Procedure for winding up a deceased estate

  1. Establish date of death.

  2. Lodge the following five documents with the relevant Master’s Office within a reasonable time in order to obtain a Letter of Executorship:
    • Death notice
    • Original will
    • Death certificate
    • List of inventory
    • Acceptance of Executorship (submitted in duplicate)

  3. The list of inventory is collated by requesting a certificate of balance at date of death from the various financial institutions with whom investments were held (banks, unit trusts, insurance houses).

  4. Assets such as motor cars, furniture, houses are to be valued by a sworn appraiser.

  5. Estates with a net asset value (total assets less total liabilities) of less than R250 000 are handled under Section 18(3) which does away with the Executor having to open a bank account, advertise or account to the Master with regard to the First and Final Liquidation and Distribution account.

  6. Once the Executor has his appointment, he:
    • Opens a bank account in the name of the estate
    • Advertises in the local newspaper on the same day as the notice appears in the Government Gazette (Friday). This advertisement (notice) serves to inform anyone who has a claim against the estate that they have 21 days to apply to the Executor for acknowledgement of their claim
    • Reports the death to the revenue authorities and finalizes the deceased’s tax from 1 March to date of death. Capital Gains Tax is payable at death
    • Pays any outstanding accounts eg. doctor, funeral, etc

  7. When winding up an estate assets are either:
    • Awarded to the heirs eg. the property is transferred into the heir’s name or
    • Realised eg. property is sold with the proceeds paid out to the heirs according to the will.

  8. The Executor drafts the First and Final Liquidation and Distribution Account in accordance with the will.

  9. The Executor calculates the estate duty due to SARS:
    • If the net asset value (total assets less total liabilities) of the estate exceeds R3.5 million, the excess over the R3.5 million is liable for estate duty of 20%.
    • Certain items are free of estate duty eg. bequests between husband and wife

  10. Executor’s fee is calculated per the prescribed tariff, currently 3.5% of the estate’s assets plus VAT.

  11. The Executor forwards the estate account to the Master with all the necessary vouchers eg. receipts or certificates of balance.

  12. The Master audits the estate account which may take several weeks.

  13. When the Master is satisfied with the account the Executor must advertise for the account to lie for inspection for a period of 3 weeks allowing anyone to get a copy of the Will and the account in order to lodge a claim.

  14. Once this period has passed and nobody has lodged a claim the Executor awards or pays out the heirs.

  15. The heirs sign an acquittance stating that they have received their inheritance.

  16. The acquittances and the final bank statements are sent to the Master upon which, if satisfied, the Master forwards the Executor a filing notice which stipulates the completion of the estate.

  17. The Executor retains all records pertaining to the estate for the prescribed period.

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