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Estates and Wills
Sunday, March 1, 2015
Standard guide

Most people understand the importance of a will, but many people overlook a very important element; the appointment of an executor. An executor is someone who you nominate to carry out the instructions of your will and help to handle your estate.

Kobus van Schalkwyk, Head of Legal at Standard Trust Limited says, “Even if you know that you need to appoint an executor, you need to think carefully before you decide who is going to represent your estate in that capacity. Family friends are usually appointed, but we fail to realise that a friend might not understand the complexities and legalities needed to manage your estate effectively. As such, wrong decisions can be made that will harm your estate.”
Understanding the role of executor can also help you make an informed decision, should you be nominated to be an executor in the wills of close friends or family. You also have the option to approach your bank to assist with the executorship function should you not be ready to take on this role.
The executor’s functions:

  • Take over the management and protect the assets in the estate.
  • Procure the will and file it with the master of the high court.
  • Identify and notify the beneficiaries and all relevant parties of the person’s death.
  • There are a number of precise administration procedures that have to be followed.
  • Executor must then pay the debts of the estate.
  • Finalise income tax returns.
  • Prepare and file a liquidation and distribution account.
  • Distribute the remaining assets to the beneficiaries.

If you take on the responsibility as co-executor, together with the testator’s (person who wrote the will) bank or trust company, you can expect the following process to take place:

  • The entire process of the administration of an estate is overseen by the Master of the High Court.
  • Their job is to ensure that the beneficiaries get what they are entitled to.
  • The first thing you must do is to obtain a death certificate. A good funeral parlour will do this on your behalf.
  • You need to inform all the people who had financial dealings with the deceased of his or her death and mail them a copy of the death certificate.
  • You then need to open up an Estate Late account with a bank in the deceased’s name. Monies accruing to the estate such as bank balances and proceeds from the sale of assets must go into the account.
  • You can access some of these funds to pay administration costs and creditors of the estate.

You also have to meet with the bank if they attend to the executorship. You need to make sure you have the following documents for this meeting.
Meeting with the bank:
You have to take all the relevant documentation with you such as the deceased’s:

  • Bank account details
  • Title deeds to properties
  • Insurance policy documents
  • Any other financial documents
  • The original will (The testator may have also given their bank a copy of the will)

The bank’s representatives will send a letter with all the reporting documents to the Master of the High Court to be formally appointed as executors. You, as the joint executor, will be granted the necessary powers to administer the estate. This procedure can take up to six weeks.

  • • The next step is to advertise the estate so that creditors can register their claims. Advertisements must be run in the Government Gazette and a local newspaper. Creditors have 30 days from the date of the publication of the advertisements to lodge any claims against the estate. The executor must then submit the deceased’s final tax return to the Receiver of Revenue.

During the next three to five months, the bank - with your help - will prepare the final set of liquidation accounts. This lists all the assets and liabilities in the estate, the inheritance left for distribution, and will identify the beneficiaries. Once this happens, you are ready to proceed to the Master of Court.
Submission to the Master of Court:

  • The executor must submit the liquidation and distribution account with supporting documents and vouchers (if the estate is subject to estate duty) to the Master of the High Court.
  • If all is well, the Master will give approval for the account to be advertised.   
  • Once this has happened the account must be advertised in the Government Gazette and a local newspaper and made available for inspection for 21 days at the Master’s Office and at the Magistrate’s Office in the district where the deceased lived.
  • If no objections are lodged against the final account the Master will confirm to the executor that the assets may be distributed to the beneficiaries.

Before distributing the estate, the executor must obtain a release from the Receiver of Revenue and all creditors must be paid before the estate can be distributed. Van Schalkwyk says, depending on the complexity of the estate, it can take between 10 – 12 months to complete this process. Once the executor has provided the Master with proof that the creditors have been paid and that the assets have been distributed, the Master of Court signs off the estate by issuing a filing slip. This brings the duties of the executor to an end.
An executor can take a maximum fee of 3.5 percent of the gross value of the estate if they want to. Often, family members do not take this fee but a bank or lawyer will charge this fee for attending to the administration. They may also earn six percent of the income earned by the assets from the date of the person’s death until the estate is distributed.
“One other important issue to consider when choosing to take on the role of executor is the fact that impractical and incorrect provisions may be included in wills which could make the administration difficult. Suggest to the person nominating you that they ask their bank, trust company, attorney, accountant or another professional person to help with the drafting of the will so that the administration process can be handled effectively,” concludes van Schalkwyk.

Copyright © Insurance Times and Investments® Vol:28.3 1st March, 2015
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