Deceased Estates – Procedure for Winding Up

The winding up of a deceased estate can be a complicated matter, and I recommend that you employ the services of an attorney who specialises in the winding up of deceased estates to assist.

Certain Banks and Trust companies have been granted permission to wind up deceased estates where they have been nominated Executors under the deceased’s will. In the absence of a nomination, if the deceased dies intestate (without a will), the Master will appoint an Executor. Suppose the appointed Executor is a family member or not a specialist in the winding up of the deceased estate. In that case, the Master will generally, before appointing an Executor, require a letter from an Attorney in terms of which the attorney undertakes to assist in the winding up of the estate. In addition, if the heir is a minor, the Master will insist that an attorney be appointed.

Unless the will dispenses with the need for the Executor to furnish security, or unless the Master dispenses with it, the Executor will be required to provide security from a recognised financial institution to cover the value of the assets in the estate. It is generally very difficult, if not impossible, for the average individual to furnish security. So, the best course is to approach an attorney who will be able to put up the necessary security.

If the estate is under R250 000, it can be wound up summarily, so much of what follows does not apply.

Different aspects apply depending on whether or not the deceased was married in or out of community of property or single.

The first step is to file preliminary documents with the Master. These include a Death Notice, Inventory, Acceptance of Trust, Next-of-Kin affidavit, together with certified copies of the death certificate, personal particulars printed out from Home Affairs, Antenuptial Contract (if applicable, Will (if applicable), and certified copies of the death certificate, marriage certificate (if applicable) and identity documents of interested parties.

After some weeks, the Master will issue Letters of Executorship if the documents are in order.

The Executor then calls for creditors to file their claims against the estate by notice in the Government Gazette and a newspaper circulating in the area where the deceased resided.

The Executor then contacts Banks, Insurance Companies, etc., to realise the deceased’s assets and has the proceeds paid into an Estate Bank account that he will open.

The biggest headache is to obtain a clearance from SARS as the Executor will have to obtain a tax number for the estate and submit a return dealing with all income to the date of distribution. Needless to say, this may take months.

Once the assets are determined and claims against the estate have been finalised, the Executor will prepare a First and Final Liquidation Account that he will submit to the Master. The Master may raise queries to the account, but once it has been finalised, the Executor must publish a notice in the Government Gazette and newspaper advertising the account and calling on interested parties to raise objections with the Master should they choose to do so.

Thereafter the Executor can proceed to distribute the assets to the beneficiaries as determined by the will or by the law of intestate succession. However, a Conveyancer can only transfer immovable property, so if the Executor is not a Conveyancer, a Conveyancer will have to be appointed.

Once the estate has been finalised, and all creditors paid, the Master will issue a clearance to the Executor indicating that the estate has been finalised as far as his offices are concerned.

As can be seen from the above, the winding up of a deceased estate is a long and complicated one, and there are variations. Particularly because of the delay in obtaining a SARS clearance, it is very difficult to finalise an estate within a year of obtaining the Letters of Executorship.

To avoid unnecessary headaches, I recommend that you employ an attorney who winds up estates to act. The prescribed fee of 3.5% on the value of the assets and 6% on the income generated by the estate will be well worth paying.

Gerald Burne – Attorney, Notary and Conveyancer – Burne & Burne attorneys.