What happens after death?
The death of a person is a very traumatic time for those left behind. Knowing that your affairs will be taken care of in a professional, organised and caring manner will assist in relieving the burden of dealing with the necessary formalities by a family member.
Discuss funeral arrangements with a minister and funeral home once details of cremation or burial has been ascertained. These details may be found in the Will of the deceased. Friends and family will need to be advised to give them the opportunity of attending the service. The funeral home will organise newspaper advertisements, teas and flowers, if required. The funeral account may be forwarded to the nominated executor for payment in due course.
The procedures may be outlined in four stages, namely:
Stage 1 The Appointment of the Executor
Stage 2 Collection of Assets and Payments of Debts
Stage 3 The Liquidation and Distribution Account
Stage 4 Final Distribution and Closure
Stage 1: Appointment of Executor
The original Will must be located and a consultation will be held with a family member to determine the assets and liabilities of the deceased. Once the information has been received by the nominated executor or an agent acting on the executor's behalf, certain documentation must be completed and forwarded to the Master's office to report the estate.
The Master issues Letters of Executorship which authorises the executor to proceed with the administration of the estate. Although a spouse, brother, etc may be nominated as executor they will need to obtain a professional's assistance as directed by the Master.
The duties of an executor begin as follows:
- report the estate to the Master of the High Court
- apply for a bond of security if necessary
- notify banking institutions, insurance companies etc of the death and request certificates of balance as at date of death
- once Letters of Executorship have been issued a notice is published in the Government Gazette and local newspaper in the district in which the deceased was resident calling upon persons to lodge their claims against the estate
Stage 2: Collection of Assets and Payments of Debts
The executor must:
- ascertain full details of the assets and liabilities
- request banking institutions, etc to close accounts
- on receipt of a minimum of R1 000,00 open an estate banking account and ensure that all surplus cash is invested in an interest bearing account
- obtain valuations for those assets which are not to be sold such as immovable property, motor vehicle and shares
- pay all debts of the estate
- complete Income and Capital Gains Tax Returns and submit to the Receiver of Revenue
Stage 3: The Liquidation and Distribution Account
The executor must ensure that the Estate Account is drawn and submitted to the Master for approval within six months of his/her appointment unless an extension has been granted. The account reflects the following information:
- assets and liabilities as at date of death
- income and expenditure incurred after death
- distribution to heirs
- deemed assets such as life policies paid directly to beneficiaries
- estate duty calculations if necessary
- Once the Estate Account has been approved a further notice is published in the Government Gazette and local newspaper advertising the Account to lie for inspection for a period of 21 days.
Stage 4: Final Distribution and Closure
To finalise the administration of the estate the following must be attended to:
- once the Estate Account has lain free from objection the estate banking account will be closed, the beneficiaries will be paid, immovable and movable property will be transferred to the beneficiaries and the heirs will receive a final report
- the Executor is paid on conclusion. The tariff is presently 3,5% of gross assets which may be negotiated under certain circumstances
- once these procedures are completed, the heirs acquittances are filed with the Master's office and a filing notice is issued indicating that the administration of the estate has been finalised.
The 'average' time for the administration of an estate to be completed will be 4 - 6 months. However, should unforeseen circumstances arise it may take longer.
Reporting to Heirs
Our Estates Department ensures that heirs receive monthly updated reports and we are always available to discuss any queries or concerns. We consider this to be of vital importance as our clients need to be reassured and kept informed of all aspects of the estate administration.
Estate Duty and Capital Gains Tax (CGT)
Estate Duty is payable at the rate of 20% on the nett value of the deceased's assets exceeding R1,5million. An annual exclusion of R50 000,00, in respect of CGT, is allowed in the event of death.
The information set out above relates to an estate with a value of over R125 000,00. Should you require information relating to the administration of estates with a value of under R125 000,00 kindly contact us for our brochure setting out the procedures.
Information required when reporting an estate
Death Certificate (obtained from funeral home)
- Identity Document of deceased
- Marriage Certificate
- Surviving spouse's Identity Document
- Antenuptial Contract
- Divorce Order (required by Insurance Company)
- Names of deceased's parents
- Addresses of beneficiaries
- Name of predeceased spouse or divorced spouse - date and place of death and Master's reference no.
- Deed of Transfer / Mortgage Bond
- Registration papers for motor vehicle
- Firearm Licences
- Share Certificates
- Investment Certificates
- Bank account details and the name of the branch
- Insurance policy documents
- Short term insurance policy document
- Name of Brokers
- Employer's name
- Pension/Provident Fund
- Particulars of Business interests
- Inter Vivos Trusts / Loan Account / Letters of Authority
- Details of foreign assets
- Usufructuary or fiduciary interests
- Bond Account details
- Hire purchase agreements
- Funeral Expenses / Funeral Cover
- List of outstanding Accounts
- Pension details
- Medical Aid details / address
- Income Tax/Vat reference number
- Name of Accountants
- Deeds / Security Box held with Banking Institution