ADMINISTRATION OF ESTATES
Need help winding up an Estate of a loved one?
Who can be appointed as an Executor to deal with the administration of an estate? It is advisable that your attorney should be appointed as executor, although this is not always the case.
In the event that a family member is appointed as Executor in terms of a will, the family member will need the assistance of an attorney or qualified person to assist them in winding up the estate.
The attorney, in any event will be able to do the following:
- Be familiar with the directions contained in the Will
- Know where the assets and liabilities are
- Be in a position to wind up the estate and to carry out, transfer and register any fixed property
- Have specialised legal knowledge of the administration process
The duty of an Executor is to:
- Collect the deceased assets
- Circle his or her liabilities
- Pay any legacies
- Distribute the balance of the estate to the heirs in terms of the will of the deceased
- Act in accordance with the provisions of the Act and advise what the procedure is if the deceased died without a will
What happens in the winding up of the estate?
Once the death is reported, a death notice and an inventory of the deceased's assets are drawn up and these documents, together with the original Will (if there is a Will) are lodged with the Master of the High Court. It is therefore vital to meet and consult the executor or the agent assisting you with the winding up of an estate and that the necessary documentation needs to be completed, Certain documents will need to be commissioned as they are affidavits and it is quite a lengthy process usually a consultation of 40 min to an hour and a half is the norm.
The person nominated as executor in the will, if they are prepared to accept the appointment they do so in writing, this is part of the documentation that you will complete with the attorney.
Please remember if there is no will or a nominated executor then the person would have died in terms of intestate succession, there are different formalities and documents that need to be completed in the event that this should happen. The Master would then generally appoint an executor dative in this event but the attorney can explain the procedure to you should this be the case.
It is vitally important to note that the original will must be kept in a safe place - the Master does not accept copies. If the original will cannot be found but only copies, according to the Master they will state that a person in fact died intestate, in other words with no will and creating a whole bunch of new complications.
Approximately a month after application is made to the Master, the Master will issue what is called a Letter of Executorship or a Letter of Authority.
There are different circumstances if the estate is smaller and your attorney would be able to recommend and give advice on that. The executor then, once they have received the Letter of Executorship, has the necessary authority to proceed with administration formalities and to take custody of the estate, property and records. The attorney or executor will then open up what is called an Estate Late Account where the proceeds of the estate would be paid into until such time as the estate is wound up.
Once the Letter of executorship is issued the executor must take steps to determine the true value of the property in the estate, this information often takes quite a bit of time to gather. As soon as possible after the appointment of an executor, the executor must advertise in the government gazette and in one or more newspapers, usually the Citizen or the Star a notice calling upon creditors to lodge their claims within a stipulated period not being less than 30 days.
The Master will often send back documentation or a letter stating that they have queries about certain assets or information that they are not sure about. This can cause a delay in actual winding up of the estate. Once the master is satisfied he will then give permission that the account may now be advertised. The advertisement will also appear in the Government Gazette and one or more of the newspapers, the advert is to be in the hands of the Government printers a week before it is due to appear. During the advertisement period which is not less that 21 (twenty one) days, interested persons may inspect the account and lodge any objections they may have with the Master. The account generally will lie for inspection at the Magistrates Court where the testator or testatrix resides. Once the advertisement period is over and the account has passed the inspection period free from an objection, the executor is now in a position to pay creditors and to distribute the available assets amongst the heirs.
If there is a fixed property the necessary conveyancer may take some time to complete the property transaction. It is important to note that an estate is ideally supposed to be wind up in 6 (six) months but due to all the complications it often will result in up to 15 (fifteen) months. The more complicated the estate the longer it will take to actually wind up.
When is Estate duty payable?
Estate duty is currently calculated on the dutiable amount of the estate at a flat rate of 20 (twenty) percent.
The dutiable amount is calculated by deducting 3.5 million primary abatement of the nett value of the estate and the value of all property included in the deceased estate which accrues to the surviving spouse either in terms of the deceased will or by intestate succession can be deducted to the extent that it has been included in the property.
Further, the attorney or financial person will also take into account capital gains tax and this will or could have further implications.
We can assure you that we have the experience and the empathy to assist you and your family in winding up the estate of loved ones.