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How? Deceased Estates Explained

Updated: Feb 26, 2019


What to do when a loved one dies


The death of a loved one is the inescapable truth of life.


The administration brought about by the death of a loved one can sometimes be overwhelming for the survivors.


Overwhelming because of the amount of administration and overwhelming because the sorrow has not yet passed.


The first fourteen days:

During the first fourteen days after the death of a loved one, much is expected from you in terms of basic administration:

A death certificate must be obtained;


A funeral must be planned;


A funeral must be paid for;


Any Last Will of the deceased must be located; and


The deceased's estate must be Reported to the Master of the High Court ("the Master").


Administration of the Estate:

Once the estate is reported to the Master, an executor will be appointed with the powers and duties prescribed by the Administration of Estates Act.


Laypeople with no experience in the administration of deceased estates will not know where to start and what to do.


Once an executor is appointed, the Estate must be advertised in the Government Gazette as well as one other local newspaper, inviting potential creditors of the deceased to prove claims against the estate.


Thereafter a Liquidation and Distribution Account ("L&D Account") must be drawn up in compliance with the relevant legislation and in accordance with the deceased's Last Will and Testament. The L&D Account must be submitted to the Master within 6 (six) months from the date of appointment of the Executor.


Once the L&D Account is submitted, the Master will consider the L&D Account, and if satisfied, the Master will authorise the advertising thereof in the Government Gazette and one other local newspaper, to lay open for inspection for 21 (twenty-one) days.


When the 21 days have passed and no objection to the L&D Account is received, the Executor can proceed to distribute the Estate in accordance with the L&D Account.


This may all sound very simple and easy, but some steps need to be taken to make all of the above possible:

Inform all financial institutions where the deceased held accounts, of the death of the deceased and request certificates of balance;


If there is not enough cash in the estate to pay the administration costs, assets have to be sold to raise the cash or a family member must advance the cash;


Claims must be assessed and paid;


Assets must be transferred;


Shares in companies must be transferred;


Proper accounting records must be maintained as the Master may request any information about the finances of the estate.


Once the administration of the Estate is finalised, the Executor can request the Master to release him as Executor and the Administration is concluded.


Take Note:

Laypeople are usually sent from pillar to post and find the administration of the estate overwhelming and complex. An executor may, however, appoint an agent to Administer the Estate on his behalf, and that is why so many attorneys and accountants do the administration.


Banks also sometimes act as executor when the deceased signed a Will at the bank, which takes the burden off the survivors' shoulders.


Costs:

There is however an incentive of being an executor and that is the 3.5% executors fee. The executor is paid for his work and 3.5% of the gross value of the estate is the prescribed fee. This fee can, however, result in dire consequences if there is not enough cash in the estate to pay this fee.


Banks are normally not open for negotiation on this fee.


Botha Bezuidenhout Attorneys Inc. are open for negotiation and experience has proved that the administration costs much less if our normal fees are paid instead of the 3.5% of the gross value of the estate. This is also the more affordable solution, as several smaller payments are required as and when a milestone is reached, as opposed to one large once-off amount.


By paying our normal fees, the nominated executor is still entitled to the 3.5% of the gross value of the estate, but the executor can also waive this fee.


Conclusion:

Experience in administration of estates is not easily gained. You have to build a trust relationship with all the parties involved and only then the administration will follow smoothly.


We are always available to assist you with the administration of your loved one's estate.

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