A deceased estate comes into existence following a person’s death, whether they leave behind a valid Will or not. If they do not leave behind a valid will, it will mean that the estate will be wound up intestate, which will still follow the same procedure as listed below, but an Executor will be selected by the Master of the High Court, and the deceased’s assets will be distributed according to the laws of intestacy, which may not be in accordance with what the deceased may have wanted. As can be seen from the following process, the winding up of an estate is a very lengthy process, which takes an abundance of time and resources, making it beneficial to appoint a professional third party to act as the executor in order to ensure the estate is wound up timeously.
1. Reporting the Estate
As soon as possible after the death, a death notice has to be completed by the surviving spouse, nearest blood relative, or person who identified the deceased. The Master of the High Court will over-see the winding up of the deceased estate, including the financial affairs of the deceased and the interest of the heirs, beneficiaries and creditors.
2. Obtaining the Letter of Executorship or Letter of Authority from
the Master of the High Court
• If the value of the estate exceeds R250,000, a Letter of Executorship will have to be issued.
• If the value of the estate is below R250,000, A Letter of Authority will have to be issued.
On written application by the person nominated in the Will (the Executor), the Master may grant a Letter of Executorship to such person/s. The Letter of Executorship will be signed and sealed and handed to the Executor. The liquidation and distribution of the estate cannot commence without this. If the value of any estate does not exceed the amount of R250,000, which is determined by the Master by notice in the Gazette, the Master may dispense with the appointment of an Executor and give directions as to the manner in which any such estate shall be liquidated and distributed.
What documents are required by the Master of the High Court?
• Death Notice
• Death Certificate (Certified)
• ID of the Deceased (Certified)
• ID of the Executor/s (Certified)
• ID of all Heirs who will Inherit (Certified)
• Next of Kin Affidavit
• Originally Signed Will
• Marriage Certificate and Antenuptial Contracts
• Declaration of Marriage
• Pre-Deceased Spouse’s Death Certificate (Certified)
• Previous Divorce Orders
• Declaration that the Estate was not Previously Reported
• Acceptance of Trust as Executor, in Duplicate
• Nomination of Executor if no Will is Available
3. Opening an Estate Bank Account
If the estate has cash to the value of more than R1000.00, the Executor must then open a bank account in the name of the estate and deposit all monies into that account. He may open a savings, or interest-bearing account for money not required by the estate immediately. The Executor shall inform the Master of the details of that account.
All payments must contain the payees name and reason for the payment.
4. Advertising the Estate
Once the Letters of Executorship have been granted, the Executor must publish a notice in the Government Gazette and in one or more local newspapers:
• Circulating in the district in which the deceased resided at the time of his death
• If at any time within the period of twelve months immediately preceding the date of his death he so resided in any other district, also in one or more newspapers circulating in that other district.
• Or if he was not ordinarily so resident in any district in the Republic, in one or more newspapers circulating in a district where the deceased owned property.
This is to call upon all persons having claims against his estate to lodge such claims with the Executor within such period (not being less than thirty days) from the date of the latest publication of the notice.
5. Compiling the Liquidation and Distribution Account
The Executor must include all debts due to the estate and still outstanding and all property still unrealised, and the reasons why such debts or property, as the case may be, have not been collected or realised. It must also include the applicable assets. After the Master has examined the account and given permission to advertise, the Executor shall again publish a notice in the Government Gazette, local newspaper and Magistrates court to inform the public on where they may view the account. The account shall lie open for inspection for not less than 21 days for any interested party to inspect. Any interested person may lodge their objection with reasons in duplicate with the Master before the period for inspection has expired. The Master will then send the objection, with copies of documents, to the Executor by registered post. The Executor will have 14 days from receipt to submit his comments to the Master. The Master may then direct the Executor to amend the account or may give such other direction regarding the account as he may think fit. If the account is amended, it must again lie open for not less than 21 days for inspection.
6. Distribution of the Estate
After the required period has passed, the Executor can then proceed in paying the creditors, and distribute the estate to the heirs in accordance with the Liquidation and Distribution Account. A cash amount must always be retained for SARS until such time as the final tax assessment is received. The Executor must then lodge with the Master all receipts and details of the creditors and heirs and copies of title deeds and/or certificates from the registration officer or conveyancer. The Master will also accept the proof of payments to the creditors or heirs, or an affidavit by the Executor declaring that the creditor, heirs or beneficiaries were paid or received their share. The Executor must, no later than 2 months after the estate has become distributable, pay any deposits for the Guardian’s Fund to the Master on behalf of the person/s entitled to it, and has not been distributed according to the distribution account for whatever reason.
7. Closure of the Estate
The Executor will thereafter need to apply to the Master for a discharge from all responsibilities as the Executor. The Executor will need to submit proof that the estate has been liquidated and distributed according to the Will, or laws of intestacy, and the Liquidation and Distribution account. This proof can include the following:
• Proof of Payment of Estate Duty, CGT, and Income Tax
• Proof of Payment of the Master’s Fee
• Proof of Payment of All Liabilities
• Proof of Deposit into the Guardian’s Fund
• Proof of Payment of all Inheritances
• Proof that all Shares/Business Interests have been Sold/Transferred
• Proof of Transfer of Immovable Property
• Complete Set of Bank Statements
• SARS Tax Clearance Certificate
• Return of the Original Letter of Executorship
If the Master is satisfied, then he will issue a filing slip and discharge certificate, which will discharge the Executor from any further duties.
If you do need any assistance with appointing a professional third party as Executor or would like to revise your Last Will and Testament, please do not hesitate to contact your financial advisor, or you can contact me directly.