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Administration of deceased Estates

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Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The distribution of assets in an estate can sometimes cause problems for the heirs.  In some cases it can lead to a bitter dispute in the family, to the extent that families have even resorted to courts of law.  This can delay the winding-up of an estate. Such delays can be prevented if the heirs come to a mutual agreement or conclude a redistribution agreement.  "This can resolve many of the problems among heirs in a simple and informal way." The persons concerned must discuss the matter calmly and come to an agreement on the redistribution of the assets, which they can then put in writing.  The executor is then authorised to distribute the assets and to give each heir that part that he or she wants to receive.  Often it is not necessary for the executor to become involved.  He simply distributes all the movable assets in equal parts and the heirs come to a mutual agreement on the division thereof. The redistribution agreement must meet certain minimum requirements.  The executor and only the beneficiaries that have an interest in the redistribution are parties to the agreement.  If the deceased was married in community of property, the undivided half share of the joint estate belonging to the surviving spouse can also be included in the agreement, provided the spouse is party to the agreement, even if he or she is not an heir. If minors are involved, their guardians must be party to the agreement on their behalf, and there are additional requirements that must be met.  Furthermore, the agreement must be concluded and executed during the administration period of the estate. All signed redistribution agreements are subject to the approval of the Master of the Supreme Court during the checking of the liquidation account. Although a redistribution agreement could help to resolve the problems among heirs regarding the distribution of the estate assets, it may not change the provisions of the will or the provisions of the Intestate Succession Act in cases where the deceased died without a will. Everyone involved in the agreement must give something and receive something.  The beneficiaries may, for example, also bring cash from outside the estate in order to effect an equal distribution.  Redistribution agreements can also be used as a means of terminating a beneficiary's joint ownership of an estate asset (or assets) and acquiring sole right of ownership.  
Friday, 26 March 2010 | 8198 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
A deceased estate comes into existence when a person dies and leaves property or a document, which is a will or is intended as a will. Such an estate must then be administered and distributed in terms of the deceased’s will or, in the absence of a valid will, in terms of the Intestate Succession Act, 81 of 1987. The procedure that must be followed to administer a deceased estate is prescribed by the Administration of Estates Act, 66 of 1965 (as amended).
Friday, 26 March 2010 | 1602 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The death of a person who dies within the Republic of South Africa and leaves property or any document that is a will or is intended as a will; and the death of a person who dies outside of the Republic of South Africa, but who leaves property and/or any document that is a will or is intended as a will, in the Republic of South Africa, must be reported to the Master of the High Court.  
Friday, 26 March 2010 | 1782 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
Where the deceased was living in the Republic of South Africa, the estate must be reported to the Master of the High Court in whose area of jurisdiction the deceased was living at the time of his/her death. Where the deceased was not living in the Republic of South Africa at the time of his/her death, the estate may be reported to any Master of the High Court, provided it is reported to only one Master. An affidavit in which it is stated that the letters of executorships have not already been grated by any other Master of the High Court in the Republic of South Africa must accompany the reporting documents. From 5 December 2002, all Magistrates’ Offices are designated service points for the Master of the High Court and estates can be reported there. However, these service points have limited jurisdiction. All estates with wills, as well as estates that exceed R150 000 in value, will be transferred to the provincial Master’s Office. Therefore, it is advisable to report these estates directly the Master's Office.
Friday, 26 March 2010 | 1500 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The estate of a deceased person must be reported to the Master of the High Court within 14 days of the date of death. The death is to be reported by any person having control or possession of any property or documents that is or intends to be a will of the deceased. The estate is reported by lodging a completed death notice with the Master. The death notice and other reporting documents may be obtained from any Office of the Master of the High Court or Magistrate’s Office.  
Friday, 26 March 2010 | 1923 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The reporting documents will differ slightly depending on the value of the estate and the type of appointment required. If the value of the estate exceeds R125 000, letters of executorship must be issued and the full process prescribed by the Administration of Estates Act must be followed. However, if the value of the estate is less than R125 000, the Master of the High Court may dispense with letters of executorship, and issue letters of authority in terms of Section 18(3) of the Administration of Estates Act, (Act 66 of 1965). The Magistrates’ Office service points will only have jurisdiction if the deceased did not leave a valid will and the gross value of the estate is less than R50 000. Letters of authority entitle the nominated representative to administer the estate without following the full procedure set out in the Administration of Estates Act.
