ESTATE ADMINISTRATION: FULFILLING THE LAST WISHES FROM BEYOND FOR THOSE LOVED ONES LEFT BEHIND

by on 12-01-2017 in News from advertisers

ESTATE ADMINISTRATION: FULFILLING THE LAST WISHES FROM BEYOND FOR THOSE LOVED ONES LEFT BEHIND

 “Maybe the gentle will inherit the earth, but they will need tough guys to be an executor”. 
  An unexpected passing can be shocking and traumatising. Grieving the loss of a precious loved one is not only filled with sorrow, but adds emotional challenges when one has to deal with the finalising of their estate. This is enough to cause anguish due to the complexity that it seems from the outset. The bravest thing one can ever do is to continue to attend to the last wishes of those who have passed on to another life beyond our own.   
  Finalising the estate of a deceased is a process where the estate is to ensure the winding-up of the businesses of the deceased and ensures that their wishes, if they left a will, is carried out properly. This is usually the last act one can do for the dear departed. Depending on the deceased assets, family wishes, the finalising of the estate can be highly procedural and 
intricate and does in some instances require the aid of a specialized individual in the field. 
  The regulation of the deceased wishes is a process accomplished under the regulation of the Master of the High Court which usually involves: 
1. To collect all the deceased’s assets. 2. To collect all debts against the estate and to settle them after their validity has been investigated 3. To divide the balance of the assets among the rightful heirs after all debts against the estate have been paid 
    
At this moment you are feeling overwhelmed at the daunting procedure, but hopefully I can provide a brief guide to assist you in understanding the administration of the deceased estate. 
  When we die, all our belongings and debts immediately form part of our estate. To ensure that your belongings are distributed according to your wishes, you need to ensure that a written will is drafted. This makes the distribution of the estate simpler and easier in that it will assist in limiting uneasiness and cause conflict between the ones you love. 
  NOTIFYING OF THE DECEASED ESTATE AND APPOINTMENT OF AN INDIVIDUAL TO ADMINISTER THE ESTATE 
  When a person dies, the deceased death needs to be reported to the Master of the High Court within 14 days after the death by anyone. After the estate is reported, the Master of the High Court will either issue letter of executorship if the value of deceased estate is more than R250 000.00 or issue a letter of authority if the value of deceased estate is less than R250 000.00. 
    
IF THE DECEASED HAS LEFT A WILL 
  APPOINTMENT OF AN EXECUTOR 
  To assign an executor in an estate, the Master of the High Court must be authoritatively informed of the death. This done by providing certain required documents to the Master. When the Master receives the required documents, he scrutinises them and confirms the extent of the legitimacy of the will. If the will nominated an executor who is living and the Master is content with the documents, he assigns the nominated executor by distributing a "letter of executorship". 
The executor can only legitimately administer an estate upon receiving of the letters of executorship. It is recommended that during the waiting of the letter of executorship to be issued, the executor attains all obtainable material and documented proof to regulate possessions and debts in the deceased's estate. 
If no will is left by the deceased the main heirs of the deceased must in writing advice and recommend an executor of which must be submitted to the Master for consideration. The Master may discard the selected executor's submission for certain reasons and refuse to approve the appointment. 
  SOME DOCUMENTS THAT THE EXECUTOR REQUIRES 
  The executor requires specific documents of the deceased to assist in speeding up the administration process. 
  Here are some examples of the types of documents normally required include: 
Last signed original will (or particulars of where it can be found); Deceased’s identity document; Death certificate; Marriage certificate; Antenuptial contract (if applicable); Name and date of death of any predeceased spouse (if applicable); Divorce order and deed of settlement (if applicable); Copies of identity documents & Copies of marriage certificates of all heirs; Postal addresses and contact particulars of all heirs; Pension number, name and address of pension fund ; Membership number, name and address of medical fund; Income tax reference number and VAT registration number (if applicable); Title deeds ; Vehicle registration certificates ; Unit trust certificates/notices; Any other investment certificates; Mortgage bonds ; Promissory notes in respect of loans owed to the estate; Credit cards and any other bank cards ; Life insurance policies, or full particulars ; Short-term insurance policies, or full particulars; Deeds of sale in which the deceased had an interest 
    
