A guide to the winding
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| 'The Living Will'
WHEN A PERSON DIES, HIS OR HER ESTATE MUST BE WOUND UP. THIS MEANS
THAT, FIRST, ALL THE CREDITORS OF THE ESTATE ARE PAID AND, NEXT, THE
DECEASED'S ASSETS ARE DISTRIBUTED TO HEIRS AND BENEFICIARIES. IF THE
DECEASED HAS LEFT A VALID WILL, THE ASSETS WILL BE DISTRIBUTED
ACCORDING TO THE WILL; OTHERWISE HIS OR HER ESTATE WILL BE
DISTRIBUTED IN TERMS OF THE INTESTATE SUCCESSION ACT.
up of deceased estates
These steps must be followed:
- The death must be reported by completing a death notice (which you can get from
the office of the Master of the High Court) and forwarding it to the Master.
- If there is a will, it must be lodged with the Master for him or her to determine whether
it is valid in terms of the Wills Act (ie to determine whether or not it has complied with
the formalities). .
- A list of the deceased's property must be prepared and lodged with the Master on a
form which you can get from the Master's office.
Once these steps have been complied with, the estate has been reported. Now it is
necessary to have an executor appointed, who has the job of handling the winding up
of the deceased estate. If someone is nominated as executor in the will, this person can
apply to the Master for an official appointment (involving the issuing of letters of
executorship). The executor has the following duties:
- The executor must take custody of the estate property and the books of account and
must advertise for the creditors to lodge their claims by putting an advertisement into .
the newspaper and the Government Gazette. Creditors are given a certain period of
time in which to lodge their claims. After that time has expired, the executor must
determine the solvency of the estate - in other words whether the assets are greater
than the debts;
- The executor must draft the liquidation and distribution account and lodge it with the
Master. The executor must lodge the account with the Master within six months of his
or her appointment as executor (the Master can give the executor an extension of time).
- After the Master has examined the account and has approved it, the executor must
advertise that the account is lying open for inspection. During this period objections
to the account (for example by creditors whose claims are not reflected in the account)
may be lodged with the Master.
- After the account has lain for inspection, the executor must proceed to pay creditors
in terms of the liquidation account. The executor may need to liquidate the estate
(by selling assets) in order to raise cash to pay any debts owed to creditors. The
executor then also pays heirs and legatees in terms of the distribution account.
- When the Master advises the executor what the estate duty ("death tax") is, the executor
must pay the estate duty out of the estate. Estate duty will only need to be paid if, after all
the liabilities have been paid out of the estate, the estate is worth more than one million rand.
(Where the value of the property or estate is less than fifty thousand rand then different
formalities apply. For instance, the Master does not need to appoint an executor - the
Master can instead give directions as to how the estate is to be liquidated and distributed.)
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