Friday, 26 March 2010 | 2063 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The following reporting documents are required (these forms are available online at http://www.justice.gov.za/master/forms.html): Completed death notice (form J294) Original or certified copy of the death certificate Original or certified copy of a marriage certificate (if applicable) All original wills and codicils or documents intended as such (if any) Next-of-kin affidavit if the deceased did not leave a valid will (form J192) Completed inventory form (form J243) Nominations by the heirs for the appointment of an executor in the case of an intestate estate, or where no executor has been nominated in the will, or the nominated executor has died or declines the appointment. Completed acceptance of trust as executor forms in duplicate by the person(s) nominated as executor(s) (form J190) Undertaking and bond of security, unless the nominated xecutor has been exempted from providing security in the will, or is the parent, spouse or child of the deceased (form J262) Affidavit by the next-of-kin of a deceased person who has died without leaving a valid will, to the effect that the estate has not already been reported to another Master or service point (if applicable)
Friday, 26 March 2010 | 1865 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The following reporting documents are required (these forms are available online at http://www.justice.gov.za/master/forms.html): Completed death notice (form J294) Original or certified copy of the death certificate Original or certified copy of a marriage certificate (if applicable) All original wills and codicils or documents intended as such (if any) Next-of-kin affidavit if the deceased did not leave a valid will (form J192) Completed inventory form (form J243) List of creditors of deceased (if applicable) Nominations by the heirs for the appointment of a Master’s representative in the case of an intestate estate or where no executor has been nominated in the will or the nominated executor declines the appointment. Undertaking and acceptance of Master’s directions (form J155) Declaration confirming that the estate has not already been reported to another Master’s Office or service point of the Master  
Friday, 26 March 2010 | 2259 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
If you die without leaving a valid will, your estate will devolve in terms of the rules of intestate succession, as stipulated in the provisions of the Intestate Succession Act, (Act 81 of 1987). In case of a marriage in community of property, one half of the estate belongs to the surviving spouse and, although it forms part of the joint estate, will not devolve according to the rules of intestate succession. For more information on the Intestate Succession Act, please consult the Act or your legal representative. In the event of intestate succession, what happens if the deceased is survived by a spouse or spouses but not by (a) descendant/s? The spouse or spouses will be the sole intestate heirs. In the event of intestate succession, what happens if the deceased is survived by a descendant/s, but not by a spouse? The descendant will inherit the intestate estate. In the event of intestate succession, what happens if the deceased is survived by a spouse/s as well as (a) descendant/s? The spouse or spouses inherit the greater of R125 000 per spouse or a child’s share, and the children the balance of the estate. A child’s share is determined by dividing the intestate estate by the number of surviving children of the deceased and deceased children who have left issue, plus the number of surviving spouses. Example of the child’s share in the event of a polygamous marriage: In this case the value of the intestate estate is R1 000 000. The deceased is survived by two spouses and three children. A child’s share amounts to R200 000 (being R1 000 000 divided by five: the three children and the two spouses). The child’s share is greater than R125 000. Therefore each spouse will inherit R200 000 and each child will inherit R200 000 (R1 000 000 less R400 000 to the spouses, divided by three). Example of the child’s share in the event of a monogamous marriage: In this case, the same calculation will apply as in the previous example, only the child’s share is calculated by dividing the value of the intestate estate by four. The surviving spouse and each child will each inherit R250 000. In the event of intestate succession, what happens if the deceased leaves no spouse or descendants, but both parents are still alive? His/her parents will inherit the intestate estate in equal shares. In the event of intestate succession, what happens if the deceased leaves no spouse and no descendants but leaves one parent, while the deceased parent left descendants (brothers/sisters of the deceased)? The surviving parent will inherit one half of the intestate estate and the descendants of the deceased parent the other half. In the event of intestate succession, what happens if the deceased leaves no spouse or descendants but leaves one surviving parent, while the deceased parent did not leave any other descendants? The surviving parent will inherit the whole estate. In the event of intestate succession, what happens if the deceased does not leave a spouse or descendants or parents, but both his parents left descendants? The intestate estate will be split into equal parts. One half of the estate is then divided among the descendants related to the deceased through the predeceased mother and the other half among the descendants related to the deceased through the predeceased father. In the event of intestate succession, what happens if the deceased does not leave a spouse, descendant or parents, but only one of the predeceased parents left descendants? The descendants of the predeceased parent, who left descendants, will inherit the entire intestate estate. In the event of intestate succession, what happens if the deceased does not leave a spouse, descendants, parents or descendants of his parents? The nearest blood relation inherits the entire intestate estate. In the event of intestate succession, what happens if the deceased is not survived by any relative? Only in this instance will the proceeds of the estate devolve on the state. What is the position with regard to an illegitimate child of the deceased? An illegitimate child can inherit from both blood relations, the same as a legitimate child. What is the position with regard to an adopted child of the deceased? An adopted child will be deemed to be a descendant of his adoptive parent or parents; and not to be a descendant of his natural parent or parents, except in the case of a natural parent who is also the adoptive parent of that child or was, at the time of the adoption, married to the adoptive parent of the child.  
