Estate Planning – Your Questions Answered

What is an estate?

Legally, it is everything you own, especially everything that is left when you die. Put differently, your estate is your net worth, in other words, it is the sum of all your assets less all your liabilities.

Examples of assets: Cash, shares, property, legal rights, possessions.

Examples of liabilities: Loans, mortgage bonds, bank overdrafts, creditors.

What happens to an estate when a person dies?

A deceased estate comes into existence immediately when an individual die. The deceased estate must be reported within 14 days from the date of death to the Master of the High Court in whose area of jurisdiction the deceased was normally living 12 months prior to his/her death.

Who is allowed to report a deceased estate?

Any interested party is allowed to report the deceased estate, although, usually the appointed executor will report it.

How is a deceased estate registered?

Documents required to register a deceased estate, and to eventually administer it, depend on the value of the estate. If an estate exceeds a gross value of R250 000, a Letter of Executorship (LoE) is issued. An estate with a gross value of less than R250 000 needs a Letter of Authority (LoA).

Documents required for estates exceeding R250 000 to obtain a Letter of Executorship

• Certified copy of the deceased’s identity document (ID)
• Completed death notice (form J294)
• Certified copy of the death certificate

Note: A death certificate is issued by the Department of Home Affairs on receipt of a death notice, usually completed and signed by a medical doctor.

• Certified copy of the surviving spouse’s ID
• Certified copy of the appointed Executor’s ID
• Certified copy of marriage certificate, divorce order and settlement agreement, predeceased spouse’s death certificate (if applicable)
• Antenuptial contract (if Married Out of Community of Property)
• Original last will with codicils or documents intended as such (if the deceased person has a will)
• Affidavit by next of kin (form J192) (if the deceased did not have a valid will)
• Inventory of assets and liabilities (form J243)
• Nomination of executor and certified copy of the ID of person nominating the executor (in the case of an intestate will, or if no executor has been nominated in the will, or the nominated executor has died or declines the appointment)
• Undertaking and Acceptance of Master’s Directions, completed and signed by the person nominated as executor (form J155) (in duplicate)
• Declaration that the estate has not been reported to date
• Police report or affidavit (if the person’s death was due to unnatural causes)
• Declaration of marriage by the surviving spouse indicating how the deceased was married (if relevant)
• Acceptance of Trust as executor (form J190)
• Undertaking and Bond of Security (form J262) (unless the nominated executor has been released from providing security as stated in the will, or is the parent, spouse, or child of the deceased)

Documents required for estates less than R250 000 to obtain a Letter of Authority

A Letter of Authority authorises the nominated representative to administer the deceased estate without following the full procedure set out in the Administration of Estates Act.

Although, the following documents are still required:

• Completed death notice (form J294)
• Certified copy of the death certificate
• Certified copy of marriage certificate, divorce order and settlement agreement, predeceased spouse’s death certificate (if applicable)
• Antenuptial contract (if Married Out of Community of Property)
• Declaration of marriage by the surviving spouse indicating how the deceased was married (if relevant)
• Certified copy of the ID of the person to be appointed as Master’s representative
• Original last will with codicils or documents intended as such (if the deceased person has a will)
• Affidavit by next of kin (form J192) (if the deceased did not have a valid will)
• Inventory of assets and liabilities (form J243)
• Nominations by the heirs for the appointment of a Master’s representative (in the case of an intestate will, or if no executor has been nominated, or the nominated executor has died or declines the appointment)
• Declaration that the estate has not previously been reported
• Undertaking and Acceptance of Master’s Directions, completed and signed by the person nominated as representative of the Master (form J155) (in duplicate)
• Police report or affidavit (if the person’s death was due to unnatural causes)

What is Estate Administration?

The administration of a deceased estate is prescribed by the Administration of Estates Act (Act 66 of 1965) as amended.

Estate Administration is the process whereby a deceased person’s assets are either redeemed or transferred and their debts paid. The balance of the assets is then transferred to the beneficiaries of the person’s estate, as indicated in a will. If there is no will, it is done intestate.

The administration of a deceased estate can be lengthy, complicated, and highly technical. It can take anything from a few months to a few years to wind the estate down. Therefore, the estate administration process usually requires professional expertise.