How Does the Process of Winding-Up & Administering a Deceased Estate Work?

When a person passes away, their estate—comprising assets, liabilities, and personal property—must be settled in a legal process known as winding-up or administration of the deceased estate. This process ensures that the deceased’s wishes are carried out, creditors are paid, and any remaining assets are distributed to the rightful heirs. Here’s a step-by-step guide to understanding how this process works.

Obtain All Required Documents

The initial step involves gathering essential documents:

• Death Certificate: This is crucial for proving the death of the individual.

• Last Will and Testament: If the deceased left a will, the original must be obtained. This document specifies how the deceased wished their estate to be distributed.

• Estate Papers: Collect all relevant documents such as bank statements, title deeds, life assurance policies, and any other paperwork related to the deceased’s estate.

Obtain a Letter of Executorship

Once the necessary documents are in order, the nominated executor or the deceased’s family must apply to the Master of the High Court for the appointment of the executor. This is done by submitting the required documents to the Master, who will then issue a Letter of Executorship. This letter grants the executor the legal authority to manage and administer the estate.

Report the Deceased Estate to the Master of the High Court

To formally begin the estate administration process, the following documents need to be prepared and submitted to the Master:

• Death Notice: This confirms the death and details of the deceased.

• Acceptance of Trust as Executor: A document where the executor accepts their role.

• Next of Kin Affidavit (if applicable): Identifies the heirs or next of kin.

• Section 9 Inventory: Lists the deceased’s assets.

Publish the Notice to Creditors

With the Letter of Executorship issued, a Notice to Creditors must be published. This notice appears in the Government Gazette and a local newspaper, informing creditors of the deceased’s passing and allowing them to make claims against the estate.

Prepare Liquidation and Distribution Account

After a 30-day notice period for creditors, the executor, often assisted by attorneys, prepares the Liquidation and Distribution Account. This account details the deceased’s assets and liabilities, providing a comprehensive view of the estate's financial status.

Payment of Master’s Fee and Submission of Estate Duty Return

During the period when the Liquidation and Distribution Account is available for inspection, the executor is responsible for paying the Master’s Fee and submitting the Estate Duty Return to the South African Revenue Service (SARS). SARS will issue a compliance certificate confirming whether estate duty is payable.

Inspection Period for Liquidation and Distribution Account

The Liquidation and Distribution Account is filed with the Master and published for inspection in the Government Gazette and local newspaper. This account is open for review for 21 days, during which time any objections from interested parties can be lodged with the Master.

Distribution to Heirs and Payments to Creditors

If there are no objections during the 21-day inspection period and the Master approves the Liquidation and Distribution Account, the executor can proceed with the distribution of the estate. This includes:

• Distributing Assets: Transferring immovable property and distributing personal assets to heirs.

• Paying Creditors: Settling any outstanding debts.

• Issuing Final Payments: Ensuring all financial obligations of the estate are fulfilled.

Before final distribution, a SARS compliance certificate must be obtained.

Obtain the Filing Slip

Once all assets have been distributed and creditors paid, proof of this distribution must be provided to the Master. If the Master is satisfied with the distribution, a filing slip will be issued. This slip signifies that the estate is officially finalised, and the executor’s duties are considered complete.

Conclusion

The process of winding-up and administering a deceased estate involves several critical steps, from obtaining necessary documents and legal appointments to distributing assets and settling liabilities. By following these steps diligently and ensuring compliance with legal requirements, the estate can be settled efficiently, respecting the deceased’s wishes and providing closure to their family.