A loved one has died – what happens after the funeral/cremation?

1. INTRODUCTION

They say that only two things in life are certain: death and taxes. What needs to happen after a loved one has passed on and he/she has been buried or cremated? His/her estate needs to be administered. The first question we need to ask is if the deceased had a valid will or not.
If he/she had a valid will, the estate must be administered in terms of the stipulations of the will. Many people however die without leaving a valid will. The Intestate Succession Act then determines who must inherit. The rules in the Act must be followed and are based on the principal that the closest blood family of the deceased must inherit.
The second question relates to the value of assets in the estate, the value of assets will determine which one of the two methods of administration we need to follow. If the value of assets in the estate amounts to R250 000-00 or less, one method of administration (informal process) is followed and if it amounts to more than R250 000-00 the other (formal process) is followed.  

Assets of an estate fall in one of three categories:
1.1 Fixed property – Houses, farms, empty stands, flats etc.
1.2 Movable property – Furniture, motor vehicles, fire arms, jewellery, tools and even shares in a Company and membership in a Close Corporation.
1.3 Claims in favour of the estate – Any money due and payable to the estate: bank accounts, life policies where no beneficiaries are nominated, investments, unit trusts etc.
As a general rule, pension money and money in terms of a retirement annuity do not form part of the assets in the estate.

2. REPORTING OF AN ESTATE

Before the administration of the estate can begin, the estate must be reported. Certain documents must be signed by a family member and certain documents must be submitted with these documents like: death certificate, marriage certificate and original will. These documents are sent to the Master of the High Court, a Government Department resorting under the Department  of Justice, who amongst others, oversee the administration of estates. They must then appoint an Executor (Asset value R250 000-00 or above) or Masters Representative (Asset value less than R250 000-00)

3. ASSET VALUE R250 000-00 OR LESS

The administration process is informal, the Masters Representative must sort out the deceased’s affairs and see to it that heirs get what is due to them. If the deceased left no valid will or did not have any fixed property, the estate can be reported at the Magistrates Court in the district where the deceased resided. The relatives of the deceased will however attend to this themselves. The Master or Magistrates Court will appoint the Masters Representative and will play no further part in the administration process, unless there is a dispute. These types of estates are referred to as “Section 18(3) estates. Proof of assets, like bank statements and registration certificates of vehicles, must be included when the estate is reported.

4. ASSET VALUE R250 000-00 OR MORE

These estates must be reported with the Master of the High Court. The process is formal, the Executor must follow certain prescribed procedures and the Master of the High Court oversees this process. If the executor is a non-estate administrator, he/she must appoint an agent to assist him/her with the administration. Once the Executor is appointed, he has to follow the following formal steps, irrespective of the value of the assets in the estate above R250 000-00:
4.1 Advertisement in Government Gazette  and newspaper circulating in the town/city where the deceased resided, calling on creditors to submit claims against the estate within a certain period of time.
4.2 Drafting a Liquidation and Distribution Account of the estate, reflecting the following:
4.2.1 Assets and liabilities.
4.2.2 The cash in the estate and the total liabilities that needs to be paid.
4.2.3 Distribution account – Who must inherit, what assets must they inherit and why must they inherit (Determined by the question if the deceased left a valid will or not).
4.2.4 Estate duty – a complete calculation to determine if estate duty is payable or not. Each deceased estate receive a R3 500 000 estate duty rebate and all assets bequeathed to a surviving spouse is exempt from estate duty.
4.3 Submitting the Liquidation and Distribution Account to the Master for approval.
4.4 Advertisement in Government Gazette  and newspaper circulating in the town/city where the deceased resided, informing people that the L & D Account will be available for inspection for a 21 day period.
4.5 If no objection against the L & D Account is lodged, the payment and transfer of fixed property to heirs and payment of creditors.
4.6 Submitting of final documents to the Master of the High Court. 

5. CONCLUSION

The abovementioned explanation is a short exposition of the administration of deceased estates. If you have any queries on the administration of a deceased estate you are welcome to contact me: Hennie Terblanche hennie@dupwest.co.za (014) 523 4600 and I will gladly assist you.