What the Executor must do once Appointed
The following points outline what the executor of a will does once they are appointed: by the Masters Offices:
- Immediately after letters of executorship have been granted, the executor shall take into his/her custody or under his/her control all the property, books and documents in the estate. These should not be in the possession of any other person who claims to be entitled to retain it under any contract, right of intention or attachment. s26(1)
- Advertise the estate so that any creditors can become aware of the need to register their claims against the estate. Advertisements must be placed in the Government Gazette and a local newspaper where the deceased resided in the 12 months preceding death. Creditors have 30 days from the date of publication of the advertisement to lodge any claims against the estate. See what detail the newspapers require for these adverts Estates FAQ (4th question).
- Take a look at the deceased’s bank account or post, in order to find what monthly payments are being made. You will need to pay up and close these accounts, e.g. credit cards, petrol card, telephone accounts, DSTV, gym membership, clothing accounts, etc.
- Close the deceased’s bank accounts and open up a cheque/current account called “estate late” followed by the deceased’s name as soon as more than R100 has been received. All investments will be paid into this account and all creditors and beneficiaries will be paid from this account.
- Assets like the deceased’s house may be sold, depending on what the beneficiaries want. The proceeds from the sale will go into the ‘Estate Account’. This will later be paid out to beneficiaries from the ‘Estate Account’.
- Give notice on shares, investments, annuities, policies, etc, that moneys owing to the deceased are to be paid into the ‘Estate Account’. If beneficiaries have been nominated in policies, they will bypass the estate and be transferred directly to the nominated beneficiary.
- The executor then needs to prepare the ‘Liquidation and Distribution Account’ (L&D account). This can take from six weeks to six months or even longer depending on the degree of difficulty of the estate. The L&D account includes all the assets and liabilities in the estate at the date of death. It also includes the income and expenditure incurred by the estate since the date of death. The net value of the estate is then the inheritance due to the beneficiaries. When a person dies it can trigger a capital gains tax event depending on the size of the estate, which requires expert tax knowledge to do the calculation. The executor then submits the L&D account together with supporting documents to the Master of the High Court. If the Master has queries, the executor is to respond within a certain time period. The executor submits the deceased’s final tax return to SARS at the same time.
- Once the Master of the High Court has given his approval, the account must be advertised in the Government Gazette and in a local newspaper and made available for inspection for 21 days at the Master’s office and at the Magistrates office in the district where the deceased lived. The heirs should have the opportunity to review the account before it is finally submitted to the master. If no objections are lodged against the liquidation & distribution account, the Master will confirm that the executor may distribute the assets to the beneficiaries.
- Before distributing the estate the executor must obtain a release from SARS. This will only be granted by SARS once they are satisfied that all outstanding taxes have been paid.
- Creditors must be paid before the residue of the estate can be distributed among heirs.
- After the account has been advertised, the executor prepares a cash statement and distributes the assets to heirs. It takes an average of eight months to three years to finalise an estate. The executor will also arrange for transfer of fixed property, e.g. a house that was in the deceased’s name into the name of the person who inherited it. There will be no transfer duty, but the estate will pay conveyancing costs regardless of who inherits the property.
- Once the executor has provided the Master of the High Court with proof that the creditors have been paid and that the assets have been distributed, the Master signs off the estate and the executor’s task is complete.
More info on executor duties, forms, etc – provided by the Master of the High Court.