These are just some documents but the list can be further exhaustive. 
  Estate Administration procedure 
  There are various steps that need to be followed when administrating the estate where the assets are over R 250 000.00. It can take about 18 months depending on whether there is disputes amongst the heirs. 
1.   Notice to Creditors and evaluating the assets and the liabilities 
After the letter of executorship has been issued, the executor is now in the position to proceed with the process of winding up of the estate. The executor is required to place a notice in the Government Gazette and in one local newspaper which calls on all the creditors of the deceased to lodge their claims against the estate within 30 days. Within this period the executor must open an estate late account in the name of the deceased and must obtain valuations of the deceased assets. The executor, after obtaining the value of the estate, is able to examine and determine if there is sufficient cash to meet the obligations of creditors and other costs that will be incurred in the administration of the estate. If there is not enough cash in the estate, the beneficiaries is usually requested to provide money to cover the shortfall. If the beneficiaries are unable to raise cash to meet the shortfall, the executor will then have to proceed to sell off assets to cover the shortfall. The executor further must further submit the necessary returns to the South African Revenue Services to determine the tax position of the deceased and whether the deceased owes money to the South African Revenue Services. 
2. Liquidation and Distribution Account  
A Liquidation and Distribution Account is then required to be submitted within six months after the issue of the letters of executorship unless the executor applies for an extension and is granted by the Master of the High Court. In the Liquidation and Distribution account, it will be a summary of what assets will be distributed, to whom and who the creditors are as well as what is due to them, administration costs, explains how assets are divided and determines if estate duty is payable. The account therefore sums up the entire administration process. Attending to the Liquidation and Distribution account could take six weeks to six months. 
3. Examination process 
The Liquidation and Distribution account is then submitted to the Master of the Court for examination. The Master may request further information and proof from the executor. This process takes four to eight weeks 
4. Inspecting the Liquidation and Distribution Account 
If the Master is satisfied with the account, the executor has to place a notice in the Government Gazette and in one local newspaper. This notice will state where the account will be open for inspection for 21 day period. If anyone who has an interest in the estate and has an objection to the account, he may lodge an objection with the Master during the 21 day period. 
     The Master refers any objections to the executor for a response. Once the Master has received the executor's response, he will make a decision which must be obeyed by the executor. 
If there are no objections, the Liquidation and Distribution Account phase takes about four to six weeks. 
 5. Finalising the estate 
     If no objections are made against the Liquidation and Distribution Account, or if an objection has been settled, the executor can finalise the estate. The Executor pays the creditors, hands over inheritances to the heirs and arranges for the transfer of fixed property in the names of those entitled to it. The process of transfer can take some time, as there are various legislative requirements to be met. 
     As soon as proof has been provided to the Master that all creditors have been paid, that the heirs have received their inheritances and that the fixed property has been transferred, the estate is regarded as finalised and the executor's duties come to an end. 
The process of finalisation takes four to eight weeks. 
6. Costs involved in the Administration of Estate 
 Master Fees depending on the value of the estate is subject to a maximum fee of R 600.00  Executor is entitled to 3.5% on the gross value of the estate assets and 6% on all incomes collected on behalf of the deceased.  Valuation costs of assets is calculated on a scale determined from time to time by a sworn appraiser which can be appointed by the Master  Advertising costs  Security costs is required by the Master where the executors does not qualify for an exemption. Usually the will would stipulate that the named executor is exempt from providing security  Estate bank account charges  Transfer costs of fixed property  Cancelation costs of bonds registered over fixed property  Funeral costs which is made as a claim against the estate 
   
If the Deceased Left no Will, or the Value of the Estate is BELOW R 250 000.00 
  
If no will is left by the deceased, it makes the winding up of the estate very difficult in establishing who is entitled to inherit. 
If the estate is below R 250 000.00 the process is less complicated and there is no need to appoint executor or report the distribution of the inheritance. The master will then issue letters of authority which provides the person to proceed to wind up the estate without reporting to the Master. 
  
As hard as it is to say goodbye, the last acts one can do is to fulfil the wishes of the dearly departed. Attending to their deeds left undone is one way to fulfil their wishes. 
“The bitterest tears shed over graves are for words left unsaid and deeds left undone” (quote by Harriet Beecher Stowe) 

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