Wills

Stellentrust Wills

No estate planning exercise is complete without a will – or wills if the client has assets in a number of jurisdictions. It is necessary for each will to complement and accommodate any other structures, such as a trust or business structure, implemented as a result of the estate plan.

With Stellentrust performing this important role, you will enjoy the benefit of our specialist experience in this complex field. Our clients receive timely, in-depth, and impartial advice, whilst always remaining confident in our discretion, both in the drawing up of a will, and in its professional execution whilst always assessing the immediate needs of the beneficiaries.

As an additional fiduciary service, Stellentrust will assist with the drafting of both the individual and trust letters of intent or wishes for our clients.

Advantages of having a Will

  • Choose who you would like to benefit from your estate.
  • Protect the interests of minor beneficiaries.
  • Nominate guardians for your minor beneficiaries.
  • Nominate an executor or trustees of your choice.

Disadvantages of dying without a Will

  • Strict legislation will decide who inherits your assets.
  • You will not have the opportunity to create a testamentary trust for your minor beneficiaries.
  • You will also not have the opportunity to nominate an executor of your choice.

Please note:
Should you want to donate your organs, you will need to register with The Organ Donor Foundation (free call 080 022 6611) and advise your next of kin of your wishes.

 

Application Forms

Application for Trust

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Confidential Questionnaire

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Application for Will

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Estate Administration

Mourning the loss of a loved one is difficult enough without the added anxiety of finalising their estate.The administration of deceased estates is generally the process of winding up the affairs of the deceased and ensuring that the stipulations in the will are carried out. Each person’s assets, family and goals are unique and the administration of an estate can be a highly technical and complex process, which may appear cumbersome to the uninformed.

In Case of Death

A sudden death in the family can be shocking and traumatising. Here’s a guideline on the immediate steps to take following the death:

  • If your loved one has died of natural causes outside a hospital, call your doctor, who will tell you what arrangements need to be made. However, if they have died of unnatural causes, immediately phone the police.
  • Find the deceased’s will, establish if there are any special instructions for the funeral noted in the will and if the deceased had a funeral policy
  • Make sure that you notify the appointed executor of the will, your financial adviser or broker of the deceased’s passing
  • Phone an undertaker, who will arrange all funeral matters and help with a funeral policy claim
  • Notify the deceased's employer/pension fund
  • Collect all the deceased's documents and make an appointment with the executor, adviser or broker to report the deceased’s estate
  • Co-operate fully with the executor and take him/her into your confidence, particularly about your immediate cash needs
  • Don't take hasty investment decisions before the estate has been finalised. Consult with the executor of the estate on such and other decisions.

The Estate Administration Process

The administration process for estates of a gross value of R250 000 or more is defined in the Administration of Estates Act, in terms of which executors must follow these guidelines:

Notice of estate and appointment of executor

6 to 10 weeks

Preparatory work for compilation of Liquidation and Distribution account

6 to 24 weeks

Investigation of Liquidation and Distribution account by the Master

4 to 8 weeks

Liquidation and Distribution account for inspection

4 to 6 weeks

Finalisation of the estate (after inspection period and no objections lodged)

4 to 8 weeks

Total (of an average estate):

6 to 13 months

Notifying of the deceased estate and appointing an executor

To appoint an executor in an estate, the Master of the High Court must be officially notified of the death. This is set in action by sending certain prescribed documents to the Master. When the Master receives the reporting documents, he examines them and satisfies himself as to the validity of the will (when applicable). If he is satisfied, he appoints the executor by issuing a "letter of executorship".

Only on receipt thereof may the executor officially begin to administer the estate. However, while the executor is waiting for the letter of executorship, he obtains all available information and documentary evidence to determine assets and liabilities in the deceased's estate.

When an executor is appointed in terms of a nomination in a will, the process is known as a "testamentary" appointment. This is a process of appointment which normally runs smoothly.

When a deceased does not leave a will, or does leave a will, but the executor nominated therein has already died, a process must be followed in which an executor is appointed "datively".

