Have you ever wondered what happens to your belongings once you die? Perhaps your loved ones will clear out your apartment, or your landlord will gain possession of what’s left behind.
We find out who should be involved in wrapping up your estate, or your remaining assets, once you pass away, and which steps they should follow.
Tip: Consider taking out life cover so that your loved ones are taken care of when you’re gone.
Who exactly wraps up your estate?
According to Matlhodi Leteane, head of operations at FNB Fiduciary, there are two ways in which a deceased person can be classified in terms of their estate:
- Testate – having executed a valid will, or
- Intestate – without a valid will.
She explains that in either case, their estate must be wound up according to the Administration of Estates Act.
“The Act prescribes a series of successive activities to ensure that the assets of the deceased are known, their value as at death, the creditors of the estates, what they were owed by the deceased, the beneficiaries of the deceased, and what they are entitled to receive if there was a will,” says Leteane.
She explains that these activities must be carried out under the supervision of the master of the High Court. The parties involved in the administration of a deceased estate include:
- The executor, nominated in the will of the deceased and the appointment confirmed by the master of the High Court.
- The South African Revenue Service (SARS) for the collection of any taxes that the deceased or their estate owed up until their date of death.
- Creditors of the deceased estate who are still owed amounts.
- The beneficiaries of the deceased, which in some cases, depending on the instructions that are left in the will, may not be family of the deceased.
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Which steps will be taken to wrap up your estate?
Leteane outlines the following steps that are followed in the administration of an estate:
- Meet with the family of the deceased to obtain information pertaining to the will (if not kept in safe custody with the bank) and lists of assets and liabilities.
- Reporting the death to the master of the High Court, and this report must include the furnishing of the original will to the Master, together with supporting documents.
- The master of the High Court will issue a Letter of Executorship to the executor nominated in the will (if the deceased died testate). In the case that the deceased dies without a will, the family members are appointed as executors (if certain conditions are met). If not, the Master will appoint a professional executor.
- The executor must advertise in the local newspaper that the deceased has died and that any creditors of the estate must come forward and claim what is owed to them. This is done against the documentary proof.
- The executor will also have to collate the liabilities of the estate as well as assets, and determine whether the estate is solvent.
- If the estate is solvent, the process will continue with the executor drafting a liquidation and distribution account.
- The executor will then submit the liquidation and distribution account to the master of the High Court for approval.
- Once the Master approves the liquidation and distribution account, the executor will pay the creditors (including SARS) and the remainder of the estate will be distributed to the beneficiaries of the deceased.
- The executor will then submit to the Master proof that the estate was administered according to the law and the provision of the estate, and also submit all the documentary proof to the Master and ask for a discharge from the duties as executor.
- Once the Master is happy that the administration of the estate was done according to the law and the will, they will issue a discharge to the executor and the estate may be closed.
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