By Fezekile Dhlamini
Introduction
After anyone dies, it is necessary for someone else to take control of the estate of deceased, to give dignity to the financial affairs of the deceased, and to ensure they are handled according to his/her wishes and according to the prescripts of the law. This aspect is known as the administration of deceased estates.
Appointment or Nomination of an executor or estate representative
We are all entitled to execute a Will setting out our final wishes and instructions, essentially identifying what is to happen to our assets and financial affairs when we die. This is known as freedom of testation. Where the deceased has a valid Will, the executor (if a male) or executrix (if a female) of the estate will be named in the Will and will administer the estate in accordance with the Will. If, however, no executor has been named in the Will, or the appointed executor cannot perform his/her tasks, or the person dies without a valid Will, then the Master of the High Court appoints an executor to oversee the administration of the estate.
Where there is no Will, those who wish to be considered by the Master as the executor need to convince the Master as to why they should be nominated by submitting a Form J192 Affidavit giving the reasons for appointment. The Master will appoint someone who stands to inherit from the estate (usually the closest beneficiary such as a spouse, child or parent). Once nominations are submitted, all the beneficiaries must sign a form consenting to the appointment of the executor. If there is a dispute amongst them, the Master will appoint joint executors.
The executor’s fees may be a maximum of 3.5% of the gross value of the assets in the estate, and 6% commission on the interest which accrues after the date of death. This fee can be negotiated.
NOTE: If the estate of the deceased is worth less than R250 000.00 it is not necessary to appoint an executor. The Master will appoint an Estate Representative, otherwise known as the administrator of the estate.
Duties and responsibilities of the executor/estate representative
The administration of an estate can be very complex, and each estate presents unique circumstances. Where an executor is faced with a complex estate it is advisable that he/she seek legal advice from a professional. The executor will then give authority to this professional to attend to the winding up of the estate on his/her behalf, and the fee referred to above will be paid to the professional.
Some of the preliminary duties of an executor are:
To immediately find out if the deceased left a Will and, if so, whether or not it is a valid Will. The validity will be confirmed by the Master of the High Court. If there is no Will or if it is invalid, then the laws of intestate succession will apply.
To read the Will and establish who the beneficiaries are.
To identify the assets and liabilities of the deceased. This includes gathering all documents such as bank statements, policies and other relevant documents. This will be recorded on an inventory form (Form J243). This inventory has to indicate whether the value of the estate is less or more than the R250 000.00 referred to above.
If the estate is less than R250 000.00, the executor can proceed to wind up the estate in an informal manner without the need to advertise the estate or prepare a Liquidation and Distribution account. The executor must sign an acceptance of trust form (form J190).
Documents that the executor needs to apply to be formally appointed in terms of the Will are
the following:
The original Will
The death notice
An inventory- the J243 form
A certified copy of the death certificate
An acceptance of trust form in duplicate
A next of kin affidavit- the J192 form
A reporting affidavit that the estate has not been reported to another Master’s office
A list of creditors
The master will issue Letters of Executorship (if the Estate is greater than R250 000) or Letters of Authority (if the estate is less than R250 000.00) to the person appointed to administer the estate. If the Estate is valued at more than R250 000.00, the executor appointed is required to do the following additional actions:
To place a Section 29 advertisement in the Government Gazette and in the local
newspaper in the district where the deceased resided, to call on all creditors of the
deceased to lodge their claims against the estate within 30 days of the notice.
To ensure that all the assets of the deceased have been identified and valued.
When there is more than R1000.00 in the estate, the executor has to open a bank account for the estate and must deposit all funds received by him in the banking account, and make necessary payments.
To inform financial institutions that had dealings with the deceased, including SARS, about his/her passing.
To determine the solvency of the estate, and whether there is enough money to pay the creditors of the deceased. If not, then the Executor can notify the heirs and sell assets in the estate in order to be able to pay creditors and administration costs.
Should the heirs not want to sell the assets, they can pay the above costs themselves.
Within six months of appointment, the executor must prepare and submit to the Master of the High Court a “Liquidation and Distribution Account” which reflects the assets and liabilities of the estate, the income and expenditure of the estate, and how much is available for distribution to the heirs.
After examination by the Master, the executor must advertise the Account in terms of section 35 for inspection, which must last for 21 days.
If there are no objections to the Account, creditors will be paid and the balance will be distributed to the heirs.
If you have been appointed as an executor and you are uncertain of your duties and responsibilities, you can approach a professional, such as an attorney or an accountant, to assist you in the administration of the deceased estate.
Fezekile Dhlamini is a candidate attorney at the Rhodes Law Clinic
