Estate administration is a lengthy, complex process of accounting for and distributing your worldly belongings. The expeditious winding up of an estate will depend on a number of factors such as how well your estate is organised, the skill and expertise of your executory, and the clarity of your Will. Here we provide answers to frequently asked questions pertaining to estate administration.
Who must report my death and where?
In the event of your passing, your estate must be reported to the Master of the High Court within 14 days of your death. Your estate can be reported by your spouse or, if you have no surviving spouse, it can be reported by your nearest relative or any person who has control of any property belonging to you, or any person who is in possession of your Will or a document they believe is your Will. Generally speaking, your estate must be reported to the Master’s Office in whose jurisdiction you are resident twelve months prior to your passing. If you are living outside of South Africa at the time of your death, your spouse or nearest relative can report your death to any Master’s Office
Is my nominated executor guaranteed to be appointed?
No. The person you have nominated as executor must apply to the Master of the High Court to be formally appointed. If the Master is satisfied with the person you have nominated, he will issue what is referred to as Letters of Executorship which is the formal mandate allowing your executor to administer your estate. If the Master is not satisfied that your nominated executor has sufficient knowledge or expertise, he may insist that an agent (such as an attorney or fiduciary expert) be appointed to assist them.
What happens if I don’t appoint an executor?
If you fail to appoint an executor or if you die without a valid Will, the Master will appoint a person competent in law to fulfil the role. This person is known as the executor dative. In the absence of a nominated executor, the Master may ask your family to appoint a family member or professional person to perform the role. If any conflict arises amongst your beneficiaries regarding who should be appointed as executor, keep in mind that your surviving spouse or their representative has first preference.
How long does it take to wind up an estate?
The estate administration process is generally a lengthy and administratively intense process which can take anywhere between six to eight months to several years to complete depending on the complexity of the estate and the state of your affairs on your passing. Having a clear, concise and valid Will which is not open to interpretation will also help to ensure that the winding-up process functions smoothly. Ideally, make sure that your Will remains updated and that your loved ones know where the original is held. In addition, keep a filing system of all documentation and information that your executor would need in order to wind up your estate.
What documents will my executor need to wind up my estate?
Generally speaking, your executor will need all information and documentation pertaining to you and your financial affairs. The documents that he will require include (but are not limited to) the following:
- ID document
- Death certificate – best to make about 20 certified copies
- Original Will
- Marriage certificate and antenuptial contract
- Divorce order and settlement agreement
- ID documents, birth certificates and information pertaining to next of kin
- Acceptance of Trust (J190)
- Income tax number
- Pension details and benefits
- Title deeds for fixed property
- Bank account details and bank cards
- Recent municipal accounts and utility bills
- Firearm licences
- Policy information
- Medical aid number
Can I appoint more than one executor?
Yes, you can appoint two or more executors to your estate who will then be referred to as co-executors and the executor’s fees will be shared equally between them. That said, keep in mind that having multiple executors can come with its own set of problems. For instance, if you have two co-executors who cannot reach agreement on an issue, they may be required to refer the matter to the Master for resolution which can result in delays. Further, keep in mind that all executors will need to meet the strict FICA requirements meaning that all the FICA documents pertaining to each of the executors must be collected, certified and submitted to the Master, and if any of the executors live out of town, this can result in delays in the appointment of your executors.
Can I appoint a family member as my executor?
Yes, you can appoint a member of your family as your executor provided they are over the age of 18 and did not sign as a witness to your Will. However, keep in mind that you cannot nominate someone who is insolvent or who is mentally unstable.
Who pays the executor and how much?
Your deceased estate is liable for the executor’s fees. Executors are entitled to charge up to 3.5% of the gross value of assets in your estate plus 6% on any income accrued and collected after your death although. In this regard, it is advisable to have a comprehensive estate plan drafted to ensure that you understand which assets fall in your deceased estate and are therefore subject to executor’s fees.
Will all my bank accounts be frozen when I die?
In theory, the estate of a deceased person is frozen and no one is permitted to withdraw funds from his bank account or deal with any of deceased estate’s assets without permission from the Master. Remember, if you are married in community of property, your joint estate may be frozen meaning that your surviving spouse may have difficulty accessing funds. However, each bank has its own set of rules on how to treat bank accounts of spouses married in community of property, so ideally check with your bank what their ruling is. In practice, many banks will freeze the accounts of the deceased upon being notified of their death and until an executor has been appointed, and it is during this time that a surviving spouse may experience difficulties accessing funds,
What assets do not form part of the winding-up process?
Certain assets fall outside of your deceased estate and should therefore not be dealt with in terms of your Will. For instance, approved retirement funds do not form part of your deceased estate as they are distributed by the retirement fund trustees in terms of Section 37C of the Pension Funds Act. Further, living annuities where you have nominated a beneficiary will not form part of your estate to the extent that the contributions to the retirement fund qualified as a tax deduction. In addition, if correctly structured, the proceeds of a business assurance and/or key person policy will not form part of your deceased estate.
Who pays for the funeral, burial and/or cremation?
Your funeral, burial and cremation costs will be paid for from your deceased estate. If you are an ordinary resident of South Africa, the Estate Duty Act makes provision for the value of certain assets to be deducted from your estate before levying estate duty. In terms of Section 4(a) of the Act, the costs of your funeral, tombstone, deathbed expenses (including doctor’s fees) burial or cremation costs, as well as death notice advertisements can be deducted.
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