Reporting an estate? Master’s Office? Executor’s fees? Estate Duty? These are some of the terms that are associated with reporting and administering the estate of a deceased person.
After losing a loved one, many find it difficult to come to terms with finalising and wrapping up the affairs of the deceased. Fortunately, we have outlined some of the key aspects of this process.
Where a deceased passed away leaving a last Will and Testament their estate will be regarded as “testate” and is processed in terms of the Administration of Estates Act 66 of 1965. Should the deceased pass away without a last Will and Testament, their estate will be regarded as “intestate” and is processed in terms of the Intestate Succession Act 81 of 1987.
Many people ask, “Where do I report the death?” – the answer being, the Master of the High Court (often simply referred to as “the Master’s Office”) in the jurisdiction where the deceased was ordinarily resident within the last 12 months of his/her life. The rule is that this must be done within 14 days of the death of the deceased however, there are no penalties for doing this at a later stage.
Where the deceased left behind an estate with a total value of more than R250 000.00 it will be necessary to consult with an attorney to assist you with reporting and administering the estate. The Master’s Office only assists where the deceased left behind an estate with a value less than R250 000.00.
The following documents are required, where applicable, to report an estate:
- Death Certificate (or certified copy)
- Certified copy of the deceased’s ID
- Marriage Certificate, Ante-Nuptial Contract, or Divorce Order
- Original Will
- Certified copy of the Executor’s ID
- Certified copy of the IDs of the heir(s)
- Municipal Account of the immovable property / Copy of the Title Deed
The above documents will be used to complete the following reporting documents:
- Death Notice
- Inventory of Assets (immovable property, movable property, cash assets, policies [with no named beneficiaries] shares)
- Next of Kin Affidavit
- Nomination Form
- Acceptance of Trust as Executor / Master’s Representative
How to appoint an Executor?
If there is no last Will and Testament nominating an Executor/Executrix, then the Next of Kin are required to nominate an Executor. He/she will then have to accept the Nomination whereafter the Master’s Office formally appoints the Executor/Executrix by issuing the Letters of Executorship.
Executor’s Fees
An Executor is allowed to ask a fee of 3.5% of the total value of an estate, for administering and finalising the estate. This is why it is imperative that an Executor either has the professional skills and knowledge to administer an estate or appoints a professional to assist him. Where an Executor has been appointed, he or she will often approach an attorney or estate administrator for assistance. These attorneys or estate administrators then charge an Executor’s fee to attend to and finalise the estate.
Gathering the assets in an estate
The Executor is then tasked with determining the value of the assets in the estate as well as determining what the liabilities of the estate are. An Executor can realise the estate assets so as to satisfy the liabilities of the estate. Creditors have an opportunity to put forth a claim against the estate (this includes but is not limited to outstanding mortgage bonds, credit card claims, personal loans), this is done by way of an advertisement in a local newspaper and the Government Gazette.
Estate Duty
Estate Duty is payable to SARS where an estate exceeds the value of R3.5 million. If the estate is valued at more than R3.5 million but less than R30 million, the estate duty payable is 20% of the value of the estate, and where the value of the estate is more than R30 million, estate duty is calculated at 25%. There is , however, a list of deductions that are considered.
Preparing the Liquidation and Distribution Account
The Liquidation and Distribution Account essentially lays out the assets, liabilities, income and expenditure, and estate duty payable in the estate. It will also confirm to the Master’s Office how the estate is to be distributed to the heirs. Once the Liquidation and Distribution Account is approved by the Master’s Office, the estate must be advertised in a local newspaper and the Government Gazette for one final time for any objections to be raised against the estate.
Paying Creditors and distributing the estate to heirs
If there are no objections raised against the estate, the Executor can then proceed with paying creditors and distribute the estate amongst the relevant heirs.
Finalising the estate
After all relevant parties have been paid, properties transferred, and bank accounts are closed, the Executor may take the fee due to him/her and consider the estate to be finalised.
Our recommendation to you
It is best to approach a reputable attorney or estate administrator to assist with the reporting, administration and finalisation of an estate. This can be a complex process and often requires the expertise of a professional. We find ourselves in a very precarious climate where fraud is so easily committed and it is best to leave certain matters in the hands of professionals. We, at Jooste Heswick Inc, pride ourselves on the level of service offered to our clients and endeavour to always ensure our clients are satisfied and our matters are finalised with the utmost integrity.
WRITTEN BY: LISA DE MINK
