Administration of estates (Part 2): After reporting the estate
In part one of our series discussing the administration of deceased estates, we dealt with the steps involved in reporting the estate. Once these steps have been concluded, and the deceased estate was reported to the Master’s office, the following is needed for further administration of the estate:
- Letters to debtors and creditors.
Letters will need to be sent to all debtors and creditors of the estate, known to the administrator at the time, in order to determine claims for and against the estate.
- Valuations of assets and liabilities.
The value of estate assets and liabilities needs to be determined to prepare the Liquidation and Distribution account.
- Completion and submission of an income tax return.
SARS is an ever-present obstacle when administering an estate, much like a speeding fine, SARS will need to be attended to at the most inopportune times. When a person dies, they are no longer a taxable person, but their estate becomes a new taxpayer and is therefore liable for income tax, estate duty, capital gains tax, etcetera. For that reason, the deceased’s final income tax return must be submitted to SARS as well as the returns of the deceased estate.
- Receipt of letters of executorship.
As per section 13 of the Administration of Estates Act 66 of 1965 (AEA), letters of executorship empower an executor to liquidate and distribute a deceased estate. The letters of executorship will also empower or bestow a duty upon the executor to do the following:
| · Bestow power of attorney | · Claims for maintenance |
| · Control estate assets | · Make interim maintenance payments |
| · Give notice to creditors | · Make advance payments |
| · Submit section 27 inventory | · Request extensions for account submissions |
| · Submit income tax return | · Preparation and submission of the account |
| · Finalise valuations | · Redistribution agreements |
| · Determine the solvency of the estate | · Estate duty return submissions |
| · Liquidation planning | · Section 35 notices |
| · Award assets in specie | · Objections against account |
| · Partial and Total disposal | · Comply with final requirements |
| · Section 38 takeovers |
- Notice to creditors in the Government Gazette and a newspaper.
After the administrator has received the letters of executorship, they must, without delay, place notices to creditors in the Government Gazette and a local newspaper circulating in the district where the deceased normally resided before their death, in terms of section 29 of the AEA.
Part 3 of our series will further unpack the financial steps in the process like opening an estate account, determining solvency, collecting cash, payment of debts and so forth, so keep an eye on our website and social media for more.
Entrusting this sensitive matter with a professional, legal team who understands the legal requirements while simultaneously handling your assets and loved ones with care and compassion, is in your best interest. Burden Swart & Botha Attorneys do not see your matter as a number. We understand how important this is to you. Contact us and let us help you take care of your final wishes.