WHAT DOES THE PROCESS OF WINDING UP/ADMINISTERING A DECEASED ESTATE COMPRISE?

1.The Administration of Estates Act, 66 of 1965 (“the Act”) determines the way in which a deceased estate is to be administered/wound up. First of all, the estate has to be reported to the Master of the High Court (“the Master”) within whose area the deceased had ordinarily resided prior to his/her demise.

2. When reporting the estate to the Master, the latter will normally require the following documents to be submitted:

2.1 a completed and signed “Death Notice”;

2.2 a certified copy of the “Death Certificate”;

2.3 the original Last Will & Testament of the deceased (“the Will”);

2.1.3 sign the transfer or bond documents and/or pay the transfer and/or bond costs;

2.4 a certified copy of the identity document of the deceased;

2.5 a certified copy of the identity document of the surviving spouse;

2.6 a certified copy of the marriage certificate/final divorce order;

2.7 a certified copy of the identity document of the Executor/Executrix nominated in the Will;

2.8 a completed and signed “Acceptance of Trust as Executor” (in duplicate);

2.9 an “Inventory” detailing the assets of the deceased and the estimated gross value of each asset or asset group.

3. On receipt of the above documentation and providing everything is in order, the Master will issue formal “Letters of Executorship” (similar to the “Grant of Probate” in the UK) reflecting the estate number, the date of issue and the details of the deceased and the Executor.

(In the event that the gross asset value of the estate is less than R250 000 the Master will, instead of Letters of Executorship, issue the nominated Executor/Executrix with “Letters of Authority” in terms of Section 18(3) of the Act, which entails a much shorter and less formal procedure than the one described in this article.)

4. The process up to this stage can take anything between 1 week and several months depending on various factors, the details of which will be discussed in a separate article.

5. Once in possession of the Letters of Executorship, the Executor has to:

5.1 publish a notice in the Government Gazette and in a newspaper circulating in the area in which the deceased had ordinarily resided prior to his/her death, calling upon creditors of the estate to lodge their claims and upon debtors to pay their debts to the estate within 30 days from date of publication of the respective notices;

5.2 open an estate bank account into which all cash of the estate has to be deposited;

5.3 register the estate with SARS;

5.4 commence with his/her duty to liquidate the estate in accordance with the stipulations contained in the Will. This may entail, among others,

5.3.1 the acquisition of valuations (in some instances, sworn valuations) of assets;

5.3.2 the sale of certain or all assets;

5.3.3 writing to various institutions in order to obtain balance certificates pertaining to cash investments;

5.3.4 collection of the proceeds of all cash investments;

5.3.5 contacting life assurance companies to claim the proceeds of any policies.

6. The liquidation process has to be completed within approximately 5 months as within 6 months from the date on which the Letters of Executorship were issued, the Executor is compelled to lodge with the Master a comprehensively detailed Liquidation & Distribution Account (“L & D Acc”) reflecting, among others, the gross asset value of the estate, the total liabilities, the administration costs, the manner of distribution of the net assets among the beneficiaries and an estate duty calculation.

7. When submitting the L & D Acc to the Master,

7.1 it has to be accompanied by,

7.1.1 proof of publication of the notices to creditors and debtors of the estate (5 above);

7.1.2 proof of the opening of an estate bank account (7 above);

7.1.3 a formal Estate Duty return on SARS Form REV267;

7.2 a copy of the L & D Acc has to be forwarded to SARS.

9. Once satisfied with the L & D Acc, the Master will consent to publication of notices by the Executor, once again in the Government Gazette and a local newspaper, to the effect that a copy of the L & D Acc will lie for inspection by the public for 21 days at the Master’s Office and at the Magistrate’s Court within whose area the deceased had ordinarily resided during the last 12 months of his/her lifetime.

10. It is seldom that objections are raised against the L & D Acc but it is possible.

11. Once the 21-day period (9 above) has lapsed and no objections were raised against the L & D Acc, the Master will instruct the Executor to distribute the assets to the beneficiaries in accordance with the L & D Acc and to provide proof thereof to the Master.

12. During this time, immovable property, among others, will be registered in the names of the beneficiaries in the applicable Deeds Office, a process that normally takes approximately 2 months. Similarly, motor vehicles and fire arms will be formally transferred to the beneficiaries thereof.

13. On receipt of proof that the estate has been distributed according to the deceased’s will, The Master will advise the Executor in writing that its file is being archived on receipt of which the estate will be deemed finalized.