What Happens to a Deceased Estate After Someone Dies?
What Happens to a Deceased Estate After Someone Dies?
Losing someone is difficult enough without having to understand an unfamiliar legal and administrative process at the same time.
When a person dies leaving property or a document that is, or purports to be, a Will, a deceased estate comes into existence. The estate must then be administered before the deceased’s assets can be distributed.
Understanding the basic process can make the practical steps that follow a little easier.
What happens to the deceased’s assets?
When a person dies, their estate is effectively frozen.
This means that family members cannot simply withdraw money from the deceased’s bank accounts, sell assets or distribute property among beneficiaries.
The deceased estate must be administered under the supervision of the Master of the High Court and in accordance with the Administration of Estates Act.
Where the deceased left a valid Will, the estate is generally distributed according to the Will. If there is no valid Will, the estate is distributed in accordance with the Intestate Succession Act.
How soon must a deceased estate be reported?
A deceased estate must be reported to the Master of the High Court within 14 days of the date of death.
Where the deceased was living in South Africa, the estate is generally reported to the Master’s Office with jurisdiction in the area where the deceased lived.
A number of documents may be required when reporting the estate. Depending on the circumstances, these can include:
- the death notice;
- the death certificate;
- proof of the deceased’s marriage, where applicable;
- the original Will and any codicils;
- an inventory of the deceased’s assets;
- details of creditors;
- information about the deceased’s next of kin; and
- documentation relating to the person who is to administer the estate.
The precise documentation required depends on the circumstances of the estate.
Who administers the estate?
This depends partly on the value and circumstances of the estate.
Where the estate exceeds R250,000, Letters of Executorship must be issued and the full process prescribed by the Administration of Estates Act must be followed.
Where an estate is R250,000 or less, the Master may dispense with the appointment of an Executor and instead appoint a Master’s Representative under section 18(3) of the Administration of Estates Act.
The Master’s Representative is issued with Letters of Authority.
Is the person named as Executor in the Will automatically allowed to act?
No.
A person may be nominated as Executor in a Will, but nomination alone does not give that person authority to administer the deceased estate.
The necessary authority must first be obtained from the Master of the High Court.
The Administration of Estates Act provides that a deceased estate may not be liquidated or distributed without the required Letters of Executorship, an applicable endorsement, or a direction from the Master.
What does an Executor do?
Once formally appointed, an Executor is responsible for administering the deceased estate.
Depending on the estate, this process can include identifying assets and liabilities, dealing with creditors, collecting money owed to the estate, dealing with tax and other administrative requirements, preparing the required estate accounts and ultimately distributing the estate to the beneficiaries once the necessary requirements have been met.
The Executor must administer the estate in accordance with the deceased’s valid Will or, where there is no valid Will, the applicable laws of intestate succession.
Can beneficiaries immediately receive their inheritance?
Generally, no.
Before assets can be distributed, the estate administration process must be followed. Debts, administration expenses and other obligations of the estate may need to be dealt with first.
The Executor cannot simply distribute assets immediately after being appointed.
This is one reason why winding up a deceased estate can take time, particularly where the estate includes property, businesses, multiple investments, disputes, outstanding tax matters or other complications.
Why is having an up-to-date Will important?
A properly drafted and valid Will provides instructions about how you want your estate to be distributed and allows you to nominate an Executor.
Without a valid Will, your estate will be distributed according to the rules of intestate succession rather than according to wishes that were never properly recorded in a valid Will.
Keeping your Will current and ensuring that the original can be located after your death can make an already difficult process clearer for those left behind.
Assistance with deceased estates
Administering a deceased estate involves a number of legal and administrative requirements, and each estate has its own circumstances.
DMF Attorneys assists with the administration of deceased estates as well as Wills and estate planning.
