The administration of deceased estates is governed by the Administration of Estates Act 66 of 1965 (the Act) and whilst this comprehensively sets out the process that an executor or his agent needs to follow, the executor must still rely on many third-party institutions to fulfil their duty.
Below we have set out some of these institutions and where, if possible, further delays can be avoided.
The Master of The High Court.
While you nominate an executor in your will, it is the Master of The High Court that formally appoints the nominated executor by issuing Letters of Executorship for gross estate values above.
R250 000.00 or the Letters of Authority for estate values under R 250 000.00.
Currently, the issuing of the Letters of Executorship can take between two to four weeks to receive from the Master of The High Court in Johannesburg but longer in areas such as Pretoria or Cape Town.
Delays have been caused in the past due to staff shortages, load shedding, systems being offline and, in some cases, the Master of The High Court’s offices misplacing files. In cases where we need to obtain copies of joint wills from A predeceased spouse’s estates, not being able to access the files from the Masters offices offsite storage facilities for various reasons.
So, while the executor has no control over the Master of The High Court’s internal processes, it is important that the estate is reported correctly from the beginning and this begins by ensuring that all the necessary documents are available such as marriage certificates, identity documents, antenuptial contracts, divorce orders etc.
South African Revenue Service (SARS)
As the saying goes, there are only two certainties in life: death and taxes and the finalisation of the estate taxes can be one of the biggest hurdles to expedient finalisation of an estate.
the current delays that we are experiencing with SARS starts with the coding of the deceased estate. It can take 21 working days and, in most cases, longer before we receive a confirmation letter from SARS confirming that the deceased tax number has been coded as a “Deceased Estate”. SARS will also advise which tax years are outstanding.
It is then necessary for the appointed representative taxpayer must be loaded onto SARS e-filing. For SARS to confirm the application has been successful can take from one week up to three months, in some cases even longer and telephonic appointments must be scheduled for the executor/agent and SARS to attend to this. In some cases, the first, second, or third attempt is still not successful, and each time a new appointment must be scheduled. Another recent obstacle we have experienced is that the appointed executor/agent can only be booked for one appointment at a time, in other words, if the executor has booked an appointment for a specific day, the tax consultant can only book another appointment after the initial appointment has been honoured.
Once the representative taxpayer details have been updated can the tax consultant submit the tax returns via e-filing. SARS’s current turn-around time to respond to the submission is 21 working days Please note that this is only a confirmation of the submission not the finalisation of the assessments. The tax consultant can thereafter only follow up with SARS every 21 working days, should you follow up before the expiry of the first turn-around time, then a new 21 days will be triggered.
SARS will allocate the file to an official who will attend to the assessments, should the file be triggered for auditing then the audit department’s turnaround time is 90 working days.
There may also be situations where the estate receives income post death such as rental, substantial interest etc. In these cases, the estate then needs to be registered (as per above) as a separate tax entity and a post death return must be submitted and audited.
SARS will advise whether the calculations have been accepted with no changes or whether they require additional documentation. Should there be a refund payable to SARS then the tax consultant will be requested to update the estate’s late banking details. Like for the registering of the representative taxpayer, an appointment must be made telephonically for the banking details to be updated.
Once the assessment is paid or a refund has been received, will the tax consultant be able for the Estate Compliance Certificate. This is like a Tax Clearance certificate for the estate which will enable us to close the file at SARS.
How to avoid further delays: Ensure your taxes are up to date and all necessary documentation is available.
During the administration process, any fixed property registered in the name of the deceased person will at some point need to be transferred or sold out of the estate.
If there are any issues with the title of the property, such as unclear ownership, unresolved liens and encumbrances, or missing / outdated building plans can and will cause delays in the administration process.
Ensuring that you know where your original title deed is – is a huge step in the right direction.
Like fixed properties, any motor vehicles registered in the name of a deceased person must be transferred to the heirs or sold from the estate.
It is therefore imperative that the executor has the original registration document available to be able to affect the transfer or sale.
Applying for lost original registration documents is an onerous task and will affect the administration process. It is also important to ensure that licenses are up to date and to ensure that any motor vehicle that have been stolen / scrapped are no longer registered under your name at the licensing department.
The main object is to ensure that the firearms are safely stored, locked, and away from unauthorised access. It is vital to remove the firearm from the deceased name.
Ensure all firearm licenses are up to date and any firearms sold during the deceased lifetime are no longer registered under their name.
Delays are occurring with the banking institutions due to the vigorous fraud verification processes they must follow to ensure that they release the deceased’s funds to authorised person.
Part of this process is checking with the Master of The High Court’s online portal, which as mentioned above, can be offline.
Each bank has its own turn-around times which vary and each action such as obtaining certificates of balances, tax certificates, proceeds, and closing statements, can and often does involve different departments.
While third party processes are unavoidable, further delays can be avoided just by having the correct / updated documents available and we suggest that create a “life file” that includes all original documentation necessary.
Should you wish for us to forward you a guide to creating such a file – please contact us through the Contact Us portal and we gladly forward this onto you.
Author: Suret Hunt