Estate Administration
Key Takeaways:
Estate administration involves settling a deceased person's affairs.
Executors play a pivotal role in managing assets, debts, and distribution.
Timely and meticulous handling ensures a smoother process for beneficiaries.
Estate administration demands careful execution.
Executors hold a crucial responsibility in managing assets, debts, and distribution, ensuring a seamless experience for beneficiaries.
In the financial and legal world, an Estate refers to everything of value that someone owns—such as all property owned, in and outside of South Africa (in cases where someone was ordinarily resident in the country), art collections, antique items, investments, certain insurance policies, annuities, intangible assets such as a patent or trademark and any other asset or entitlement.
A person’s ‘collection” of assets (less any debts on those assets) is also used as the primary way to refer to their net worth i.e. the value of everything a person owns. Meaning their financial and non-financial assets minus their total outstanding liabilities (your debts).
An asset is a resource with economic value that someone owns or controls with the expectation that it may provide a future benefit. Assets can be sorted into short-term (or current) assets, fixed assets, financial investments, and intangible assets.
What is a deceased estate?
A deceased estate only comes into existence when a person passes away.
A person’s deceased estate is made up of the aggregate of assets and liabilities at the time of their passing. And can include immovable property, bank accounts, jewelry, shares, motor vehicles and unit trusts or whatever else the deceased deemed valuable. These assets will need to be distributed to the beneficiaries (or heirs) listed in terms of a will (which is referred to as testate succession) or if there is no will, to immediate family members (meaning the deceased passed intestate) according to the Intestate Succession Act 81 of 1987.
What is involved in the administration of an estate?
The administration process ensures that all the terms of your loved ones last will and testament (if there is one) are conducted appropriately (keeping in mind the true intentions of the deceased). The process itself is highly technical because everyone’s assets, family wishes, and circumstances vary. Because of this, the estate administration process requires a suitably qualified legal professional to undertake the task (keeping in mind that the process to be followed is prescribed by the Administration of Estates Act, 66 of 1965 (as amended).
We therefore suggest that you get in touch with attorneys who have intricate knowledge of what the administration of an estate entails (like the attorneys at Benaters).
Very (very) briefly and to give you a high-level understanding of what the administration of estates involves:
The “main steps” of administering a deceased estate include:
Appointment of the Executor - an Executor is appointed to represent a deceased estate and is normally nominated by the deceased in the Will and appointed by the Master of the High Court to undertake his/her duties. Amongst other things, it is the Executor’s responsibility to report the death to SARS, protect the assets of the deceased estate, make distributions of property to beneficiaries according to the Will (or via intestate succession – discussed below) and pay the debts and various taxes of the estate (income tax, Capital Gains Tax, and calculate any Estate Duty owing). It is advisable to have an experienced Executor who is familiar with the mechanisms and procedures of winding up deceased estates. Especially someone who will act to the benefit of the family left behind and beneficiaries nominated in the Will
After the appointment of the Executor – the Executor must meet up with the family of the deceased and obtain all necessary documents (such as the death certificate and the Will – if any), then:
Report the deceased estate to the Master of the High Court;
Note: the appointment of an Executor is formalised after registering the deceased estate. The Master of the High Court will, once registered, issue a Letter of Executorship which effectively authorises the Executor to represent the deceased estate. The Executor’s powers, duties and responsibilities only commence once the Master of the High Court has issued this Letter of Executorship.
Provide notice of the deceased’s death;
Take control of the assets (which may include a valuation of the assets by a sworn appraiser) and paying all of the debts of the estate;
Open an estate bank account;
Prepare the estate’s Liquidation and Distribution Account;
Submit the final tax returns to SARS, paying all Inheritance Tax (like Capital Gains Tax and other taxes - if applicable);
Advertise the Liquidation and Distribution Account;
Distribute the assets;
Transfer property to heirs, and
Sign off and close – which includes the closing the estate bank account and obtaining the final discharge from the Master of the High Court.
To find out more about the administration of a deceased estate, download our Deceased Estates Guide here.
Why should you trust Benaters with the administration of a deceased estate?
Administering a deceased estate is not a task that should be approached lightly or by someone who does not have working knowledge of what to do. Unfortunately, despite all intents and purposes that can only cause more delays and more harm than is necessary.
At Benaters we truly do work under the assumption that your family is ours too. And we look after you as if that was a fact.
We have assisted many individuals and families with their estates, from the planning thereof to the administration of same and have been able to successfully support and guide them through the entire process.
We are here to help you. In any way we can!
So please, get in touch today and let us see how we can assist you as you move through this difficult time. Rest assured that we will undertake your matter, as always, with professionalism and the utmost due care.