When a loved one dies, there are a number of things that those left behind have to manage. It is often difficult during this time of grief to understand or know what to do if you haven’t had to sort out an estate before. While there will be an executor of the estate if the person had a will (the government will handle this if there is no will), there are still things that a spouse, partner or children will have to do.
This guide breaks down what you need to do when managing a loved one’s estate.
Preparing for life after your death
While you may not want to think about dying, there are a few things you can do to make the process of managing your estate when you are gone easier on those you leave behind.
Jean Wiese, financial consultant at Ecsponent Financial Services, offers the tips on what you can have prepared and accessible for Ecsponent Financial Services your family members at your death:
- Have your will signed by yourself and two witnesses.
- A letter of wishes to guide your family and executor.
- Draft a living will to guide your family on how to handle difficult situations and difficult decisions. Ensure that your family, doctor, executor, medical aid and other people of importance have a copy of this document.
- Your identity document.
- Your marriage certificate.
- The details of any minor beneficiaries, such as a birth certificate.
- Beneficiaries’ and legatee’s addresses, ID numbers, marriage certificate, birth certificates and other relevant documentation.
- If applicable, your divorced spouse’s name, address and a copy of the final divorce order.
- If applicable, pre-deceased spouse’s name, ID number, date of death and a copy of their will, if available.
- A detailed list of all important documents (make sure someone knows where to find this).
- A detailed list of bank accounts, investments, creditors, and/or debtors.
Winding up the estate
While it may seem daunting, the steps for winding up an estate are set and predictable. According to Old Mutual, “the sequence of events is laid down in law and the process should be reasonably straightforward in the hands of a professional.”
Old Mutual breaks the process down into the following seven steps.
- At death
The first thing you do after a loved one has died is contact a funeral home. They will assist in arranging the funeral, and will get the death certificate on your behalf. According to Old Mutual, a modest funeral can cost at least R8, 000. However, if you pay for the funeral, you can claim the cost from the deceased’s estate. During this time you should establish whether or not there is a will, and get other documents in order.
- Gather all the deceased’s information
Within two to six weeks following the death, you will meet with the executor of the estate. “When you go to the first meeting with the executor, you should take with you the bank account details, accounts, title-deeds to properties, insurance policy documents and any other documents you can find that pertain to the financial affairs of the deceased,” noted Old Mutual.
- Get the nominated executor officially approved
The executor nominated in the will must apply to the Master of the High Court to be formally appointed, as well as to be granted the necessary powers to administer the estate.
- Public announcement
After receiving the letter of executorship from the Master of the High Court, the executor has to advertise the estate. This is done so that any creditors (who may be people or organisations) are informed of the death and can register any claims they may have against the estate.
The death must be advertised in the Government Gazette, as well as a local newspaper. Creditors have 30 days from the date of advertising to lodge any claims.
- Liquidation and distribution account
The next step is to prepare the Liquidation and Distribution account (L&D account). The executor “accounts for all the assets and liabilities in the estate, sets out the names of the beneficiaries and what their inheritance is in terms of the will, as well as the income and expenditure incurred by the estate from the deceased’s date of death,” explained Old Mutual.
The L&D account is submitted with supporting documents and vouchers to the Master of the High Court. This is required within six months of the date of death. If more time is needed, the executor must apply for an extension. If there are any queries regarding the submission, these must be addressed within the timeframe advised by the Master of the High Court.
- The second public announcement
Once the L&D account is ready, it must also be advertised in the Government Gazette and a local newspaper. In addition, it must be available for inspection for 21 days at the Master of the High Court’s office, and at the Magistrate’s Office in the area where the deceased lived. Anyone can view this document before it is approved by the Master of the High Court.
If any objections are lodged, a second L&D account must be filed, and this again must be made available for public viewing. If no objections are lodged, the Master of the High Court will confirm that the executor may distribute the assets of the estate to the beneficiaries.
- Distributing the assets
The final step in the process is to distribute the assets of the deceased to the beneficiaries. However, prior to this, the executor must obtain a release from the Receiver of Revenue. Old Mutual clarified that the Receiver must be satisfied that all outstanding taxes from the deceased have been paid before permission can be given for the estate to be distributed to the beneficiaries.
Creditors are also paid from the estate before the beneficiaries receive their portion of the estate.
Wiese offers the following parting tips to people when it comes to planning their will and getting their papers in order.
- Ensure that there are no surprises in your will, such as leaving assets to a person unknown by your close family friends.
- If an inheritance is subject to a lump sum payable by the heir, the heir must be informed of this to make provision for this.
- Choose the executor of your estate and any relevant trustees carefully.
- Inform any nominated trustees beforehand so they are not caught off-guard upon your death.
- If you have children, ensure that you appoint guardians.
Finally, managing your assets can be tricky. A certified financial planner will be able to assist in ensuring that your will does comply with legislation and that any bequeaths therein can be implemented following your death.