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Navigating the Aftermath

Losing someone you love is tough and the admin that follows can be overwhelming. This guide will take you through the process of managing a deceased person’s estate administration in South Africa from the immediate after-death to the final distribution of assets.

Immediate Steps: Getting the Death Certificate

The first step is to register the death and get the death certificate. According to the Births and Deaths Registration Act 51 of 1992 the death must be reported to Home Affairs within 72 hours. You will need to provide:

• Deceased’s ID document
• BI-1663 form (available at Home Affairs or funeral parlours)
• Medical certificate of cause of death (BI-1663)

Additional:

• If death occurred at home, a medical practitioner must be called to confirm death before contacting a funeral home.
• In cases of unnatural death (accidents, suicides, homicides) SAPS must be notified and a post-mortem may be required.
• BI-1663 form must be completed by a medical practitioner or a professional nurse.

This death certificate is required for all the steps that follow.

Notifying Others

Once you have the death certificate you need to notify:

• Banks and financial institutions
• Insurance companies
• Pension funds
• SARS
• Social services (if the deceased was receiving benefits)
• Employers (if applicable)
• Credit bureaus to prevent identity theft
• Memberships and subscriptions (e.g. gym memberships, magazine subscriptions) are to be cancelled
• If the deceased was a business owner, notify business partners, clients and relevant regulatory bodies

Many of these institutions will freeze accounts once notified of death to prevent fraudulent activity.

Appointing an Executor

The executor manages the deceased’s estate. If there is a will, it should name an executor. If not or if the named executor is unwilling or unable to serve, the Master of the High Court will appoint one, usually a close family member or a professional such as an attorney.

According to the Administration of Estates Act 66 of 1965 the executor must be approved by the Master of the High Court before they can act in this capacity.

Additional:

• The executor must provide security to the Master of the High Court unless exempted by the will or if the executor is the parent, spouse or child of the deceased.
• If the estate is worth less than R250,000 a more simplified process can be followed under Section 18(3) of the Administration of Estates Act.

Notifying the Estate

The executor must notify the Master of the High Court within 14 days of death. This means:

• The original will (if one exists)
• Preliminary inventory of assets
• Death certificate
• Executor’s acceptance of trust

Additional:

• If the estate is worth more than R125,000 the executor must advertise for creditors in the Government Gazette and a local newspaper.
• The executor must also notify all known creditors personally.

Estate Late Account

The executor will need to open a new bank account in the name of the estate (often called an “estate late” account). This account will be used to manage the deceased’s finances during the estate administration process.

Additional:

• The executor will need letters of executorship from the Master of the High Court to open this account.
• All income received after death (e.g. rental income, dividends) must be paid into this account.

Gathering Assets and Liabilities

The executor must compile a full inventory of the deceased’s assets and liabilities. This includes:

• Bank accounts
• Investments
• Properties
• Vehicles
• Personal belongings of value
• Outstanding debts
• Mortgages
• Loans
• Digital assets (online accounts, cryptocurrencies, digital media libraries)

Professional valuations may be required for some assets.

Additional:

• If the deceased had firearms, these must be reported to the SAPS within 14 days.

Paying Debts and Taxes

Before any distribution can happen all debts and taxes must be paid. This includes:

• Outstanding personal debts
• Funeral expenses
• Estate administration costs
• Final income tax return (to SARS)
• Estate Duty (if applicable – currently payable on estates over R3.5 million)
• Capital Gains Tax may be applicable on certain assets disposed of at death

Additional:

• If the estate is insolvent (debts exceed assets) the Insolvency Act 24 of 1936 applies.

Distributing Assets

Once debts are paid the remaining assets can be distributed. If there is a will, distribution will follow the will. If there is no will, the Intestate Succession Act 81 of 1987 will determine how assets are distributed to family members.

Additional:

• If there are minor heirs their inheritances may need to be paid into the Guardian’s Fund until they come of age.
• Heirs can adiate (accept) or repudiate (reject) their inheritance.

Closing Accounts

Once all transactions are done the executor will close the estate late account and any remaining accounts of the deceased.

Additional:

• The executor must get tax clearance from SARS before closing accounts.
• Unclaimed funds in closed accounts will be transferred to the Guardian’s Fund.

Filing Final Accounts

The executor must prepare and submit the final Liquidation and Distribution accounts to the Master of the High Court. These accounts will detail all that was done in the estate.

Additional:

• The accounts must be open for inspection at the Master’s Office for 21 days.
• Interested parties can object during this period.

Legal:

• Wills Act 7 of 1953: This act sets out the formalities for a will in South Africa. Make sure the will complies with these to avoid disputes.
• Estate Duty Act 45 of 1955: This act explains when and how estate duty is calculated and paid. Currently, estates over R3.5 million are liable for estate duty.
• Trust Property Control Act 57 of 1988: If the deceased had a trust this act applies to how it should be administered after death.
• Financial Intelligence Centre Act 38 of 2001: Banks and other institutions must verify the identity of the executor before allowing access to the deceased’s accounts.
• Maintenance of Surviving Spouses Act 27 of 1990: A surviving spouse can claim maintenance from the estate if not provided for in the will.
• Reform of Customary Law of Succession and Regulation of Related Matters Act 11 of 2009: This act ensures customary law of succession is aligned with the Constitution, particularly around gender equality.
• Children’s Act 38 of 2005: This act applies when dealing with inheritances for minor children and appointing guardians.

Additional Practical Tips:

1. Keep records: Document everything and keep copies of all correspondence regarding the estate.
2. Communication is key: Keep all beneficiaries informed throughout to avoid conflict.
3. Be prepared to wait: Estate administration can take time, especially for complex estates.
4. Get professional help: For complex estates or if unsure of anything consider hiring an attorney specialising in estate law or a professional executor.
5. Emotional support: Don’t forget to look after yourself during this process. Consider joining a support group or seeing a therapist.
6. Tax implications for heirs: Advise heirs to consult with tax practitioners about their tax implications.
7. Foreign assets: If the deceased had assets in other countries further steps may be required and you may need to engage with legal practitioners in those countries.

Estate administration can be a complicated and time-consuming process taking several months to over a year to complete depending on the estate. While this guide gives you a good overview, it’s often best to get legal or financial advice, especially for bigger or more complex estates. Remember to honour your loved one’s wishes and comply with the law.

By understanding this process and getting help when needed you can get through this difficult time and have your loved one’s affairs settled with dignity and by the law.

Useful Links:

1. Department of Home Affairs: http://www.dha.gov.za/
2. South African Revenue Service: https://www.sars.gov.za/
3. Master of the High Court: https://www.justice.gov.za/master/
4. Legal Aid South Africa: https://legal-aid.co.za/
5. Law Society of South Africa: https://www.lssa.org.za/
6. South African Police Service: https://www.saps.gov.za/
7. Government Gazette: https://www.gov.za/documents/government-gazette

Remember, while this guide is thorough, estate administration can be complex, and individual circumstances may vary. When in doubt, it’s always best to consult with legal and financial professionals.

Read our other article on Debt Review.