Estate Planning

Estate planning involves the process by which a person arranges and manages his estate so that he, his family and other beneficiaries, may obtain the maximum benefits from his estate during his lifetime and after his death. The goal is for the owner of the estate to obtain the maximum benefits from his property while at the same time enabling him to pass it to his beneficiaries with a minimum of shrinkage caused by income tax, estate duty and other obligations. Therefore it is necessary for the owner of the estate to carefully evaluate his current position, his expected position in the future and his position as at the time of his death and it is recommended that professional advice is sought.

Dying without a will

A person has an opportunity to direct the disposition of his property on his death in a Will, but should a person die without leaving a Will, i.e. intestate, the law has a process for the distribution of the deceased's estate. This takes place by operation of law which may result in the person's estate being inherited by persons other than those intended by the deceased.

Various problems may arise when a person dies without having left a Will. These problems include the following:

1. There will be a delay in the appointment of an Executor to attend to the administration of the estate and this delay may cause inconvenience to the dependents of the deceased;

2. The surviving spouse's inheritance is limited by the laws regulating intestate succession and this may prejudice her and her ability to care for her children;

3. The inheritance of minor children must be paid to the guardian's fund;

4. The unnecessary sale of assets may result from the need to finalise the administration of the estate;

5. The simultaneous death of a mother and father could result in young children not having a nominated guardian;

6. It may not be possible to maintain the necessary continuity with a business enterprise of the deceased;

In view of these problems it is recommended that all estate owners should ensure that
they have a valid Will. However, it is not correct that the death of a person without a
Will results in the automatic forfeiture of his assets to the State.

Administration of Deceased Estates

The usual steps which are taken in the process of winding up a deceased person's Estate, where the value of the assets exceed R50 000  are:

At the death of a person, his/her Estate is reported at the office of the Master, who issues Letters of Executorship, in terms of which the Executor is authorised to administer (wind up) the Estate.

After the Letters of Executorship have been issued, a notice is published in a local newspaper and the Government Gazette, in which debtors are requested to pay their debts and creditors to submit their claims against the Estate within 30 days after the date of publication of the notice.

All amounts owing to the Estate are collected. Fixed property, movable property and shares are appraised by persons specially appointed by the executor, and bank balances are obtained.  Unless the Will provides otherwise, Estate assets may only be sold to pay debts, or with permission of the heirs.

If the Estate is solvent, the Estate debts are paid, or arrangements are made of the taking over of debts by heirs.

Approximately six months after the appointment of an Executor, an Estate Account is prepared and submitted to the Master. This Account is a report of all the assets and liabilities as at the date of death and it also reflects the distribution of the nett surplus between the heirs. This distribution takes place in accordance with the directions in the Will, or where the deceased died without a Will, the distribution is done in terms of the law of intestate succession.

The Master examines the Account and if he is satisfied therewith, an advertisement is placed in a local newspaper and the Government Gazette to the effect that the account is available for inspection, should any interested person wish to object to the Account.

After the Account has lain free of objections, inheritances are paid over to the heirs and any property which he/she inherits is handed over to them. Fixed property, such as a house, is formally registered in the Deeds Office in the name of the heir.

After all the assets have been handed over or transferred to the heirs, and all debts of the Estate have been paid, application is made to the Master for the discharge of the Executor, and this finalises the Estate.

1. Personal information

• Will
• Deceased’s Identity document
• Death Certificate
• Surviving Spouse’s Identity document
• Marriage Certificate
• Antenuptial Contract - (marriage out of community of property)
• Previous marriage
  - Full Names of the previous spouse
  - Divorce Order and Agreement
• Predeceased Spouse
  - Full Names
  - Date and Place of Death
• Children’s full names
• Parent’s full names (deceased)

2. Assets

• Fixed property (ies)
  - Deed of Transfer
  - Details of Bond Account
• Municipal Valuation
• Motor vehicles (s)
  - Registration document
• Details of HP Agreement, Lease or Rental (last statement of account)
• Shares & Unit Trust
  *Unit trust statement of account (certificates where applicable)
  - Share Certificates
• Assurance Policies -
  -Policy contracts
  -Details of account where policy has been secured against
   loan or suretyship
• Investments
• Cheque books
• Fixed Deposit Receipts
• Savings Books
• Documentation relevant to the investment

3. Liabilities

• Last statements of account on all outstanding liabilites

• Confirmation and details of any Suretyships

• All shop cards – Edgars, Foschini etc.

• Funeral Account

• Loan Accounts

4. General Information

• Receiver of Revenue
  -Income Tax Reference number
  -Receiver’s office where last Return was lodged

• Salary / Pension

• Name of Company
  - Address of Company
  - Salary / Pension number

• Medical Aid
  - Name and Address of the Fund Managers
  - Reference number

• Short term Insurance
  - Policy Contract
  - Policy Number