In order to successfully wind up a deceased estate, the following procedure must be followed in terms of the Administration of Estates Act.
Steps to Follow Immediately After the Death of a Loved One
- Obtain a Death Certificate (and other supporting documents) at the Department of Home Affairs.
- Locate the Last Will and Testament of the deceased and ensure that the Will was validly executed by the deceased in the presence of two competent witnesses. If the Will has more than one page, the deceased must have signed each page of the Will. The Master will not accept a photocopy of the Will. Where there is no valid Will, the Master will direct that the estate be administered in terms of the Intestate Succession Act.
- Determine the identity of the Executor of the deceased estate. The Executor is usually nominated in the Will of the deceased.
Reporting the Death to the Master’s Office
- Report the death of the deceased by submitting the prescribed documents to the Master’s Office. The death must be reported within 14 days of the death of the deceased.
- Inform all interested parties of the death of the deceased.
- Obtain a Letter of Executorship from the Master’s Office. According to section 13 of the Administration of Estates Act, “no person shall liquidate or distribute the estate of any deceased person, except under letters of executorship granted or signed and sealed under this Act…”.
After the Receipt of the Letter of Executorship
- Write to all interested parties regarding all claims that may affect the deceased estate.
- Place advertisements in the Government Gazette and a local newspaper, requesting creditors to submit claims against the estate (within a 30 day period). The Executor may either accept or reject claims against the estate, however, this is subject to the Master’s discretion.
- Prepare a First and Final Liquidation and Distribution Account, and submit the Account to the Master’s Office within 6 months of receipt of the Letter of Executorship. The Master’s Office will either accept the Account and grant the Executor permission to advertise the Account, or the Master’s Office will issue a query sheet with specific instructions before the Account can be advertised. If the Account is not submitted within the 6 month period, the Executor must request an extension from the Master’s Office.
- Advertise the Liquidation and Distribution Account for a period of 21 days.
- Pay all liabilities and distribute and transfer all assets in terms of the Liquidation and Distribution Account and the Will.
- Comply with the Master’s final requirements before finalising the deceased estate.
Avoiding Common Pitfalls When Winding Up an Estate
The above steps are the typical steps which an Executor must complete: however, every estate is different. From the above it is obvious that there is a substantial amount of administrative work which must be undertaken by the Executor in order to finalise a deceased estate.
The responsibility of the Executor is onerous not only from an administrative point of view, but also comes also with legal consequences: if a mistake is made by an Executor in the winding-up of the Estate which leads to a loss suffered by the Estate, the Executor may be held responsible for such loss by the heirs of the Estate.
It is important therefore that the person nominated as an Executor in a Will is either a professional person, who specialises in the winding-up of deceased estates, or, if the Executor is not such a person, that the Executor makes use of the services of an appropriate person to assist him in the carrying out of his duties.
In such cases, if such professional person negligently causes loss to the Estate, then the Executor is liable for such loss and would have to recover any claim made against him by the heirs or the Estate, from the professional. This is obviously less than satisfactory.
Should you have any questions, we are ready to assist you. Contact Mark Blanckenberg on 083 6292429 or Peter Blanckenberg on 083 234 1405.