Welcome

ADMINISTRATION

OF

DECEASED ESTATES

COMMON MARKET PERCEPTION

“My friend’s Husband’s estate was finalized in 3 months!”

THIS IS A FALLACY, RIGHT UP THERE WITH THE CHEQUES IN THE MAIL ETC. UNLESS IT IS AN ESTATE UNDER SECTION 18(3) OF THE ADMINISTRATION OF ESTATES ACT THIS IS NOT TECHNICALLY POSSIBLE.

HOW LONG DOES AN ESTATE TAKE TO WIND UP? WELL, HOW LONG IS A PIECE OF STRING?

RESPONSIBILITIES OF THE EXECUTOR

As defined by the Appellate Division in Lockhart’s Estate v North British & Mercantile Insurance 1959(3) SA 295 (AD) :

“to obtain possession of the assets of the deceased including rights of action, to realize such of them as may be necessary for payment of debts of the deceased ,taxes and costs of administration and winding-up, to make payments and to distribute the assets and money that remain after debts and expenses have been paid among the legatees under the will or the intestate heirs on intestacy”

RESPONSIBILITIES OF THE EXECUTOR

• Report estate to Master.

• Obtain letter of Executorship from Master.

• Take into custody the assets of the estate.

• Attend to the statutory requirements of the Administration of Estates Act.

THIRD PARTIES

Who does an executor deal with?

• HEIRS:

1. Local.

2. Non-resident.

• MASTER OF THE HIGH COURT

1.    Registry.

2.    Appointment Groups.

3.    Examination Groups.

THIRD PARTIES

• FINANCIAL INSTITUTIONS:

1.    Banking sector mostly centralized except Standard Bank.

2.    Credit Card Divisions.

3.    Unit trust companies.

 • STOCKBROKERS.• INSURANCE COMPANIES.• TRANSFER SECRETARIES.• CONVEYANCING ATTORNEYS.• ESTATE AGENTS.• SARS.

PROCESS AND TIME FRAME TO WIND UP AN ESTATE

• Before Letter of Executorship is issued:

– Initial interview with client and financial advisor. Meeting held as soon as possible after death certificate has been issued or depending on family.

– Report estate to the Masters office:

Act requires that it is reported within 14 days, however in practise it is reported as soon as the executor has all required documentation.

• provide original will,

• death certificate,

• undertaking from executor taking up appointment,

PROCESS AND TIME FRAME TO WIND UP AN ESTATE

• preliminary inventory,

• death notice which includes all the personal information of the deceased,

• additional documentation specific to the deceased.

PROCESSES AND TIME FRAME TO WIND UP AN ESTATE

• After Letter of Executorship is issued (can take from 1 day to 3 months):

• Advertise for creditors (2 weeks),• Determine solvency (30 days from when adverts

start but remains ongoing),• Open estate bank account (within first week after

LoE has been issued),• Close deceased’s bank account (send instructions

within 14 days of LoE being issued),

PROCESSES AND TIME FRAME TO WIND UP AN ESTATE

• Obtain certificates of balances i.e. specific values of assets as at date of death and instruct tax consultant to attend to deceased’s tax returns (14 days after LoE has been issued),

• Examine claims against the estate,

• Drafting of Liquidation and Distribution accounts (Act allows 6 months from date of issuing Letter of Executorship. Should it take longer then extension must be requested from Master).

• L&D must be approved by the Master (can take 1 to 3 months).

PROCESSES AND TIME FRAME TO WIND UP AN ESTATE

• After approval by Master then account to lie open for inspection (21 days),

• Should no objection be received then creditors and heirs are paid and assets are transferred (3 months to make payments and transfer assets),

• Finalise estate.– Tax Clearance form SARS– Filing notice from the Master– Title deed from the deeds office.

PROBLEMS EXPERIENCED IN ESTATES

• Natural or unnatural death. – Post mortem / police inquest / toxicology reports for

unnatural deaths.

• Last will and testament. – Badly drafted / original missing / legal requirements not met.

• Uncooperative family members or heirs.• Untraceable assets.• Disputed claims.• Insolvent estate.• Liquidity issues.

PROBLEMS EXPERIENCED IN ESTATES

• Fixed property:– Rates clearance certificates (billing issues),– Problems with the deeds office,– Sale of property,

• Heirs consent,• Masters endorsement.

• Tax:– Outstanding personal tax,– Uncooperative tax consultants,

PROBLEMS EXPERIENCED IN ESTATES

– Issuing of tax certificates by institutions,– Trustees of Pension / provident funds.– SARS processes.• Juristic entities:• Valuations for company’s and cc’s.• Lost listed share certificates.• Financial institutions processes.• Firearms.• Motor vehicles:

- Lost registration documents.

PROBLEMS EXPERIENCED IN ESTATES

• Master:– Lost files,– Lack of intellectual capacity,– Uncooperative staff,– Estate duty assessments,– Issuing amended Letter’s of Authority for existing

and new trusts.• Accrual claims.

SENTINEL’S SOLUTIONS• Master:

– Fast track (Sentinel does all documentation for the Master and he just stamps and signs – straightforward estates).

• Attorneys:– Attorney’s responsible for rates clearance

certificates.– Use a dedicated, experienced service provider.• Provide a detailed explanatory letter to heirs at initial

interview.

HOW YOU CAN ASSIST TO FACILITATE A SPEEDY ESTATE

• Before client passes away compile as much detail as possible. We can provide a detailed questionnaire.

• After client has passed away assist with acquiring information from financial institutions.

• Assisting with policies and pensions paid directly to beneficiaries.

QUESTIONS?