Estate Planning Essentials

  • The Last Will and Testament – it is important to structure the Will in such a manner that it would secure a practical and equitable distribution of the estate, whilst at the same time affording beneficiaries adequate protection and minimising death duties.
  • Trust formation – to serve as a holding vehicle, which could preserve and protect the underlying assets for the dependants of the founder, and their descendants.
  • Asset restructuring – converting a close corporation membership to a shareholding in a company. This could also include:
    • Separating trading assets from conventional investments
    • Incorporating a professional partnership
  • Buy and Sell Agreement – protecting partners in the event of death or disability of one partner.
  • Assurance – identifying the need for income and capital for events such as disability, retirement, funding the acquisition of a business interest (partnership assurance) and for the maintenance of your dependants in the event of your death.
  • Succession – who takes over your sole proprietary, and on what terms?
  • Taxation – what are the donations tax, income tax (including Capital Gains Tax) and Estate Duty implications?
  • Offshore structures – for immigrants, emigrants and SA Residents.
  • Property – should it be bought in the name of an individual, a trust or a company.
  • Asset management – which adjustments would meet future requirements?
  • Employee benefits – how best to structure a Pension or Provident Fund and Group Life Cover

Estate Administration and Execution

Our estate practitioners will submit the following documents to the Master of the High Court:

  • Death notice (reflecting the personal details of the deceased).
  • Inventory (reflecting the assets of the deceased).
  • Death Certificate.
  • Original Will.
  • Acceptance of Trust as Executor.

The Master of the High Court will then issue Letters of Executorship that authorise the Executor to administer the estate.

Our estate practitioners will attend to the following immediately after the first meeting:

  • Communicating with all parties concerned.
  • Calling for Certificates of Balance on all monies held by financial institutions.
  • Arranging for immovable and movable assets to be valued, if required.
  • Submitting assurance claims.
  • Requesting tax returns for completion.
  • Collection outstanding employee benefits from the employer.
  • Ensuring that assets are adequately insured.
  • Collecting amounts owing to the estate.
  • Assisting the surviving spouse and/or next-of-kin with immediate financial problems.

Statutory Requirements

The  estate practitioner will also undertake the following key activities:

  • Placing of advertisement for creditors to submit any claims they may have.
  • Submitting final tax returns.
  • Preparing and submitting a Liquidation and Distribution Account to the Master of the High Court for audit – this is basically a comprehensive statement of assets and liabilities and a distribution statement in terms of the stipulations of the Will.
  • Advertising the Liquidation and Distribution Account for public inspection, once approved by the Master of the High Court.
  • Transferring the assets to the heirs and distributing the estate.

Duties of an Executor

Bearing in mind the short term in office – nine to twelve months on average – an Executor has three main duties:

  • Taking charge of the assets (this does not necessarily mean removing assets, but making sure they are in good hands and adequately insured).
  • Paying outstanding accounts, final tax and any death duties.
  • Delivering and transferring the net assets to the heirs in terms of the Will.

It is not the function of an Executor to actively trade, buy and sell, or arbitrate between opposing heirs. Every effort is made to hand over the assets to the heirs at the earliest opportunity so that they can deal with the assets as they deem fit.

In cases where there are business interests, the Executor will take whatever steps may be appropriate to secure its disposal as a going concern. This means either handing over control to the heirs or finding a suitable buyer.

Where there is a cash shortfall, the Executor may have to sell some assets to cover the amount required. This is done in conjunction with the heirs.

The Executor will at all times remain unbiased and cannot be expected to take sides. His function is merely administrative and is governed by the provisions of the Administration of Deceased Estates Act 66 of 1965 (as amended)

Joint estates (community of property)

Although the assets may be in the name of the surviving spouse, they are subject to the same process prior to their release. The Executor is obliged to account for all assets of the joint estate in the liquidation and distribution account.

Deceased Estates

The administration of deceased estates, in accordance with the last Will and Testament of the deceased, or in terms of the laws of intestacy, where the deceased had no Will.

Meeting with the Next-of-Kin

Upon receipt of notification of the death of a testator/testatrix, a meeting is arranged with the surviving spouse and/or next-of-kin at the earliest opportunity. Reporting documentation is completed at the meeting and the process is explained to all parties concerned.

Reporting Documentation

The availability of the following documents and papers at the first meeting can expedite formalities:

  • Identity documents of deceased and all heirs.
  • Antenuptial contract if married out of community of property.
  • Divorce order and settlement agreement if applicable.
  • Documents of title, such as:
    • Deed of Transfer (fixed property).
    • Registration certificates (vehicles).
    • Share certificates and/or receipts/statements from Central Securities Depository Participants.
    • Fixed deposit receipts/statements.
    • Lease agreements.
  • Life assurance, endowments and retirement annuity contracts.
  • Last payslip or service contract.
  • Medical aid membership card or claim advice.
  • Last income tax assessment or copy of previous return.
  • Recent consumer accounts
    • Municipality
    • Telephone
  • Unused chequebook.
  • Savings statements.
  • Credit and debit cards.
  • Short-term insurance schedule.
  • Outstanding accounts.
  • Any statements or correspondence relating to the financial matters of the deceased.
  • Next-of-kin affidavit if the deceased had no Will.
  • Buy and Sell Agreements in respect of any business interest.
  • Valuations for Capital Gains Tax purposes.

Statutory Requirements

The estate practitioner will also undertake the following key activities:

  • Placing of advertisement for creditors to submit any claims they may have.
  • Submitting final tax returns.
  • Preparing and submitting a Liquidation and Distribution Account to the Master of the High Court for audit – this is basically a comprehensive statement of assets and liabilities and a distribution statement in terms of the stipulations of the Will.
  • Advertising the Liquidation and Distribution Account for public inspection, once approved by the Master of the High Court.
  • Transferring the assets to the heirs and distributing the estate.

Duties of an Executor

Bearing in mind the short term in office – nine to twelve months on average – an executor has three main duties:

  • Taking charge of the assets (this does not necessarily mean removing assets, but making sure they are in good hands and adequately insured).
  • Paying outstanding accounts, final tax and any death duties.
  • Delivering and transferring the net assets to the heirs in terms of the Will.

It is not the function of an executor to actively trade, buy and sell, or arbitrate between opposing heirs. Every effort is made to hand over the assets to the heirs at the earliest opportunity so that they can deal with the assets as they deem fit.

In cases where there are business interests, the executor will take whatever steps may be appropriate to secure its disposal as a going concern. This means either handing over control to the heirs or finding a suitable buyer.

Where there is a cash shortfall, the executor may have to sell some assets to cover the amount required. This is done in conjunction with the heirs.

The executor will at all times remain unbiased and cannot be expected to take sides. His function is merely administrative and is governed by the provisions of the Administration of Deceased Estates Act 66 of 1965 (as amended)

Joint estates (community of property)

Although the assets may be in the name of the surviving spouse, they are subject to the same process prior to their release. The executor is obliged to account for all assets of the joint estate in the liquidation and distribution account.

Fees

Charges to the estate are determined as follows:

  • Master’s fee: on a sliding scale to a maximum of R 600.00
  • Executor’s remuneration: 3.5% calculated on the gross value of the estate (including joint estate) as at death, plus VAT.
  • Income collection fee: 6% calculated on all estate revenue collected after death, plus VAT.

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Crest Trust Services (PTY) Ltd. is an Authorized Financial Service Provider with FSB No: 28966