To offer your family peace of mind when a loved one passes away, the specifics of their estate must be handled correctly. The administration procedure ensures that all the provisions of his or her last will, if any, are properly carried out. Due to the differences in each person’s assets, family preferences, and circumstances, the procedure itself is extremely technical. As a result, estate management typically calls for specialized knowledge. By seeking our professional assistance, you can identify problem areas, investigate solutions, and achieve the peace of mind that comes from knowing that you have done everything possible to streamline your financial affairs and ensure that your will is a sound legal document. Our procedure comes in six steps you can follow for executing on deceased estate.
Check the will to see if there are any instructions for the executor and beneficiaries. Analyze divorce settlements and other legal commitments that have an impact on the estate. Afterwards, you should compile any paperwork pertaining to the decedent’s estate. While some originals must be shown, certified copies will do in other cases. Make a rough inventory of your assets and liabilities. According to the conditions and the deceased’s will, the potential executor must choose and complete the forms needed by the master’s office. Send the paperwork to the master’s office. Once the master has processed the application, you should obtain the original letters of executorship from the master’s office.
Advertise for creditors to file claims within 30 days in the Gazette or media. Open a bank account for your estate. Take charge of the estate’s funds and manage the estate. Determine the financial situation and register the decedent’s estate with SARS. During this period, take care of any minor children or other people.
Examine the estate’s financial situation and assemble a final Liquidation and Distribution Account. Submit the L&D to the master’s office for approval. The master gives a “permission to advertise” letter, noting any pre-conditions before advertising as well as any potential conditions that may arise later in the process.
Once the master has authorized the liquidation and distribution, advertise it for inspection within 21 days by posting advertisements in the gazette and local newspaper and sending it to the local magistrate with a cover letter. After 21 days, you should obtain a certificate from the magistrate indicating that no complaints regarding the liquidation and distribution were made.
Complete the final tax returns and receive release from the receiver by applying for a “compliance” letter stating that no taxes are owed.
Provide documentary evidence of distributions per liquidation and distribution to the master, and the master will issue a discharge document to the executor.
No, where the registered owner of immoveable property has died, their property/house will need to be transferred to another person – usually a family member. Assets in the name of the deceased will have to be transferred to the heirs of the Estate to be able to close off an estate and obtain the filing slip from the Master of the High Court, according to the deceased Administration Act. The Master of the High Court appoints an executor to administer the deceased estate. The Executor is the only person who is lawfully authorised and therefore, allowed to deal with the assets of the deceased. This is done to make sure of the orderly winding up of the financial affairs of the deceased, and the protection of the financial interests of the heirs. Immovable Property can be sold by the Executor of the Deceased Estate directly to a Third-Party Purchaser should the beneficiaries consent thereto. The Executor will be required to sign the Offer to Purchase/Sale Agreement on behalf of the Deceased Estate and in due course sign the transfer documents, also in such capacity. The Conveyancer will need to obtain a Section 42 (2) Administration of Estates Act Certificate from the Master of the High Court where the Estate was reported, to certify that the Master has no objection to the said transfer. The costs of the transfer, including transfer duty, would normally be payable by the Purchaser. The Estate would carry the costs of obtaining Rates and Levy Clearance Certificates valid until after registration. The Estate would also carry the costs of cancelling any bonds registered over the Property.
Yes, if the deceased has any assets (at least R 1 000) which need to be administered then as per the Administration of Estates Act 66 of 1965, an Estate Late bank account will need to be opened.
In general, when an individual passes away and bequeaths their entire estate to their Surviving Spouse, no Capital Gains Tax is payable. If the Surviving Spouse is inheriting the immovable property (house) in the Estate, then the Estate will also not be levied with Capital Gains Tax. However, if anyone else other than the Surviving Spouse inherits from the Estate then Capital Gains Tax, Estate Duty and Donations Tax (if applicable for donations) will be levied.
The Executor of the Estate is required to disclose and submit the Capital Gains Tax calculation together with proof of documentation to the South African Revenue Services (SARS) as part of the deceased individual’s annual income for the financial year in which they passed away. SARS will then assess the calculation and documentation submitted and then confirm the amount of Capital Gains Tax that is payable by the Estate.
Yes. The Executor of the Estate is responsible for lodging the tax returns for both the deceased individual, as at the time of their death, and for the Estate, from date of death to when the Estate is finalised. The Executor of the Estate has an obligation to make sure that all tax returns of the deceased are up to date with the South African Revenue Services (SARS). NB: If the deceased was a pensioner at the time of death or even a few years prior to date of death, the tax returns have to still be completed and submitted to SARS in order for SARS to advise the Executor that the taxes are in order and will provide the Executor with a Tax Compliance Certificate for the Estate (TCC).
Application for the Letter of Executorship/Authority needs to be made at the Master of the High Court in the province where the deceased lived during the 12 months preceding his/her death. Should the estate value be more than R 250 000 the Master of the High Court will insist that a Professional Body such as a Bank or a Trust company (known as fiduciary service providers) assist with the administration as there are certain requirements that need to be met to finalise the estate.
The Estate of a deceased person must be reported to the Master of the High Court within 14 days of the date of death. The death should be reported by any person who has control or possession of any property or documents (usually Trust company) that is or intends to be the Will of the deceased individual. The Estate is reported by lodging a completed death notice and other documents with the relevant Master of the High Court.
You can prove you are the Executor of an Estate by using the Letter of Executorship/Authority, as granted by the Master of the High Court. There are two manners through which someone can be nominated to become an Executor:
When an individual passes away, you need to notify the Master of the High Court in the deceased’s jurisdiction of domicile within 14 days after the notice of death. To then proceed to opening an Estate Late bank account, requires a Letter of Executorship (LoE) or Letter of Authority (LoA) as issued by the relevant Master of the High Court. A LoE needs to be issued for Estates with a gross value over R250 000 and an LoA needs to be issued for an Estate with a gross value of less than R250 000. Documents required for the Letter of Executorship / Authority by the Master of the High Court include (as relevant):
The estate administration process is often known as “Winding up of an estate”. An Executor, as appointed by the Master of the High Court finalises an Estate after someone passes away. If you have been nominated as the Executor in someone’s Will but lack the expertise to finalise the Estate the Master of the High Court may instruct you to solicit the services of a company or professional who can assist. Some of the options are then for you to either renounce your role as Executor or remain as the Executor and nominate a company or professional to act under Power of Attorney on your behalf. It is, therefore, recommended that you nominate a professional in your Will to act as Executor.
This is difficult to specify as every Estate differs depending on the challenges unique to the Estate. At Capital Legacy, our business rule is to try and finalise an Estate within nine (9) months. Although we do achieve this, we need to regulate expectations and state that Estates with many challenges may take longer to finalise. In some instances, an Estate cannot be reported to the Master of the High Court due to factors such as missing/unsigned documents and cause of death. If this is the case, the Master of the High Court will not issue a Letter of Executorship (LoE) or Letter of Authority (LoA). The Estate cannot be administered until an LoE/LoA is issued.
Under normal circumstances, the Master can take up to 6 weeks to issue an appointment letter provided that all the correct and relevant documents have been submitted. At Dweba Attorneys, we ensure that this gets done right the first time. We endeavour to obtain the court appointment within 7 days after lodging the application.
If an Estate has a shortfall, the Executor will either sell assets to meet the financial requirements or the heirs will pay the shortfall to preserve the assets, such as property, for the assets to be transferred to them. However, an Estate that does not have enough assets to pay for all the debts will be declared as insolvent, and the beneficiaries will not inherit anything.
