What happens to your loved one’s assets when they pass away?
The Origin of a Deceased Estate
A deceased estate comes into existence when a person passes away. If the person left a will, their estate will then be administered in accordance with their will, or failing a valid will, in terms of the Intestate Succession Act, 81 of 1987. The procedure which must be followed to administer a deceased estate is prescribed by the Administration of Estates Act, 66 of 1965. (as amended).
Where must the Estate be Reported?
The estate must be reported to the Master of the High Court in whose area of jurisdiction the deceased was living at the time of his/her death. The Master has 14 offices countrywide namely: Johannesburg, Pretoria, Cape Town, Pietermaritzburg, Grahamstown, Bisho, Umtata, Bloemfontein, Kimberley, Mmabatho/Mafikeng, Polokwane, Durban, Port Elizabeth and Thohoyandou.
When and by whom must Estates be Reported?
The estate of a deceased person must be reported to the Master of the High Court within 14 days from the date of death. The estate is normally reported by the nominated Executor or his agent (i.e. Basson Roux Attorneys Inc.).
How to Report an Estate to the Master of the High Court
The reporting documents will differ slightly depending on the value of the estate and the type of appointment required.
If the deceased did not leave a valid will and the gross value of the estate is less than R50,000.00 then you can report the estate to your closest Magistrate’s Office for assistance.
For any other estate we recommend that you contact a professional (i.e. Basson Roux Attorneys) that we can assist you in obtaining a letter of authority (estate with value less than R250,000.00) or a letter of executorship (all estates with a value of more than R250,000.00).
The administration process
Obtain required documents and report estate to the Master:
We assist you to complete the required forms and send the reporting documents to the Master of the High Court. Bring the necessary documents with you to the first consultation (see back of pamphlet).
The Master appoints an Executor:
If the Master is satisfied with the reporting documents and do not have any further enquiries, he will proceed to issue a letter of executorship. The letter of executorship gives the executor the power to deal with the estate.
Advertisement to creditors:
The Executor advertises in a local newspaper and the Government Gazette, inviting all creditors to prove their claims.
Open an estate bank account:
A bank account in the name of the estate must be opened.
Wind up the estate:
Obtain details of all assets and liabilities. All bank accounts will be closed and any monies due to the estate will be paid into the estate bank account. If there are not enough cash assets in the estate to cover the estate expenses and liabilities, the executor will proceed to sell the assets in the estate or alternatively heirs can cover the shortfall and keep the assets.
Draft a Liquidation and Distribution (L&D) account :
Account shows a “snapshot” of all assets and liabilities, the anticipated inheritance and beneficiaries, as well as income and expenditure items arising after date of death.
The Master of the High Court approves the L&D account:
The L&D account gets lodged to the Master of the High Court with an estate duty declaration.
Advertisement that estate will lie open for inspection:
Once the Master of the Court has approved the L&D, an advertisement gets placed in a local newspaper and the Government Gazette informing interested parties that the L&D is lying open for inspection at the Master’s office and Magistrate’s office for 21 days. Any interested party can object to the estate during this time.
Distribution of estate to heirs:
Once the 21 days have gone by free of any objections, the estate gets distributed. This includes payment to creditors, payment to heirs and transfer of immovable property.
Final documents and affidavits are submitted to the Master to close the estate file:
Executor provides the Master with proof that creditors have been paid and assets distributed. The estate is finalised and duties of executor are discharged.
ESTATE DOCUMENTS NEEDED
The executor needs specific documents of the deceased to speed up the administration process. If certain documents, such as title deeds of fixed property or share certificates, cannot be traced, the executor must obtain duplicate documents at the expense of the estate, which may create a delay.
The types of documents normally required include:
- Last signed original will (or particulars of where it can be found)
- Deceased’s identity document
- Death certificate
- Marriage certificate
- Antenuptial contract (if applicable)
- Name and date of death of any predeceased spouse (if applicable)
- Divorce order and deed of settlement (if applicable)
- Copies of identity documents of all heirs
- Copies of marriage certificates of all heirs
- Postal addresses and contact particulars of all heirs
- Name and address of deceased’s employer
- Deceased’s employee number
- Pension number, name and address of pension fund
- Membership number, name and address of medical fund
- Income tax reference number and office where registered
- VAT registration number (if applicable)
- Title deeds/Sectional title deeds/Timeshare certificates or particulars where obtainable
- Lease contracts
- Firearm licences
- Vehicle registration certificates
- Share certificates or name of institution where portfolio is managed or electronically kept in custody
- Unit trust certificates/notices
- Any other investment certificates
- Last cheque book and bank statement
- Mortgage bonds
- Promissory notes in respect of loans owed to the estate
- Credit cards and any other bank cards
- Life insurance policies, or full particulars
- Short-term insurance policies, or full particulars
- Details of safety deposit boxes at any banks
- Partnership agreements, purchase and sell agreements and latest financial statements in respect of any business being operated (if applicable)
- Deeds of sale in which the deceased had an interest
- Details of all debts owed by the deceased