Friday, 26 March 2010 | 3589 hits | Print | PDF |  E-mail | Report
Administration of Estates/Administration of deceased Estates
Author:Louwrens Koen
The loss of a loved one is a traumatic event. When a person dies, all is not over with the burial. The deceased’s affairs have to be finalised and this is what is known as winding up of the estate. The winding up of an estate is a long and drawn out process and the object of this article is to give people an idea of what is involved and why it takes so long. TESTATE AND INTESTATE ESTATES Estates may be divided into two categories, testate estates and intestate estates. A testate estate is where a person leaves a Will and the estate is wound up in accordance with the Will. An intestate estate is where there is no Will and the estate is wound up according to the Laws of Intestacy which is a set of legal rules which works out who is to inherit the estate according to a formula. A Will in summary does two things: it nominates an executor, and it gives instructions as to what is to happen to the estate. If there is no Will then the Master of the High Court will decide on the appointment of an executor and the estate will be wound up in accordance with the Laws of Intestacy. There is a misconception that if a person does not leave a Will, the estate goes to the Government. This is incorrect. This will only happen if a person does not have any intestate heirs, which is something that very rarely happens. THE WINDING UP PROCESS On the death of a person, anyone in possession of that deceased person’s Will is under an obligation immediately to send it to the Master of the High Court. From here, the steps involved in winding up of an estate are outlined as follows: 1. Appointment of executor. 2. Advertising for creditors. 3. Preparation of the estate accounts. 4. Advertising of the estate accounts. 5. Distribution of the estate. These aspects will now be considered in more detail. 1. Appointment of Executor When a person dies his estate is frozen. The Master of the High Court will appoint an executor once certain formalities have been complied with. The Master will require certain documents to be sent to him which will include the Will, if any, and certain statutory forms, one of which gives details of the assets of the deceased and another which gives personal particulars with regard to the deceased. The original Will also has to be sent to the Master. If the person nominated in terms of the Will meets the Master's requirement for appointment as executor, then that person will be appointed as executor. If not, or if there is no Will, the Master will call for written nominations by interested parties and having received the nominations will thereafter make a decision as to whom he will appoint as executor and thereafter appoint that person as executor. In most cases the Master will follow the heirs' recommendations. 2. Advertising for Creditors Once the executor has been appointed, he places a notice in a newspaper and in the Government Gazette calling upon creditors to lodge their claims and debtors to pay their debts within thirty days of date of publication. Very few people respond to the notice and accordingly during this period the executor will be making further enquiries into the affairs of the deceased and will be writing to known creditors and debtors to obtain statements of balance and payment of any claims due to the estate and will obtain valuations of all relevant assets in the estate. If sufficient funds are on hand the executor will, at this stage, make payment of the debts due by the estate. 3. Preparation of the Estate Accounts Once the executor has all relevant information, and after the thirty day period referred to in paragraph 2 has expired, he will prepare what are known as estate accounts. These accounts list all the assets in the estate and their value, detail all debts owing by the estate, including the cost of winding it up, detail who the heirs are and what each heir is entitled to and also detail the estate duty position of the estate. Once the estate accounts have been prepared and signed they are sent to the Master of the High Court who examines them and who may raise certain queries and perhaps call for certain additional information. Once the Master's preliminary requirements relating to the estate accounts have been dealt with the Master will authorise the estate accounts to be advertised. 4. Advertising of Estate Accounts A notice is placed in a newspaper and in the Government Gazette notifying all interested parties that the estate accounts will be available for inspection for a period of twenty one days at the offices of the Master of the High Court and at the offices of the Magistrate in whose magisterial district the deceased was ordinarily resident during his lifetime. During that period of time, any person whatsoever is at liberty to inspect the estate accounts. If any person feels that the estate accounts are wrong then that person should lodge an objection with the Master of the High Court. On receipt of any objections the Master will refer the objection to the executor for comment and once the executor has commented on the objection, the Master will make an appropriate decision with regard to the objection. 5. Distribution of the Estate If no objections have been lodged or, if objections have been lodged, then once the objections have been disposed of, the Master of the High of the Court will authorise the Executor to distribute the Estate. Once the Executor has received the Master's authority, the Executor will then transfer any immovable property to the heirs, deliver any movable assets, transfer shares and pay over cash bequests. Once this has been done the Executor has to lodge with the Master vouchers in respect of the assets, vouchers and proof of payment in respect of the liabilities and proof of delivery of assets and payment of bequests to heirs. Once the Master is satisfied that the Estate has been properly and completely wound up, he will authorise the Executor to close his file. TIMING From the above it can be seen that the winding up of an estate is a complex and time consuming procedure. It normally takes between 6 to 9 months to complete the winding up of an estate.
Friday, 26 March 2010 | 3881 hits | Print | PDF |  E-mail | Report



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