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executor-duties

What you should know if you are appointed as an executor

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

Articles and information about 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 but 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, including:

  • 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 while waiting to be appointed as an executor?
  • How much should I expect to pay my appointed agent?

How to report the estate to the Master

If the estate’s assets are worth more than R250 000, an executor must be appointed, and the estate reported to the Master of the High Court.

Once a death certificate is obtained from the funeral home or Department of Home Affairs and the original will has been located (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 the executor’s identity documents; and
  • Several completed forms, which are available on the Department of Justice’s website, providing the department with more details of the estate.

An agent has to be nominated at this stage, and must be able to assist with assembling all of the documents and filing them at the Master’s office closest to where the deceased resided at the time of 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 not been issued by then. There is generally no penalty for the late reporting of an estate unless the reporting is considered excessive.

How to protect the deceased’s assets while waiting to be appointed as an executor

The Master’s offices have not escaped the administrative backlog that arose because of Covid-19. As a result, they generally have a longer-than-usual turnaround time for the issuing of Letters of Executorship. This delay only adds to the time necessary to wind-up an estate and could have a negative financial impact on the estate.

Although many administrative tasks do require a Letter of Executorship, some tasks can be done from the onset to mitigate any financial damages. These include:

  • Cancelling any debit orders on the deceased’s accounts;
  • Writing to the financial institutions where the deceased held accounts and requesting that these accounts are frozen; and
  • Writing to creditors asking for a freeze on interest payments.

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.

How much an agent will expect to be paid

The appointed agent should be a professional who specialises in the winding up of estates – in other words, an attorney or a company specialising in trust and estate management.

The Administration of Estates Act sets a standard tariff for executor’s fees.

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 or conveyancing work that needs to be done is negotiated as a separate fee for things such as evictions, High Court applications and the 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.

Stacy Rouchos is a trust and estates officer at Bannister Trust.

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