During these very trying times, we are all more aware of our vulnerability and, for many of us, the possible death of family members and loved ones is a reality we have to face. It is important to know what the legal consequences are should a family member die, whether of Covid-19 or for any other reason.
The winding up or administration of a deceased estate must be done in accordance with the Administration of Estates Act (“the Act”). The Act sets out the requirements of winding up a deceased estate, as well as the time periods within which certain documents must be submitted to the Master of the High Court (“the Master’s Office”). The Master’s Office oversees the process of winding up the deceased estate and ensures that the deceased’s estate is distributed to the heirs in terms of the deceased’s will or the rules of intestate succession (if the deceased did not leave a valid will).
A deceased estate consists of the assets and liabilities of a deceased person at the time of his/her death. The estate therefore comprises not only property, but also any debts that the deceased incurred before death. The administration process can broadly be divided into 3 phases.
This starts when someone dies leaving any assets and/or liabilities or a will. The first step is to report the death to the Master’s Office by completing the death notice. This must be submitted to the Master’s Office with various other documents in order for an executor to be appointed. The executor, under the supervision of the Master’s Office, is the person who deals with the winding up of the deceased estate. Whilst waiting for the letters of executorship to be issued, the executor can deal with certain tasks, eg obtaining valuations of assets and determining the liabilities of the deceased estate.
This phase begins once the letters of executorship has been issued by the Master’s Office. This document allows the executor to administer the deceased estate. The duties of the executor are set out in the Act. The executor must:
- Take control of the assets of the estate
- Advertise for creditors and debtors to submit claims within 30 days of advertising
- Determine whether the estate is solvent
- Open a bank account in the name of the estate
- Choose a method of liquidation in consultation with the heirs
- Prepare a Liquidation and Distribution Account which must be submitted to the Master’s Office.
Once the Liquidation and Distribution Account has been approved by the Master’s Office, the third phase begins. During this phase, the executor advertises the Liquidation and Distribution Account and, if there are no objections to the Account, the executor then finalises the estate by settling the deceased’s liabilities, paying out any cash legacies, delivering assets to beneficiaries (if applicable) and distributing the residue of the estate to the heirs. Once same has taken place, the executor advises the Master’s Office thereof and is discharged from his duties.
Whilst the Act doesn’t prohibit a family member from being appointed the executor, it is recommended that an experienced administrator of estates is instructed to assist the executor in respect of his duties in order to ensure that the estate is wound up timeously.
Contact Barbara van Rooyen on 035 780 7250 or email@example.com should you require further information in respect of the winding up of deceased estates.