wills and administration of estates

Why do we need a Will? Is my Will up-to-date? Does Estate Duty apply to my Estate? What happens if I don’t have a Will?

These are Questions which we often hear from our clients. There is a saying ”there is nothing as certain as death and taxes” and if a family is caught unawares by a sudden death and one’s affairs are not regulated by a properly drawn up Will, all sorts of legal and financial difficulties may follow. At Milton’s Matsemela, we draft your Will and properly advise you on the consequences of your decisions. Do not put off drafting this critical document.

A deceased estate comes into being when a person dies leaving property. If a will has been left, the property must be disposed of in terms of this written instruction and , if not, in terms of the Intestate Succession Act. The nominated Executor should come to us for advice as soon as possible as the Estate should be reported within 14 days of death. We will assist the executor with the three main phases of the administration of a deceased Estate.

1. Reporting the Estate and Appointment of the Executor
2. Advertising, settling of debt and collecting information to set up the so-called Liquidation and Distribution account.
3. Filing the Liquidation and Distribution Account(s) and finalization of the Estate.

Executor’s Remuneration is determined by a tariff in terms of the Administration of Estate’s Act calculated at 3.5% of the gross value of the assets as of date of death. If a person leaves assets of less than R250 000,00 we will assist the Executor with a less formal procedure.

1. Why a will is important

   The topic of death is an uncomfortable one for all of us and has made the idea of drawing up a Will something we easily put off for years. However, it is important that the assets you have worked hard to acquire in your lifetime are distributed according to your intentions and that your wishes are honoured.

   The winding up of an estate can be a complicated and lengthy process, and when done incorrectly, it may lead to costly setbacks. Provide peace of mind to yourself, as well as your loved ones, that your estate is being administered by people with the requisite knowledge that ultimately save you from delays and penalties.

2. Executor: who can be an executor and what is expected of an executor

   This appointment is important as the Executor would be a person or institution appointed by a testator to carry out the terms of their will.

   The Executor reports the estate to the Master of the High Court and ensure compliance with all legal requirements.

   The Executor is responsible for managing the estate, including settling debts, collecting and distributing assets, and handling any legal matters that arise during the probate process.

   Typically, the Executor may be a bank, attorney, accountant, or another individual knowledgeable about estate management.

   In the absence of a Last Will & Testament, the beneficiaries or the Master of the High Court have to nominate an Executor.

3. What to do when a loved one passes. Immediate steps

   Losing a loved one is one of the most difficult experiences we face in life and in the midst of grief, it can be challenging to know what steps to take next.

   If the death is sudden or even expected, one feels numb and disorientated. Sadness and intense grief follow soon afterwards.

   Here’s a guide to help you navigate what to do next

   If the death occurred at home or if the circumstances are unclear, SAPS will need to investigate and establish if the death is natural or unnatural, the latter being due to an accident, self-harm or potential foul play.

   If the death occurred whilst the deceased was a patient in a hospital or was living in a retirement home/assisted living facility, the staff will handle the necessary procedures and will typically have all the information of the next of kin and the preferred funeral home.

   Initial steps – phone calls

   3.1 Call the paramedics or an ambulance service to confirm the death

   3.2 Call the Police – if the death occurred at home or the death was caused by any kind of trauma, violence, self-harm, foul play or accident. If it seems to be an unnatural death, SAPS will arrange for the body to be transported to a State Mortuary for a post – mortem. An autopsy need not be done if the death was caused by natural causes.

   3.3 Contact a funeral home – they will coordinate the removal of the body of the deceased once authorities have completed their obligations. They will also notify the Department of Home Affairs about the passing and assist in obtaining a Death Certificate. You will receive important forms, including the Notification of Death form (BI663) completed by the undertakers, and the attending doctor’s report which may be required for legal purposes.

   3.4 Contact someone to come and be with you for support & comfort.

   3.5 Inform the next of kin.

   3.6 if you are responsible of taking charge immediately after the death of someone who lived alone, remember to take care of pets, empty the fridge, empty rubbish bins, securing the residence, switching off amenities, i.e. electricity, water, gas etc.

4. Reporting a Death (Home Affairs)

   The death would be reported by the funeral home who would assist you obtaining a Death Certificate, Notification of Death form and other documents you will need.

   It is advisable to report the death within 14 days following the death, but it is good to start the Estate process as soon as you can. This step is crucial for any estate and legal matters that may arise.

5. Reporting an Estate

   All Estates are now reported on the Department of Justice’s online system except where the Deceased did not have a South African ID Book.

   Once an Estate is reported on the online system, the system then logs onto the Home Affairs’ website as the Department of Justice needs to know that the person is indeed deceased and which the Home Affairs will be able to confirm as they would have issued the Death Certificate to the funeral parlour.

   The executor appointed in the will, or his agent reports the estate to the High Court.

   Documents needed to report and Estate:

   Gathering the Necessary and Essential Documents for Estate Administration, you will need:

   1. ID of the Deceased: A copy of the deceased person’s identification is required to establish their identity and ensure that the estate can be properly administered. This can include a Birth Certificate, Driver’s License, or National ID book or card.

