The Administration of Estates Act 66 of 1965 (“Act”) differentiates between the winding up of small and large estates. When dealing with an estate smaller than R250,000, the process can be fairly simple and quick. A representative appointed in terms of a valid Will or terms of nomination by the heirs in the case of an intestate estate will be authorised by the Master of the High Court to wind up the estate. The representative will ensure that all claims are collected, all debts paid and all distributions are made to the beneficiaries.
However, in larger estates, things work a bit differently. In such estates, an executor is appointed and tasked with the duties of winding up the estate. Such duties include:
- Applying for the Letters of Executorship from the Master of the High Court.
- Once received, take control of all the assets of the deceased.
- Engage with financial services entities and banks to close all the deceased’s bank accounts and open an estate late bank account wherein all estate funds are to be paid.
- Provide notice to all debtors and creditors in a local newspaper and the Government Gazette to lodge their claims against the estate within a period of not less than 30 days.
- Draft the liquidation and distribution account and submit such to the Master of the High Court for approval, within 6 months from the issuing of the Letters of Executorship.
- Place a notice in a local newspaper and Government Gazette advising that the liquidation and distribution account is lying for inspection for a period of not less than 21 days.
- Pay all creditors and distribute the estate assets by the provisions of a Will or the Intestate Succession Act 81 of 1987.
Again, this all seems relatively straightforward. Unfortunately, the time taken to wind up an estate is influenced by the provisions of the Administration of Estates Act as well as the efficiency and capacity of institutions, like the Master, financial institutions and SARS to do the necessary on their side. Taking into account the impact that the Covid-19 pandemic had in creating backlogs as well as the high death rates during this period, processes, particularly at the Master’s office, are delayed impacting not only the appointment of executors but also the timeframes for approval of liquidation and distributions accounts.
Similar delays are also experienced with financial institutions in closing the deceased’s bank accounts and obtaining the necessary tax certificates to be submitted to SARS, all having a knock-on effect on the ability to effectively administer the estate to finality.
In estates where the deceased has left behind a valid Will, the winding up process can be shortened as the process of nominating an executor is eliminated, and the distribution of the estate assets is outlined in the Will. In cases where there is no valid Will, further delays can be caused by the infighting of family members and court applications to declare the Will validly/invalid.
What this means is that the winding up of a deceased estate can take anything from a few months to even years, with size and complexity all having an impact, exacerbated by delays experienced with key institutions needed to cooperate with the executor.
So, what can you do to help smooth the process of having your estate wound up for the day when you are no longer there?
- Having a valid Will that is aligned with your estate planning and covers all of your assets and is clear on how your assets are to be distributed is vital. This is why it remains vital to regularly review your Will and update such to ensure that it covers all your assets and aligns with your views on the division of your assets.
- Keep your estate organized and record your information and assets to help make it easier for your family to provide the necessary information to your executor.
- Nominate a competent executor in your Will that has experience in administering deceased estates and can deal with the complexities that your estate may have. Particularly where you have corporate assets or equities and even offshore assets, this becomes vital.
- Foresee areas that could be complex or create conflict and try and address these before you died in your will and estate planning. Foresight here can go a long way to simplifying the process.
For family and beneficiaries after the death of a deceased: The best advice is to ensure you cooperate with the executor to assist where you can, and where necessary seek good legal advice when needed.
Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s).
