Steps to Administer a Deceased Estate
Key Takeaways:
Administering a deceased estate involves legal and procedural steps.
Tasks include obtaining a death certificate, appointing an executor, and managing assets and debts.
Professional guidance from an attorney ensures compliance and effective estate administration beyond a dignified burial.
Step by Step Process in the Administration of a Deceased Estate
The process of administering a deceased estate is quite involved, and this discussion will attempt to outline the general step by step overview of the processes in the administration of a deceased estate with a threshold value of over R250 000.
Few experiences in life can compare to the loss of a loved one, the sombre feeling can take years to come to terms with for other people. It is indeed a very difficult time for most. This is why many deem it important to give the deceased a dignified send-off in celebration of their life. What remains would be the responsibility to ensure that their estate is administered as dutifully as they would have done themselves had they been alive.
Where the deceased passed away having executed a valid Will in terms of the Wills Act 7 of 1953 (testamentary succession), the situation is usually without hurdles as the distribution of benefits to the heirs will follow the directions of the Will itself. In as much as there are instances where the validity of the Will is challenged by an interested party, the Golden Rule of Testamentary succession is that the wishes of the testator must be given effect to (as long as they are legal and not against public policy). In the case of Katz and Another v Katz and Others 2004 (4) All SA 545 (C) the validity of a Will was unsuccessfully challenged on the grounds of undue influence, as the Courts did not find sufficient proof thereof. Similarly in the case of Spies v Smith 1957 (1) SA 539 (A) a Testator had revoked his first Will. In the subsequent Will he changed the beneficiaries from the two daughters of his step mother to the children of his uncle. Upon his death, the stepmother challenged the Will citing undue influence on the deceased by the uncle. The Court adjudicated on the matter and dismissed the challenge. The two cases emphasise the approach of the Courts in ensuring that the wishes of the Testator are given effect to in Testamentary succession.
On the other hand, where the deceased passed away without a valid Will in place, the administration of their estate will happen Intestate as governed by the Intestate Succession Act 81 of 1987. This legislation provides rules for succession where the deceased did not leave a valid Will at the time of death.
Administration of deceased estates in South Africa is governed by the Administration of Deceased Estates Act 66 of 1965, which contains a framework of administering deceased estates. The process of administering a deceased estate is quite involved generally speaking, and this discussion will attempt to outline the general step by step overview of the processes in the administration of a deceased estate with a threshold value of over R250 000.
1. Reporting the Estate to the Master of the High Court
The first step is reporting the estate to the Master of the High Court within whose jurisdiction the deceased ordinarily resided at the time of death. This must be done preferably within 14 days from death. There are various forms and documents which must be completed, signed and lodged with the Office of the Master and only upon all required documents being lodged with the Master’s Office, will the Letter of Executorship be issued to the entity nominated or chosen as the preferred Executor.
An Executor may be chosen in a Will by the Testator, or by the Heirs where the deceased did not leave a valid Will. Depending on different factors behind the Master’s desk, this letter may be issued within 2-3 weeks from date of successful lodgement of all required forms and documents.
2. Publishing of a Notice in the Gazette and newspaper
Section 29 of the Administration of Deceased Estates Act (as amended) provides that as soon as possibly can after the Letter of Executorship is issued, the appointed Executor must cause a notice to be published in the Gazette and, in at least one newspaper circulating in the district where the deceased ordinarily resided at the time of death.
The purpose of such notice is to call upon debtors and creditors with claims against the estate of the deceased to lodge their claims for consideration within a period of not less than 30 days from latest publication.
3. Taking Control of the Assets in the Deceased Estate
The Executor then attends to taking control of the assets in the deceased estate, requesting certificates of balances from creditors and debtors, closing bank accounts of the deceased and opening a Late Estate Account, valuation of both movable and immovable assets as well as attending to the gathering of amounts in favour of the estate. These amounts may include Provident Fund Benefits, Life Insurance payouts, Funeral Benefits, known liquidated debts against Third Parties etc.
4. Drafting Liquidation and Distribution Account
Having gathered all information with regards to assets, liabilities and attending to the aforementioned in 3 above, the Executor will then be required to draft a Liquidation and Distribution Account for lodgement with the Master of the High Court. This account outlines how the estate will be distributed and is required within 6 months since the issuing of the Letter of Executorship, or within such time as may be allowed by the Master in each circumstance.
5. Lodging the Account with the Master of the High Court
The Liquidation and Distribution account will then be lodged with the Master, who will assess it and if all is in order, approve it to lay in inspection for 21 days. An advertisement, as per Section 35 of the Administration of Deceased Estates Act, must be caused to be published notifying interested parties that the account will lay for inspection and any objections may be lodged with the Master should any party wish to do so. The account must also be made available for inspection at the Magistrate’s Court nearest to where the deceased ordinarily resided. Upon the lapse of the 21 day period, the Master will notify the Executor should there have been any objections and if not, distribution may then proceed.
6. Distribution of the Deceased Estate
In the event that there are no objections to the Liquidation and Distribution Account after the 21 day inspection period, the Executor will then be required to distribute the inheritance accordingly. Debts and liabilities against the deceased estate are settled and closed. The Executor must also attend to any Tax obligations that must be settled so as to obtain the tax clearance certificate. These taxes relate to Estate Duty (subject to the threshold as per the Estate Duty Act 45 of 1955), Income Tax, Capital Gains Tax as well as Donations Tax, where applicable.
The assets will then be delivered and transferred to heirs. Transfer takes place in the normal ordinary course i.e immovable property transferred at the Deeds Registry, vehicles at the Vehicles Registry Department, vehicles delivered to heirs etc.
7. Issuing of Filing Slip
When the distribution process is complete, the Executor will then request a filing slip in order to close the file and mark the end of the administration process. Should the Master be satisfied that the distribution was correctly undertaken, the filing slip will be issued, thereby officially closing the file and process.
As evident from the above, the administration of deceased estates is quite an involved process fraught with legal and technical considerations. We assist in a wide array of matters relating to the administration of deceased estates, making it convenient for our clients by clearing the hurdles that are eminent. Contact us and our able Estate Attorneys will comprehensively assist with regards to the administration of estates and a host of other matters.