Practical steps to administering a deceased estate

Anyone who’s ever wound up a deceased estate is likely to attest to the cumbersome, lengthy, and bureaucratic nature of the process. In the emotional aftermath of a loved one’s death, families very often find themselves having to navigate the practical realities of winding up the deceased’s estate. This article is designed therefore to unpack and simplify the estate administration process.

Reporting the death to the Department of Home Affairs

The Births and Registration Act requires that a person’s death be reported to the Department of Home Affairs, following which a death certificate will be issued. In practice, however, the funeral parlour will report the death on behalf of the family and ensure the issuing of the death certificate. That said, it is important to ensure that you provide them with the correct details to avoid Home Affairs issuing a death certificate that contains errors as this will delay the registration of the deceased estate.

Locating the last will

Locating the deceased’s will is an important next step because, in the absence of a valid will, the deceased will be deemed to have died intestate. If you don’t know the location of the will, it is advisable to contact the deceased’s bank, attorney, financial adviser or investment house. Besides being an important document in terms of the distribution of the deceased’s assets, it also provides details of the nominated executor who will then need to be notified of the death.

Registering the deceased estate

One of the executor’s first duties is to notify the Master of the High Court of the death by submitting a J94 death notice. The death notice needs to be completed by the deceased’s surviving spouse, nearest blood relative, or the person who identified the deceased, and should ideally be submitted within 14 days of death. If the deceased was residing in South Africa at the time of death, the estate should be reported to the Master’s Office in whose jurisdiction the deceased was living 12 months prior to his/her death. Where the deceased was not residing in South Africa at the time of death but owned assets in this country, then his/her death can be reported to any Master’s Office.

Initial meeting with the executor

Once the estate has been registered, the executor is required to hold a preliminary meeting with the deceased’s family and loved ones in order to check the validity of the will, determine who the beneficiaries and heirs are, and prepare an inventory of the deceased’s assets and liabilities. At this stage, it would be helpful to provide the executor with copies of the deceased’s ID document, birth certificate, passport, marriage and/or divorce certificates, bank account details, title deeds, and insurance policies.

Obtaining the letters of executorship

To formalise his/her appointment, the executor must apply to the Master’s Office for what is referred to as letters of executorship which will only be issued if the Master is satisfied that the will is valid and that the nominated executor is fit for duty. Where the value of the estate is less than R250 000, the Master can dispense with the need for an executor and give directions as to how the estate should be wound up. If the Master finds the will to be invalid, he/she will appoint an executor dative who will then wind up the estate in accordance with the laws of intestate succession. 

Opening an estate late bank account

If the estate has cash of more than R1 000, the executor is required to open a bank account in the name of the deceased and deposit all monies into that account.

The tax liabilities of the deceased estate

The executor is also required to report the deceased estate to SARS and ensure that all tax liabilities are brought up to date. In doing so, he/she is required to submit tax returns and pay over any CGT that is owed.

Advertising the deceased estate

The executor is required to advertise the deceased estate so that any potential creditors can register their claims. To do this, the executor will need to place a Section 29 advert in the local newspaper and government gazette in the area where the deceased resided prior to his/her death. Generally speaking, if you contact your local newspaper they will send you the relevant forms to complete and will forward the advert to be published in the government gazette. Once the advert is published, creditors have 30 days in which to lodge claims against the deceased estate.

Preparing the L&D account

Once all claims have been lodged, the executor must prepare a liquidation and distribution account which is a complete list of all the assets and liabilities of the deceased estate. The L&D account must also include the names of the beneficiaries, their respective inheritances, as well as the income and expenditure of the deceased estate. While generally speaking, the Master requires the L&D account to be filed within six months of the date of death, an extension can be requested if necessary.

Lodging the L&D account

Once finalised, the executor must lodge the L&D account with the Master where it must lie for 15 days to allow for queries. The executor must respond to any queries that the Master has on the accounts and, once satisfied, the Master will give permission for the L&D account to be advertised.

Advertising L&D account

The executor is required to place a Section 35 advert in the local newspaper and government gazette announcing that the L&D account will lie open for inspection at the Magistrate’s Court for a period of 21 days. If no objections are received, the Magistrate will issue a certificate of no objection which, once lodged with the Master’s Office, will mean that the executor can distribute the estate.

Paying the estate’s creditors

Before distributing assets to the heirs and beneficiaries, the executor must obtain a release from the receiver of revenue confirming that all outstanding taxes have been paid. Thereafter, all other liabilities in the estate must be paid before the estate can be distributed amongst its heirs. The executor is entitled to charge a prescribed fee of no more than 3.5% of the gross value of the estate (excluding VAT) – and, in addition, is entitled to a fee of 6% of any income that he/she collects on behalf of the deceased estate.

Paying the heirs and beneficiaries

Once all liabilities have been settled, the executor can distribute the assets either by transferring them into the name of the heirs, or by realising the property and paying out the proceeds in terms of the will. He/she must ensure that fixed property is transferred into the names of the nominated beneficiaries, keeping in mind that no transfer duty is payable on inherited property, although the conveyancing fees will be paid by the estate. Once the heirs have received their inheritance, they are required to sign an acquittance as verification of receipt.

Once all assets have been distributed, the executor can apply to the Master for a discharge from all responsibilities and, if satisfied, the Master will issue a filing slip and discharge certificate.

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