Explaining the Estate Administration process

The family of a deceased are often confronted with the reality of having to wind up a deceased’s estate after his or her passing. Usually, there is the expectation that this should go quickly, but unfortunately, the reality is that the process is not a quick one. So what is the process to wind up a deceased estate?

The Administration of Estates Act 66 of 1965 (“Act”) distinguish between the winding up of small and large estates. A small estate is regarded as an estate with an asset value of below R250 000. A large estate is an estate with an asset value above R250 000.

When dealing with an estate smaller than R250,000, the process can be fairly simple and quick. A representative appointed in terms of a valid Will or in terms of a nomination by the heirs in the case of an intestate estate will be authorised by the Master of the High Court to wind up the estate. The representative will ensure that all claims are collected, all debts paid and all distributions are made to the beneficiaries.

However, in larger estates, (asset value above R250 000), things work a bit differently. In these estates, an executor is appointed and tasked with the duties of winding up the estate. Such duties of the Executor include:

  1. Applying for the Letters of Executorship from the Master of the High Court.
  2. Once the Letter of Executorship is received, take control of all the assets of the deceased.
  3. Engage with financial service providers to close all the deceased’s bank accounts and open an estate late bank account wherein all estate funds are to be paid.
  4. Provide notice to all debtors and creditors in a local newspaper and the Government Gazette to lodge their claims against the estate within a period of not less than 30 days.
  5. Draft the liquidation and distribution account and submit such to the Master of the High Court for approval, within 6 months from the issuing of the Letters of Executorship.
  6. Place a notice in a local newspaper and Government Gazette advising that the liquidation and distribution account is lying for inspection for a period of not less than 21 days.
  7. Pay all creditors and distribute the estate assets by the provisions of a Will or the Intestate Succession Act 81 of 1987.

 

Again, this all seems relatively straightforward. Unfortunately, the time taken to wind up an estate is influenced by the provisions of the Administration of Estates Act as well as the efficiency and capacity of institutions, like the Master, financial institutions and SARS to do the necessary on their side.

In estates where the deceased has left behind a valid Will, the winding up process can be shortened as the process of nominating an executor is eliminated, and the distribution of the estate assets is outlined in the Will. In cases where there is no valid Will, further delays can be caused by the fighting between family.

So, what can you do to help smooth the process of having your estate wound up?

  • Having a valid Will that covers all of your assets and is clear on how your assets are to be distributed. This is why it is vital to regularly review your Will and update such to ensure that it covers all your assets and aligns with your views on the division of your assets.
  • Keep your estate organized and record your information and assets to help make it easier for your family to provide the necessary information to your executor.
  • Nominate a competent executor in your Will that has experience in administering deceased estates and can deal with the complexities that your estate may have. Particularly where you have corporate assets or equities and even offshore assets, this becomes vital.
  • Foresee areas that could be complex or create conflict and try and address these before you pass away.
  • For family and beneficiaries after the death of a deceased: The best advice is to ensure you cooperate with the executor to assist where you can, and where necessary seek good legal advice when needed.

Burden Swart and Botha Attorneys can help you navigate the legal system and ensure that everything is done correctly and therefore help lighten your burden.