Deceased estates can take forever to be finalised. Why?

Once you pass on, you lose total control of your assets and the law takes over. The Administration of Estates Act 66 of 1965 (“the Act”) kicks in and the process of unwinding your estate has to be administered in terms of this Act, whether you have a Will or not. This is the harsh and cold reality facing deceased’s survivors to ensure that the deceased’s estate is wound up quickly and in line with the law. It is common that there is the expectation amongst the survivors or family members that this process should go quickly, but unfortunately, the reality is that the process is hardly ever a quick one. So how long then does it take to wind up a deceased estate?

The Act differentiates between the winding up of small and large estates. When dealing with an estate smaller than R250,000.00(Two Hundred and Fifty Thousand Rands) the process can, but not always, be fairly simple and quick. A representative appointed in terms of a valid Will or appointed following nomination by the heirs(or beneficiaries) in the case of an intestate estate(estate where there is no Will) will be authorized by the Master of the High Court to wind up the estate. The representative will ensure that all claims are collected, all debts paid and all distributions are made to the beneficiaries.

However, in larger estates (estates that are more than R250 000.00 (Two Hundred and Fifty Thousand Rands)), the process is slightly different. In such estates, an Executor is appointed and tasked with the duties of winding up the estate. The duties of an executor include:

1. Applying for the Letters of Executorship from the Master of the High Court(This can take a number of days or weeks or months depending on the efficacy of the relevant Master of the High Court.
2. Once received, take control of all the assets of the deceased. In complex estates, this may take long as the process involves investigation of sort to ascertain all the assets that were owned by the deceased during his or her lifetime.
3. Engage with financial services entities and banks to close all the deceased’s bank accounts and open an estate late bank account wherein all estate funds are to be paid.
4. Provide notice to all debtors and creditors in a local newspa- per and the Government Gazette to lodge their claims against the estate within a period of not less than 30 days. The periods or timelines stipulated are regulated and cannot be waived nor circumvented.
5. Draft the Liquidation and Distribution Account(“L&D Account”) and submit such to the Master of the High Court for approval, within 6 months from the issuing of the Letters of Executorship. Given the inherent complexities of larger estates it is often times not possible to get to this stage within 6 months from the issuing of the Letters of Executor- ship. In such a case, the executor may have to apply for an extension.
6. Place a notice in a local newspaper and Government Gazette advising that the L & D Account is lying for inspection for a period of not less than 21 days.
7. Pay all creditors and distribute the estate assets by the provisions of a Will or the Intestate Succession Act 81 of 1987.

This all seem relatively straightforward and quick. The sad reality is that the time taken to wind up an estate is regulated and influencedby the provisions of the Act as well as the efficiency and capacity of authorities, like the Master of the High Court, financial institutions/insurer, creditors and SARS to do what is necessary on their side. Covid-19 pandemic has had a negative impact on such processes and has resulted in backlogs due to high death rates during and after this period, processes, particularly at the Master’soffice, are delayed impacting not only the appointment of executors but also the timeframes for approval of L & D Accounts.

Similarly, financial institutions or insurers take a little longer in closing the deceased’s bank accounts or paying up policies or calling up investments and releasing the necessary tax certifi- cates to be submitted to SARS, all having a knock-on effect on the ability to effectively administer the estate to finality. Recent legislativedevelopments like those introduced to combat money laundering have introduced cumbersome identification require- ments which, if not responded to adequately and on time, may delay the process further.

In estates where the deceased has left a valid Will, the winding up process can be shortened as the process of nominating an executor is eliminated, and the distribution of the estate assets is outlined in the Will. In cases where there is no valid Will, further delays can be caused by the infighting of family members and associated court actions to challenge the process or substance of the administration of the estate.

This effectively means the winding up of a deceased estate can take anything from a few months to even years, depending on the size and complexities of an affected estate, exacerbated by delays experienced with key authorities and institutions needed to cooperate with the executor or representative.

To alleviate some of these delays, there are certain things that can be done during one’s lifetime to help shorten the process. These may include:

• Keeping an up to date “Book of Life” with all your personal records such as bank accounts details, life insurances, investment accounts, licenses, etc.
• Having a valid Will that is aligned with your estate planning and covers all of your assets and is clear on how your assets are to be distributed is vital. This is why it remains important to regularly review and update your Will to ensure that it covers all your assets and aligns with your wishes on the distribution.
• Keeping your estate organized and record your information and assets to help make it easier for your family to provide the necessary information to your executor.
• Nominating a competent executor in your Will that has experience in administering deceased estates and can deal with the complexities that your estate may have. Where you have corporate assets or shares and even offshore assets, this becomes even more vital.
• Anticipating areas that could potentially be complex or create conflict and address these before you die in your Will or as you plan your estate. Foresight here can go a long way to simplifying the process.

For family and beneficiaries after the death of a deceased, the best advice is to ensure that you cooperate with the executor to assist where you can.

We can assist you

We have a Labour & Employment Department which offers professional, efficient, and personal services. Our fees regarding employment and labour matters are competitive.

The firm

Makgale Law is a boutique law firm based in Rustenburg focused on serving a niche market, both businesses and select individuals. By understanding our client’s needs and objectives we strive to deliver cost-effective legal solutions for all business and personal matters. We are committed to developing close working relationships enabling us to succeed consistently on our client’s behalf.

Makgale Law

Labour & Employment

www.makgale.co.za