ESTATES

DECEASED ESTATES

It is a requirement in law for all Estates of deceased persons to be reported to the Office of the Master of the High Court in the jurisdiction in which the deceased lived prior to his or her death.

The Administration of Deceased Estates is a complicated and a highly technical process which should only be embarked upon by persons with the necessary expertise to do so.

Very often, a surviving spouse is the nominated Executor or Executrix in a Will, and that Executor or Executrix has little or no knowledge of the administration of Deceased Estates. Usually such a person will approach an expert in this field to attend to the Administration of the Deceased Estate on behalf of the person under Power of Attorney, to enable the Estate to be effectively and efficiently administered.

Where this function is administered by a specialist, the specialist will invariably charge a fee equal to the statutory administration charge or a negotiated portion thereof. The fee for administering Deceased Estates is set by legislation and is currently calculated at 3.5% of the gross assets of the deceased, plus VAT if the specialist is a VAT vendor.

What should you do on the death of a loved one?

The survivor should, as soon as possible, notify his or her attorney of the death, and ascertain the whereabouts of the Deceased’s original last Will. There are often cremation or burial instructions in Wills, and it is important for those left behind to take cognisance of such instructions. It is therefore important for a Last Will to be located prior to funeral/cremation proceedings being finalised.

It usually in order for the administrative functions following the death of a person to only commence once the practical and emotional aspects of the death of the person have been dealt with, for example, after the funeral or cremation has been attended to. In some instances there might be urgent matters to be dealt with, such as financial matters which cannot wait until after the funeral, and, in this event, it is advisable to contact one’s attorney as soon as possible.

There are a number of formalities relating to the reporting of a Deceased Estate. I refer you to a document listing the information and documentation required to report an Estate, which will be helpful in ensuring you take as much of the correct documentation with you to the first consultation as possible.

The preliminary reporting documents that will need to be drafted following the initial consultation are as follows:

  • Death Notice (which is different to the death certificate which is issued by Home Affairs);

  • Preliminary Inventory indicating very roughly what assets the deceased held at the time of his or her death. The information on this document is required by the Master of the High Court to enable the Master to ascertain whether the deceased held assets in excess of R125 000,00 or not.

  • Where the assets of the deceased are below R125 000,00, there is a shortened procedure for the administration of such Estates under Section18 (3) of Administration of Estates.

  • An Acceptance of Trust as Executor. This is required by the person appointed in the Will as Executor or Executrix and needs to be submitted to the Master of the High Court with all the details of that person before the Master will issue Letters of Executorship appointing that person.

  • Special Power of Attorney (if applicable) appointing a specialist to administer the Estate on behalf of the Executor or Executrix, if the specialist is not the nominated Executor or Executrix in terms of the Will.

  • Next of Kin Affidavit pertaining to the children of the deceased.

  • Other miscellaneous documents required by the Master of the High Court.

  • The original Death Certificate should be obtained from the Funeral Directors and this, together with the original Will and the above documentation, will be submitted by the specialist to the Master of the High Court. If the Master is satisfied that all the documentation is in order, the Master will issue Letters of Executorship which will authorise the Executor or Executrix, and the duly appointed specialist, to commence with the administration of the Estate.

  • The winding up of Deceased Estates in South Africa can take up to anything from five months to a year or more, depending on the complexity of the Estate. The Office of the Master of the High Court is the office in the Department of Justice which oversees the administration of all Deceased Estates.

  • In Pietermaritzburg, a fast track system has recently been introduced which may well reduce the minimum time period for the administration of simple Estate where there is no Estate Duty payable and/or where no minor beneficiaries are involved.

  • After the Letters of Executorship have been issued, the Executor or the duly appointed specialist agent will submit an advertisement to the Government Gazette and a newspaper paper circulated in the area in which the deceased resided at his death, notifying the public of the death and requesting debtors and creditors to submit their claims to the Executor within 30 days of the publication of the advertisement.

The Executor or agent will then proceed to obtain accurate details of nature and value of all the assets in the Estate, ascertain the liabilities, deal with insurance policy claims and generally attend to matters which require attention. For example, this would include matters relating to investments, the administration of properties, the running of businesses or farms pending the administration of the Estate.

Once the necessary information has been obtained by the Executor or agent, the Executor or agent will compile what is called a Liquidation and Distribution Account (essentially the Estate Account) which will reflect all the assets, all the liabilities, the cash and liquidity situation, administration costs and a distribution section indicating how the assets are to be distributed to the heirs in terms of the Last Will, or in terms of the Intestate Succession Act if there is no Will.

More information on the Intestate Succession Act can be obtained from the Power Point presentation on Wills if require.

The Estate account will then be lodged with the Master of the High Court who will examine it and satisfy himself that it is in order and drawn strictly in terms of the Administration of Estates Act.

Once approved, the Executor or agent will then advertise the Estate Account in the Government Gazette and in the local newspaper, to lie for inspection by the public. Members of the public are entitled to peruse any Liquidation and Distribution Account , and to lodge an objection to any aspects of the account during this period if they so wish.

Once the Estate account has lain for inspection, free of objection, and the Master has authorised the Executor or agent to pay out or distribute in terms of the Estate account, the Estate can be finalised.

There are often conveyancing transactions required in the Administration of Estates, for example where the family home is left to the surviving spouse. Any such conveyancing transactions usually have to wait until the end of the Administration of the Estate for the necessary transfers to be effected.

Where sales of properties are concluded during the Administration of the Estate, these do not have to wait for the finalisation of the administration of the Estate before they are transferred to the purchasers.

CURATORSHIP ESTATES

It is sometimes necessary for a Curator Bonis to be appointed by the High Court to manage and administer the affairs of a mentally or physically disabled person.

In these days of an increase in the instance of Alzheimer’s Disease and Senile Dementia, it is very common for elderly people to become mentally disabled and unable to administer their own affairs.

In South Africa at the moment, there is no such instrument as an Enduring Power of Attorney, which exists in certain other jurisdictions in the world, and any Powers of Attorney that are granted by a person whilst mentally capable, in law fall away upon such person becoming mentally disabled and unable to appreciate the implications of the granting of such Power of Attorney.

In this instance, an Application to the High Court should be made for a professional person to be appointed as Curator Bonis for such disabled person. Once appointed as such the Curator Bonis would take over the entire financial and commercial administration of the disabled persons affairs by order of Court.

Ant is an experienced Curator Bonis in a number of Curatorship Estates and continues to offer this service to clients or their family members.

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