Deceased estate administration – A lengthy process

25 Aug 2023

The process of winding up a deceased estate is administrative in nature. Many of the delays experienced in administering a deceased estate are due to backlogs at the office of the Master of the High Court (“the Master”), which is the judicial body that oversees the administration of all deceased estates in South Africa, and delayed turnaround times for receiving documentation from banking and other institutions.

Below is a simplified summary of the steps involved in administering a deceased estate.

1. Reporting

Various reporting documents are completed and signed (usually by a family member of the deceased) and submitted to the Master, together with the deceased’s original will and certified copies of the deceased’s identity document, death certificate, marriage certificate and antenuptial contract (if applicable).

2. Letters of executorship

The Master will issue letters of executorship in favour of the nominated executor, which is the instrument through which the Master formally appoints the executor to administer the estate. The executor has no authority to act until letters of executorship are issued.

3. Section 29 advertisement

On receipt of the letters of executorship, the executor arranges publication of a ‘notice to creditors’ in the Government Gazette and in a local newspaper circulating in the area where the deceased resided, calling upon any person with a claim against the estate to lodge such claim with the executor within a specified period (30 days is the minimum).

4. Estate bank account

The executor is obliged to open a new bank account in the name of the estate.

5. Dealing with assets and liabilities

On receipt of the letters of executorship, the executor will write to banking and other institutions where the deceased held accounts or investments and to any known creditors requesting documentation including certificates of balance, statements, tax certificates and claim letters and requesting closure of bank accounts and redemption of investments, if applicable. The executor will also obtain valuations of any movable and immovable property and should consult with the beneficiaries to establish whether a particular asset should be transferred, rather than liquidated, depending on whether there is sufficient liquidity in the estate to settle all creditors’ claims and administration expenses.

6. Income tax

The executor notifies SARS of the taxpayer’s death, establishes any outstanding tax liability and the outstanding tax returns to be filed and thereafter files the outstanding returns or arranges for the deceased’s tax practitioner or accountant to file the returns. The executor may be required to attend to a secondary income tax registration depending on the extent and type of income earned from the day after death. SARS will issue a new tax number and the executor will need to file estate income tax returns for each tax year.

7. Liquidation and distribution account

The executor prepares a liquidation and distribution account, which is a detailed statement of account setting out all assets and liabilities, the distribution of the assets to the beneficiaries and any income and expenditure incurred after death and submits the account to the Master.

The Master issues a query sheet. If no queries are raised, the Master will grant permission to advertise the account as lying for inspection. If any queries are raised, the executor may have to lodge additional documentation or submit a revised account.

8. Estate duty

The executor will prepare an estate duty return and submit it to the Master with the liquidation and distribution account. If the net value of the estate is above the estate duty threshold, the executor will submit the estate duty return to SARS. The current practice of SARS is to perform an estate duty audit on every estate that is dutiable. An estate duty audit can take months to be finalised and the Master will not grant permission to advertise the account as lying for inspection without a copy of the estate duty assessment.

9. Section 35 advertisement

The executor arranges publication of an advertisement in the Government Gazette and in a local newspaper circulating in the area where the deceased resided, setting out the inspection period (the minimum is 21 days) and the Master’s office and magistrate’s court (if applicable) at which the liquidation and distribution account will lie open for inspection by interested parties.

10. Authorisation to distribute

If no objections are lodged to the account during the inspection period, the executor applies to the Master for authorisation to distribute the estate.

11. Transfer of an immovable property to a beneficiary

An immovable property cannot be transferred to a beneficiary until the liquidation and distribution account has lain for inspection free from objection.

12. Distribution and finalisation

Once authorisation to distribute the estate is granted, the executor’s fees, any unpaid claims and the beneficiaries are paid. The estate bank account is closed and the executor applies to the Master for a filing slip in order to close his/her file. To obtain the filing slip, the executor will need to lodge an affidavit confirming that all creditors and beneficiaries have been paid, copies of the estate bank account statements and proof of transfer of an immovable property, if applicable.

Article sourced from Eversheds Sutherland.

See also:

• How to FICA a Deceased Estate
• The administration of death
• Cutting-edge Estate Administration now available
• Intestate succession – What does it mean to die intestate?

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)