The ABC of Deceased EstatesSeptember 27, 2023
The importance of professional Will draftingSeptember 27, 2023
We know from decades of experience that the most frustrating aspect of deceased estate administration is prolonged and unnecessary delays. We asked our head of estate administration, Vannessa Nicholas, to identify why and where these delays occur and how they can be mitigated.
As a point of departure, please be aware of the legal requirements for the reporting of a deceased estate. Section 102 of The Administration of Estates Act of 1965 sets out the penalties, which in essence states that, “Any person who contravenes or fails to comply with Section 7 (which is reporting a death) shall be guilty of an offence and liable for conviction to a fine or to imprisonment for a period not exceeding three months.”
Sadly, we have had instances where families have notified us of the death of a loved one months after their passing, which by definition, delays the estate administration process. But the issue we wish to tackle in this article is the delays that are caused once we have been notified of the death.
We have written previously about the need for and the importance of preparing a Life File, with originals, certified copies and an inventory of all important documents, particularly your Will and the whereabouts of your original Will. Other important documents include identification documents, marriage or divorce certificates, investments, life insurance policies, property deeds, motor vehicle registration certificates, mortgage bonds, medical aid details, banking details, user names and passwords for your computer and other important accounts i.e. SARS and of course, next of kin details.
Some (few) estates are reasonably straightforward and can be administered quickly and efficiently; others are more complicated by virtue of, for example, family circumstances and asset composition.
Delays occur when:
• Not all personal details/information is available – so please create and maintain a Life File and make your family and heirs aware of its existence. Your family do not necessarily need to know the contents of your Life File, but would just need to know where to locate it.
• Should the deceased be married, the Life File should contain a marriage certificate together with surviving spouse’s identity document
• Should the deceased be married in community of property, the Life File should contain an antenuptial contract.
• The above will ensure that no delay is caused by incorrect marital status.
• Should the deceased be divorced, the Life File should contain a divorce order
• The Life File should also contain the details of a predeceased spouse, i.e., the date of death, place of death and estate reference number and copy of the original Will of the deceased spouse.
We also experience unnecessary and costly delays in the estate administration process in the production of the Liquidation and Distribution Account caused by the following:
• The most common unnecessary delay is caused by heirs not acting timeously to provide the requested and required information.
This can be due to ‘busyness’, being uncontactable, being out of the country or simply not applying themselves to the importance of the matter. No matter how traumatised one may be by the death of a spouse or loved one, it is in everyone’s interests that you respond to requests for information and act timeously in order to assist in the winding up of the deceased estate.
• Far too often we witness disputes and disagreements between family members during the estate administration process. This can often be the case with siblings in blended families, leading to rivalry and disputes that delay matters unnecessarily. This re-enforces the importance of a clear, professionally drafted and updated Will.
We also currently experience considerable delays with financial institutions, such as those associated with obtaining certificates of balance, tax certificates and in closing banking accounts and investments.
The sale of fixed property can also be a major cause of delays when either the rights to the property, or occupation are disputed, or more commonly, the value of the property and sale is in dispute.
Many clients are either a member of a close corporation or a shareholder of a private company and often the CC or company financials are not up to date, thereby causing a delay in obtaining values of members interests and shareholding.
These are some of the more common causes of delays and each can be avoided by the preparation of a comprehensive Life File, co-operation between family members and maintaining up to date company and or CC accounts.
All this re-enforces the importance consulting with your wealth specialist or financial advisor to plan for a harmonious and efficient estate administration process.