   2. Death Certificate: The Death Certificate is an official document issued by the Dept of Home Affairs that confirms the individual’s passing. It is required by financial institutions, Courts, and other entities involved in the estate administration.

   3. Last Will & Testament: If the deceased has left behind a Last Will & Testament, this document will outline their wishes regarding the distribution of their assets and appoint an Executor.

6. Information and documentation the executor will need to wind up the estate

   Click on link

7. Winding up of an estate explained in 11 steps

   Executor’s Obligations in Estate Administration (valued over R250,000)

   When appointed as an Executor for an estate valued at more than R250,000, there are specific legal obligations and procedures to follow to ensure proper administration. The following 11 steps outline the process:

   7.1. Apply for Letter of Executorship: The Executor or their representatives (attorneys, accountants, or banks) must report the estate to the Master of the High Court. The Master will issue Letters of Executorship, which includes the Executor’s name and an estate reference number. This document is essential, as no further actions can be taken without it.

   7.2. Open an Estate Bank Account: An estate bank account needs to be established to manage the financial affairs of the estate. All funds owed to the estate, including income and incoming payments, must be deposited into this account. This account will be opened by the person who will be attending to the winding up of the estate.

   7.3. List All Assets and Liabilities: An inventory must be compiled detailing everything the deceased owned (excluding household effects and furniture of no commercial value). This includes financial accounts (such as loans, investments, and insurance policies), movable and immovable property, and any outstanding debts.

   7.4. Close Bank Accounts in the Name of the Deceased: Take the Death Certificate and if possible, the Letters of Executorship to the bank when advising them of the death and ensure provision has been made for new debit- and stop orders (i.e. DSTV, Medical Aid etc). Some banks don’t do anything until they receive the Letters of Executorship. Once reported, all personal bank accounts held by the deceased will be “frozen”/closed to prevent any unauthorized transactions post-mortem.

   7.5. Report the Deceased Estate to SARS: The Executor is required to inform the South African Revenue Service (SARS) about the deceased’s estate, ensuring that all tax obligations are accurately reported and addressed.

   7.6. Place Advertisements: Notifications must be placed in the local newspaper where the deceased lived, as well as in the Government Gazette. This serves to alert creditors and debtors, giving them 30 days to come forward with any claims against the estate.

   7.7. Prepare Liquidation and Distribution Account (L&D Account): This entails a detailed account of the estate’s assets, liabilities, and a proposed distribution plan for the beneficiaries. The L&D Account should reflect how the estate will be distributed according to the Last Will and Testament or, if no Will exists, according to the Intestate Succession Act.

   7.8. Submit L&D Account for Approval: After the 30-day notice period, and once all debts have been settled and funds have been deposited in the estate account, the L&D Account can be updated, submitted, and lodged with the Master of the High Court for approval.

   7.9. Public Notification of L&D Account: Upon receiving approval from the Master, the L&D Account must be advertised again in the legal column of the local newspaper and in the Government Gazette for 21 days. This public disclosure allows creditors and heirs to review the document and contest any claims not represented.

   7.10. Pay Outstanding Debts and Claims: The Executor is responsible for ensuring that all debts and legitimate claims against the estate are settled.

   7.11. Distribute Remaining Assets: Once the 21-day period has elapsed and the Master has confirmed there are no objections, the remaining assets can be distributed to the beneficiaries in accordance with the Will or intestacy laws.

   The entire process of winding up an estate typically takes between 8 to 12 months but may extend beyond this timeframe depending on the complexity of the estate, necessary documents not received, potential delays at the Master of the High Court, or other factors such as advertising periods, any objections raised, and SARS.

   Printable version, click here

8. Transferring Property out of an estate

   Estate transfers do unfortunately take longer, as the timeframe is largely dependent on the Master’s Office. These delays are outside of the conveyancers’ control and can be unpredictable, depending on staffing capacity and other factors relating to the Estate.

   Rates clearance figures and transfer duty can only be applied for once the Master’s consent has been issued.

   The following documents will be required to proceed:

   1. Letters of Executorship
   2. A copy of the Last Will and Testament. Where there is no Will, a copy of the Next of Kin Affidavit will be required
   3. Copies of the heirs’ identity documents and marriage certificates (please note that FICA compliance is not required for heirs)

   8.1 Transferring a property out of an estate to an heir

   Property can only be transferred once the Liquidation and Distribution (L&D) account has been finalized.

   No Transfer Duty is applicable. All other applicable fees will be paid by the estate.

   8.2 Transferring Property where the estate is the seller

   Executor has to sign all documents

   Written Consent by all heirs needed

   Master’s consent needed

   The property may be sold once 30 days have passed since the advertisement notifying creditors and debtors, allowing them sufficient time to present any claims against the estate.

   Buyer to pay transfer duty, transfer fee and all relevant costs relating to the transfer of the property.

9. Checklist to complete beforehand

   To be pro-active, you can complete this checklist to ensure your loved ones know exactly where to locate important information, documents, original registration papers, certificates, and any other materials the executor will require to settle your estate. Keep it in a safe place or add to your original Last Will & Testament. For security purposes, consider storing PIN codes and passwords in a secure location that your next of kin can access if needed. It is not recommended to write these details directly on this form.

   Printable version of checklist