Administration of the Deceased’s Last Will & Testament
Considerations on the importance of a valid will and a brief overview of the process of administering and winding up the deceased’s estate.
By Puisano Amukelani Motshwane
A person accumulates property during their lifetime, but what happens to one’s hard– earned possessions upon their death? Can the wishes made at your deathbed be documented and deemed valid? The Law of Succession in South African law is premised on Freedom of Testation. This principle guarantees that the Testator’s final wishes are of high premium and that his property and assets are to be disposed of in terms of his final will and testament. The rules of Law of Succession and estate administration determines the scope of qualifying beneficiaries in terms of the will and the extent of their respective benefits.
In terms of the Wills Act, a Will is defined as a document of voluntary testamentary writing, executed in compliance with the prescribed formalities to be deemed valid, which expresses the wishes of the Testator and the distribution of his property after his death. In basic terms, a will shall not be deemed valid unless it is signed by the person making the will, in the presence of two or more witnesses, who must also sign the will altogether in the presence of the person making the will, called the Testator. These requirements further indicate that a will cannot be executed verbally.
The winding up of estates can be a simple or complex process by operation of law depending on the rules governing testate and intestate succession. A deceased who leaves behind a document purporting to be a will, thus enables their property to be distributed according to their final wishes, by way of testate succession. Whereas, where no valid will was concluded by the deceased, results in that such estate will be transferred according to the rules of intestate succession. Therefore, it is most certainly necessary that a will is drafted and executed to give effect to the testator’s last wishes.
The legal process that governs an estate where the deceased died without a valid will can be a complex scenario. Suppose a husband was married in community of property and is survived by his wife as well as dependent children, the application of the rules direct that the surviving spouse will inherit 50% of the estate in terms of the marriage concluded in community of property. Furthermore, the surviving spouse will also inherit a child’s share of the deceased estate, in terms of the Intestate Succession Act. Flowing from this, the husband’s dependants will inherit the residual value of the estate proportionate to each child’s share.
The loss of a spouse or partner is a devastating part of life and the process of winding-up the deceased’s estate can be a long and daunting procedure for the dependants left behind. An executor of the deceased estate must be nominated in terms of the deceased’s will, as they play a key role in the process of winding up the estate.
The moment the deceased estate ‘falls open’ is at the death of the Testator, upon which the estate freezes. Flowing from this, no transactions in terms of that estate can be made without the approval of the Master or execution of the nominated executor. The executor is responsible for managing the estate upon being appointed by the Master of the High Court by way of Letters of Executorship. The executor’s main functions are not a closed list and include taking control of the assets of the deceased estate, identifying the beneficiaries, ensuring compliance with all legal requirements and distributing the balance of assets in the estate to the beneficiaries. An executor could be an appointed individual, i.e. family member or even a trust company and are entitled to a fee as determined in the Administration of Estates Act4 under Section 51, deemed to be a maximum rate of 3.5% of the total value of assets in the estate.
The administration of the estate process in its entirety is supervised and enforced by the Master of the High Court to ensure compliance and protection of legal interests.
Procedural Steps of Winding-Up Estates
- Step 1: Notice of death and consultation with deceased’s family to obtain relevant documentation to register the estate at the Master’s Office of the High Court within 14 days of death of deceased in the area they resided prior to their death in order to establish jurisdiction of High Court. This process also enables executor to determine an inventory of assets and liabilities.
- Step 2: Once estate has been registered, the Master will issue Letters of Executorship if the gross value of estate is more than R250 000. Such Letter of Executorship provides authority to act in respect of all matters pertaining to the winding up of the estate, i.e. opening of estate late bank account, notification to all 3rd parties of the passing of the deceased and determining and processing the deceased’s assets and liabilities, amongst various other duties. If the estate is valued at less than R250 000 then the process is less complex whereby a Letter of Authority will be issued resulting in the estate being administered according to provisions of Section 18(3) of Administration of Deceased Estates Act.5
- Step 3: Once the executor receives the Letter of Executorship from the Master’s Office, the estate must be advertised in the Government Gazette and local newspaper so that creditors are notified that their claims against the estate can be lodged. Such advertisement will lie open for inspection for a period of 21 days.
- Step 4: The executor must then draft the Liquidation and Distribution account (“L&D account”), where all assets and liabilities of the estate are accounted for as well as setting out the names of the beneficiaries and the extent of their inheritance in terms of the will.
- Step 5: Once the Master deems the L&D account in order, the account will be directed by the Master to be advertised in the Government Gazette and the local newspaper in the area where the deceased resided. Such advertisement will lie open for inspection for a period of 21 days.
- Step 6: Prior to the distribution of the estate, all creditors must be paid so that there are no further objections to the distribution of the assets to the beneficiaries of the estate.
Once all the above is in order, the Master will issue a final letter confirming that the estate has been finalised.
Summary and Recommendation
The process and forecasted 8-month timeframe for winding up a deceased estate could be taxing on the testator’s dearly beloved, however the complexities can be best mitigated through the specialised execution of the estate. Securing the professional services of an attorney with the capacity to be appointed as executor ensures proper compliance and the protection of the interests of all parties with vested rights.