What Happens to Your Estate After You Die?

From death to distribution: understanding the estate administration process.

When someone dies, their assets do not simply pass to their family immediately.

There is a legal process that must be followed to identify the deceased's assets and debts, deal with the necessary legal and tax requirements, obtain the Master's approval and ultimately distribute the estate to the beneficiaries.

For families, the process can seem complicated and unfamiliar. Understanding the basic steps can make it easier to know what to expect.

The Estate Administration Process at a Glance

The process does not necessarily follow exactly the same path in every estate, and the time required will depend on the circumstances of each estate.

Step 1: The Estate Is Reported

After a person dies, their estate must be reported to the Master of the High Court.

The necessary documents are submitted, including the deceased's death certificate, identification documents, marriage documentation where applicable, information regarding the deceased's assets and liabilities, and the original will if one exists.

The Master then determines the appropriate authority for the administration of the estate and, where applicable, issues Letters of Executorship to the nominated or appointed executor.

Step 2: The Executor Takes Control of the Administration

The executor is responsible for administering the deceased's estate. This involves much more than simply distributing assets.

The executor must establish what the deceased owned, determine what the deceased owed, collect money due to the estate, deal with creditors, attend to tax and other compliance matters, and ultimately ensure that the estate is distributed correctly.

This is why choosing an appropriate executor in your will is an important part of estate planning.

Step 3: Assets and Liabilities Are Identified

The executor must establish the full financial position of the deceased.

• Immovable property
• Bank accounts and investments
• Vehicles and other assets
• Life policies and other benefits
• Business interests
• Money owed to the deceased
• Outstanding debts and other liabilities

Where property is involved, additional work may be required before it can be transferred to an heir or sold.

Step 4: Debts, Expenses and Tax Are Dealt With

Before beneficiaries can receive their inheritance, the estate's liabilities and administration expenses must be dealt with.

This may include outstanding debts, funeral expenses, rates and taxes, bond obligations, administration expenses and applicable taxes.

The executor must also attend to the estate's tax affairs and obtain the necessary compliance from SARS.

This is one reason why having a valuable estate does not necessarily mean that there will be sufficient cash immediately available for distribution.

Property Is Often a Key Part of the Process

Where the deceased owned immovable property, the executor must determine whether the property is to be transferred to an heir or sold.

If it is transferred to an heir, the necessary conveyancing process must be followed.

If the property is sold, the sale proceeds form part of the estate and are dealt with in accordance with the estate's requirements and the deceased's will or the applicable law.

Step 5: The Liquidation and Distribution Account

Once the executor has gathered the necessary information and dealt with the estate's financial affairs, a Liquidation and Distribution Account is prepared.

The account is submitted to the Master for examination and, once accepted, is made available for inspection in accordance with the applicable process.

If there are queries or objections, these must be addressed before the estate can proceed to final distribution.

Step 6: Distribution to the Beneficiaries

Once the necessary requirements have been met and the Master has approved the account, the executor can proceed with the distribution of the estate.

• Paying amounts due to beneficiaries
• Transferring immovable property
• Transferring or realising other assets
• Attending to the final administration of the estate

Once all the required steps have been completed, the estate can be finalised.

How Long Does It Take?

There is no standard timeframe for the administration of every estate.

A relatively straightforward estate with readily identifiable assets and no complications may be dealt with more efficiently. Estates involving immovable property, businesses, minor beneficiaries, tax matters, disputes, missing information or delays in obtaining documents may take considerably longer.

The important point is that estate administration is a process, not an overnight transaction. Good preparation before death can, however, make a significant difference.

Estate Planning Can Make the Process Easier

The administration of an estate begins after death, but effective estate planning begins while you are alive.

Having a valid and up-to-date will, keeping your important documents and asset information organised, considering your children's needs, reviewing beneficiary nominations and obtaining appropriate advice about your property and financial affairs can help reduce uncertainty for your family.

Let Bert Smith Incorporated Help You Prepare for the Future

At Bert Smith Incorporated, we assist clients with wills, estate planning and the administration of deceased estates.

Our role is not simply to prepare a document. We help you consider your individual circumstances, family, children, property and assets so that appropriate arrangements can be put in place.

The best time to understand what will happen to your estate is before your family has to deal with it.