This is a process where the major beneficiaries of the deceased must propose and nominate an executor. The interested beneficiaries written nominations must then be submitted to the Master for consideration. Should the Master approve the nominated executor, he will confirm the appointment.

However, the Master may reject the nominated executor's application for certain reasons, and may refuse to confirm the appointment. He may even convene a meeting at which he requests the beneficiaries to nominate an executor.

However, it is not advisable not to nominate an executor by will, as a "dative" appointment may cause much valuable time to be lost, to the detriment of creditors and heirs.

In the case of estates, including community estates, with a gross value of less than R125 000 the Master may waive the official appointment of an executor to carry out the prescribed administration process.

This process takes approximately six to ten weeks.

Compiling a Liquidation and Distribution Account

  1. When the executor receives the letter of executorship, he/she is obliged to place a notice in the Government Gazette and in one or more local newspapers, requesting the creditors of the deceased to notify the executor of any claims against the estate within 30 days. During this 30-day period, the executor continues to obtain valuations of fixed and movable assets in the estate, as well as particulars of the deceased's investments.
  2. As soon as all this information has been received, the executor determines if the estate has sufficient cash to meet its obligations. If not, the beneficiaries are consulted about the way in which they intend meeting the cash shortfall. If they are unable to do so, the executor will sell assets from the estate to cover the cash deficit. Selling of assets often leads to lengthy negotiations with beneficiaries, auctioneers and others, which can delay the administration of the estate.
  3. At this stage, the executor also determines the tax position of the deceased by submitting the necessary returns to the South African Revenue Services.
  4. Compiling a Liquidation and Distribution Account can take up to six months, depending on the size and complexity of the estate. In terms of the Administration of Estates Act, the executor must submit the account within six months of the issue of the letter of executorship, unless the Master of the Court has given permission in advance for a time extension.

Preparation and compilation takes six weeks to six months.

Examination process

  1. On the basis of the information obtained, the Liquidation and Distribution Account sets out all assets, liabilities and administration costs, explains how assets are divided and determines if estate duty is payable. The account therefore sums up the entire administration process.
  2. The account is submitted to the Master of the Court for examination against certain legal rules. The Master may request further information and proof from the executor.

The examination process takes four to eight weeks

Inspecting the Liquidation and Distribution Account

  1. Once the Master is satisfied with the account, the executor makes it available for inspection by concerned parties for at least 21 days. This is achieved by placing a notice in the Government Gazette and in one or more local newspapers, indicating where the account will be open for inspection for the required period. Anyone who has an interest in the estate and who has an objection to the account may lodge an objection with the Master or, when applicable, a Magistrate, during the 21 day period.
  2. The Master refers any objections to the executor for a response. Once the Master has received the executor's response, he will make a decision which must be obeyed by the executor.
  3. If the executor or the person who raised the objection doesn't agree with the Master's decision, they can, within 30 days or any further period of time the Court allows, apply to Court for an order to set aside the Master's decision. This could result in the administration process being postponed indefinitely and the finalisation of the estate taking place only after the objection has been settled.

If there are no objections, the Liquidation and Distribution Account phase takes about four to six weeks.

Finalising the estate

  1. If no objections are made against the Liquidation and Distribution Account, or if an objection has been settled, the executor can finalise the estate. He/she pays the creditors, hands over inheritances to the heirs and arranges for the transfer of fixed property in the names of those entitled to it. The process of transfer can take some time, as there are various legislative requirements to be met.
  2. As soon as proof has been provided to the Master that all creditors have been paid, that the heirs have received their inheritances and that the fixed property has been transferred, the estate is regarded as finalised and the executor's duties come to an end.

The process of finalisation takes four to eight weeks.

Documentation Needed for Settlements

The executor needs specific documents of the deceased to speed up the administration process. If certain documents, such as title deeds of fixed property or share certificates, cannot be traced, the executor must obtain duplicate documents at the expense of the estate, which may create a delay.

