Estate executorship - first steps to take when a family member dies

Stacy Rouchos, Trust and Estates Officer at Bannister Trust

When a loved one passes away and you are either nominated as the executor in the deceased’s will - or discover that the deceased had no will to begin with - the process of winding up the estate may seem to be a daunting task.

Articles and information regarding the procedures are often confusing or not easily available, and this can be exacerbated by endless hours wasted queuing outside the Master of the High Court in search of advice only to be left with little or no assistance.

The Administration of Estates Act states that ‘anyone who is a major and mentally sound’ may be nominated as an executor of an estate. This often means that family members or trusted friends are appointed as executors to a deceased’s will, not knowing what this entails. The legal process requires that a layperson with little to no experience in winding up an estate must appoint an agent to assist in the many legal complexities involved. Most nominated executors who are left with a daunting task of winding up an estate find themselves in the deep-end with many unanswered questions:

• What do I need to do to report this estate to the Master of the High Court?
• What do I need to do to protect the deceased’s assets whilst waiting to be appointed as an executor?
• How much should I expect to pay my appointed agent at the end of the day?

What do I need to do to report this estate to the Master of the High Court?
Provided the estate’s assets are worth more than R250 000 an executor will need to be appointed and the estate reported to the Master of the High Court. Once a death certificate is obtained from the funeral home or Home Affairs and the original will found (if one is available), a set of documents should be prepared and sent to the Master’s office. These documents must include an Acceptance of Trust as Executor, a rough inventory of the deceased’s assets, certified copies of the deceased’s and executor’s ID documentation and the completion of several forms available on the Department of Justice’s website providing the department with more details of the estate. An agent will also need to be nominated at this stage, and must be able to assist with assembling all of the documents and filing same at the Master’s office closest to where the deceased resided prior to his or her death.

The Administration of Estates Act states that a deceased estate needs to be reported to the Master’s office no later than 14 days after the death of the deceased, but realistically a death certificate has often times not even been issued by then. There is generally no penalty for the late reporting of an estate unless the reporting is considered excessive.

Protecting deceased assets whilst waiting for the Letter of Executorship
Unfortunately, with the advent of the Covid-19 pandemic and the resulting impact it has had on our governmental systems, the Master’s offices have not escaped the administrative backlog and as a result, generally have a longer than usual turnaround time for the issuing of Letters of Executorships. This delay only further adds to the amount of time necessary to wind-up an estate and could also financially impact the estate negatively. Although many administrative tasks do require a Letter of Executorship, some tasks can be done from the onset to mitigate any financial damages such as cancelling any debit orders on the deceased’s accounts, writing to the financial institutions where the deceased held accounts and requesting that these accounts be frozen, and writing to creditors asking for a freeze on interest payable.

It is also advisable during this time to begin collecting information and supporting documents pertaining to the various assets and liabilities in the estate such as valuations of immovable property, motor vehicles and valuable movable assets as well as determining what liabilities will be payable.

What should I expect to pay my agent?
At the end of the day, the appointed agent should be a professional who specialises in the winding up of Estates i.e. an attorney’s firm or a company specialising in trust and estate management. With regards to executor fees, the Administration of Estates Act sets a standard tariff to be used in the industry. According to tariff, the executor is entitled to 3.5% on the gross value of assets in an estate and 6% on income accrued and collected after the death of the deceased. If the executor is VAT-registered, VAT would also need to be added to the tariff, increasing it to 4.025% on the gross value of the assets.

Generally, any additional legal work or conveyancing work that needs to be done is negotiated as a separate fee for things such as evictions, High Court applications and transfer of immovable property. Most firms and agents have the tariff rate set as a standard fee, unless they are doing it specifically for a friend or a long-standing client.