Member of Royal Institution of Surveyors Malaysia, Member of Malaysia Institute of Estate Agents and Member of Business Valuers Association of Malaysia.