There are certain matters in life which are unfortunately, unavoidable.
Most people at some stage of their life have to deal with the reporting of a deceased estate.
There are two types of Estates - each with brief differences in their administration.
The first type of estate is a section 18(3) estate
In a section 18 (3) estate, the value of the assets amount to R250 000.00 or less, irrespective of whether the deceased left a will or not. The estate must be reported. The Master will issue Letters of Authority as opposed to Letters of Executorship. The person appointed in terms of Letters of Authority is referred to as the Master’s Representative.
Once Letters of Authority are issued, it is the Master’s Representative’s duty to ensure that the heirs receive what they ought to receive in terms of the deceased’s will or the Intestate Succession Act. There is no need for a Liquidation & Distribution Account or advertisements.
The second type of estate is a conventional estate
In a conventional estate, the value of the assets amount to more than R250 000.00. In this type of estate, the Master will issue Letters of Executorship.
The person appointed in terms of Letters of Executorship is referred to as the Executor.
The administration of a conventional estate is more complicated than a Section 18(3) estate, in that there are certain advertisements that must be placed.
If there is cash in the estate then an estate late bank account must be opened. The Master will request payment of a fee that is levied on the estate and a Liquidation and Distribution Account must be drafted and accepted by the Master.
On receipt of Letters of Executorship, the Executor may sign a power of attorney authorizing a qualified attorney/professional agent to act on his/her behalf in respect of the estate to attend to all the necessary tasks that the Executor is expected to perform.
1. The first step is to complete the relevant reporting documents and then to submit it to the Masters office in order for Letters of Executorship to be issued.
2. After Letters of Executorship is issued, the attorney will have to place an advertisement which must be placed in the Government Gazette as well as a local newspaper in the area in which the deceased resided, for a period of not less than 30 days, calling on debtors and creditors to lodge their claim.
3. The next step is the drafting of a Liquidation and Distribution Account by an attorney, which reflects the assets and liabilities of the estate and how distribution to the heirs will be affected. The account is then sent to the Master’s office for approval.
4. Once the account is approved by the Master, the attorney must then place another advertisement, in the Government Gazette, as well as a local newspaper in the area in which the deceased resided, in which the interested parties are advised that the Liquidation and Distribution Account will lie for inspection at the local Magistrates Court, for a period of not less than 21 days.
5. If there is immovable property in the estate, transfer of the property will take place simultaneously with the administration process.
When the transfer of the property is registered, a reconciliation is drafted and the Master’s final requirements are attended to. The Master issues a filing notice as confirmation that the estate is finalized.
The attorneys’ fee for winding up the estate is calculated at 3,5% of the value of the estate plus VAT.
There would also be transfer costs involved concerning the transfer of immovable property which is determined either by the value of the property in the case of property transferred to heirs or by the purchase price if the property is sold.
Contact our attorneys in Cape Town for assistance with estate planning, drafting of your last will and testament and the administration of business and family trusts.
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