Reporting of an estate

In order to officially appoint an executor, you would need to submit certain documents confirming the death (such as a death notice, inventory, acceptance of trust as executor, and the will, if any) to the Master of the High Court. Once the documents have been examined and the validity of the will has been established, the Master will issue a ‘letter of executorship’ confirming the appointment of the executor.

Letters of Executorship

On receipt of the ‘letter of executorship’, the executor is required to publish confirmation of death notices in the Government Gazette, as well as the local newspaper. These notices are made public to call on creditors to lodge any possible claims against the estate within thirty days of a specified date. In the meantime, the executor will proceed with the valuation of fixed and movable assets, and will also need to obtain information regarding the deceased’s investments. Following the above, the executor needs to establish whether the available funds are sufficient to cover liabilities. If not, the beneficiaries must be consulted on how they propose to meet the cash shortfall. If they are unable to assist, the executor is duty bound to sell some assets to cover the shortfall. This may lead to prolonged negotiations. At this point, the executor needs to establish the income tax position of the deceased by submitting via an estate practitioner the necessary returns to the South African Revenue Services (SARS).

Liquidation and Distribution Account:

Depending on the extent and complexity of the estate, it can take up to six months of preparatory work before the liquidation and distribution account can be drafted. Unless an extension has been granted, the executor is compelled, in terms of the Estates Act, to lodge an account with the Master within six months of the date of his/her appointment. As soon as all the information has been collated, the executor drafts a liquidation and distribution account, which lists all assets, liabilities and administrative charges and also illustrates the distribution of assets and whether estate duty is payable or not. The account is then submitted to the Master and examined by officials of the Master’s Office to ensure that it meets all the legal requirements. The Master may call for further information and vouchers (such as receipts of valuation reports and claims lodged against the estate) by means of a query sheet. Once the Master is satisfied with the account, the executor must make the account available for inspection by interested parties for a period of at least 21 days. To comply with this requirement a notice is placed in the Government Gazette and a local newspaper, stating the dates and venues where such an account may be inspected. Interested parties may lodge objections to the account with the Master during the advertised period. If no objections have been lodged, the executor may proceed to finalise the estate. The executor will pay creditors, deliver inheritance to heirs, and arrange for the transfer of fixed property. The transfer process is normally time-consuming, as specific legislation applies. Once the Master receives confirmation that creditors (including SARS) have been paid, all heirs have received their inheritance, and the property has been transferred, the estate is regarded as finalized and the executor can request a filing slip for the Masters office.

Legislation applicable

In South Africa, it is primarily the Administration of Estates Act of 1965 that governs the administration of deceased estates. The procedures described above are based mainly on the provisions of this Act.

Factors that could delay the administration

• Absence of a will, or no nominated executor
• Missing information and delays in obtaining evidence for completion of tax returns
• Missing documents and lack of information
• Shortage of cash
• Liquidation of business interests
• Disputed claims
• Faulty, unpractical, or outdated wills
• Estate Duty
• Cessation of limited rights such as usufructs
• Delays in obtaining information/documents from private and state institutions
• Disputes and discord among heirs
• Delays at institutions involved e.g. Master of the high court, SARS, etc

You are welcome to contact Fanus Jonck (fanus@jonck.net) with your Estate queries.