The types of documents normally required include:

  • Last signed original will (or particulars of where it can be found)
  • Deceased’s identity document
  • Death certificate
  • Marriage certificate
  • Antenuptial contract (if applicable)
  • Name and date of death of any predeceased spouse (if applicable)
  • Divorce order and deed of settlement (if applicable)
  • Copies of identity documents of all heirs
  • Copies of marriage certificates of all heirs
  • Postal addresses and contact particulars of all heirs
  • Name and address of deceased's employer
  • Deceased’s employee number
  • Pension number, name and address of pension fund
  • Membership number, name and address of medical fund
  • Income tax reference number and office where registered
  • VAT registration number (if applicable)
  • Title deeds/Sectional title deeds/Timeshare certificates or particulars where obtainable
  • Lease contracts
  • Firearm licences
  • Vehicle registration certificates
  • Share certificates or name of institution where portfolio is managed or electronically kept in custody
  • Unit trust certificates/notices
  • Any other investment certificates
  • Last cheque book and bank statement
  • Mortgage bonds
  • Promissory notes in respect of loans owed to the estate
  • Credit cards and any other bank cards
  • Life insurance policies, or full particulars
  • Short-term insurance policies, or full particulars
  • Details of safety deposit boxes at any banks
  • Partnership agreements, purchase and sell agreements and latest financial statements in respect of any business being operated (if applicable)
  • Deeds of sale in which the deceased had an interest
  • Details of all debts owed by the deceased

What Delays Settlements?

The successful administration of estates depends on the service from various external institutions, such as the South African Revenue Service, Master's office, insurance companies and many more. The time spent by these institutions to finalise the affairs of the deceased affects the success with which the executor can conclude the affairs of the estate.

The executor must attend to income tax (including CGT) as well as all other tax aspects such as VAT as on the date of death. If the deceased's tax affairs had not been recorded properly, the executor might experience problems in obtaining all the information and completing the necessary returns. As a result, valuable time could be lost.

The South African Revenue Service must also issue final assessments against the estate, and the processing of the final assessments may also cause valuable time to be lost.

Should the deceased have been involved in litigation before his/her death, the executor must evaluate the risk thereof to the estate, and perhaps continue with the litigation. If the litigation must be tried before a court, much time could be lost in obtaining a court date. It also has the potential that huge expenses will have to be incurred in calling witnesses and to prepare documentation for court purposes.

If the testator has died of unnatural causes, an inquest must be held. For this, witnesses must be called and the SA Police Services must submit their report to the court. The court must then deliver judgement on the circumstances of death. Due to the backlog facing the courts at present, valuable time will be lost. Executors need the judgement of the court to collect certain assets in the estate, such as accident benefits in terms of insurance policies and death benefits under insurance policies younger than two years.

Disputes and discord among the heirs can aggravate things for the executor. This also causes valuable time to be lost in negotiations with the heirs.

To eliminate unforeseen problems with the administration process of estates, it is advisable to have proper and regular estate planning of your affairs done by an expert, your adviser or broker. Proper estate planning will show up deficiencies in your affairs, which can then be addressed timeously. Your will should also be drafted by an expert in conjunction with the estate planning.

Heirs are responsible for the income tax levied on all income collected by the executor from date of death until the date on which the estate is finalised. At finalisation of the estate, the executor will provide the necessary statements reflecting the income accrued during the various fiscal years during which the estate was under administration. The onus rests on the heirs to state the income on their tax returns.

The executor will provide heirs with copies of the Liquidation and Distribution account, as well as the finalisation statements of the estate. Heirs should keep them for purposes of the new capital gains tax.

Disputes and discord among the heirs can also create delays for the executor

Costs

The following costs are typically payable from the funds in the estate during its execution:

  1. Master's fees payable to the Master of the High Court. The formula to determine this is:
  • If the value of the estate exceeds R15 000, but is less than R17 000: R42
  • If the value of the estate exceeds R17 000, then a further R6 is charged for each next full R2 000 by which the gross value exceeds R17 000.
  • Subject to a maximum fee of R600.
  1. Executor’s remuneration, of which the maximum tariff is determined from time to time in the regulations to the Administration of Estates Act. The current maximum tariff (excluding VAT) is:
  • 3.5% on the gross value of the estate assets, including on the gross value of a community estate (excluding assets payable outside the estate direct to beneficiaries), and
  • 6% of all incomes (e.g. rentals, interest and dividends) which the executor collects on behalf of the estate from the date of the testator’s death to the date of final execution of the estate
  1. Valuation costs of assets which have to be valued for estate purposes
  • The Master may insist that the assets of the estate must be valued by a sworn appraiser, and for that the sworn appraiser is entitled to a fee, which is calculated according to a sliding scale. The appraiser is also entitled to levy kilometre charges, which are also calculated on a scale determined from time to time. A sworn appraiser is a person appointed by the Master specifically for the valuation of assets in an estate. Amongst other things, the appraiser must have a good knowledge of property values in the area in which he is appointed. Appraisers are appointed to do valuations of assets in specific areas, and may not do valuations outside the relevant area.
  1. Advertising costs
  • The Administration of Estates Act stipulates that, in the case of each estate an executor has been appointed to administer, the executor must place the following advertisements:
    • Calling upon creditors to prove their debts against the estate
    • Giving notice that the Liquidation and Distribution Account is open for inspection for a given time at a certain venue
  • Both the above-mentioned advertisements must appear in one or more local newspapers published in the area where the deceased ordinarily lived, as well as in the Government Gazette. If the deceased lived in another district within 12 months prior to his/her death, the advertisement must also appear in one or more newspapers in that district.
  1. Costs for the provision of security to the Master in cases where the executor does not qualify for an exemption
  • In terms of the Administration of Estates Act, only certain executors are exempt from providing security to the Master. If a nominated executor does not qualify for the exemption, the Master will insist that the executor provide the necessary security for the value of the estate, before the executor’s appointment is confirmed. The security must be in the form of a Bond of Security, issued by a short-term insurance company. The current annual rate for this amounts to 0,684% on the value of the security, with a minimum annual premium of R300.
  1. Estate bank account bank charges
  • Professional executors, who administer large numbers of estates, negotiate a favourable rate with the bank.
  1. Transfer costs of fixed property
  • Before an estate can be finalised, fixed property forming part of the estate must be transferred into the name of its rightful heir in terms of the Deeds Registries Act. The transfer costs involved are payable from the estate and are calculated according to the value of the fixed property, on a sliding scale.
  1. Cancellation costs of bonds registered over fixed property in the estate
  • The executor must cancel all bonds registered over fixed property forming part of the estate, after the outstanding balances have been settled in full. The costs involved are payable by the estate and are calculated according to the amount of the bond, on a sliding scale.
  1. Funeral costs form part of the claims against the estate and are payable from the funds of the estate

Summary of the Executor's Duties

Only an executor whose appointment has been confirmed by the Master of the High Court may manage the assets and liabilities forming part of the deceased's estate. An executor’s duties are:

  1. To collect all the deceased’s assets. These assets comprise fixed properties, furniture, firearms, vehicles, shares, proceeds of insurance policies, outstanding debts owed to the estate, cash assets and all other possible interests the deceased may have had.
  2. To collect all debts against the estate and to settle them after their validity has been investigated
  3. To divide the balance of the assets among the rightful heirs after all debts against the estate have been paid

The executor must administer the assets of the deceased with utmost care and protect the interests of the creditors and heirs throughout the administration process. The executor reports to the Master of the High Court during the course of the administration process and the Master may request further particulars and specific documentary evidence from the executor at any time.

Once the executor has completed the administration process, as described in the Administration of Estates Act, they will be able to finalise the estate. This involves handing over the inheritances to the heirs. 

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