David Knott | Fiduciary Specialist | Private Client Trust | mail me |
Following the death of a loved one, those left behind are often distressed to learn that the administration of the deceased estate will take quite some time to finalise.
The Executor of an estate is tasked with the role of wrapping up affairs and distributing assets according to the Will. Having this done as timeously and effectively as possible will minimise the stress on your family – but this is dependent on the elected Executor of the estate.
The role of the Executor is paramount and having a competent Executor dealing with the estate will smooth the families transition back to a new normality. Anyone choosing an Executor would do well to have an understanding of the complex role that the Executor is required to fulfil.
Assuming that a current Will had been signed, the Executor must meet with the heirs to obtain the information required to report the estate to the Master of the High Court in order to obtain the Letters of Executorship. The Executor may not act as the legal representative of the deceased until they have this.
The Executor must then gather information to determine what the estate consists of, where assets are held, the proceeds of life assurances, where heirs may be located, outstanding debts owed and of course the income tax position, etc.
I would advise that while having assets valued for estate purposes, the Executor is dependant upon other institutions and government departments to provide the required information. An experienced Executor will know exactly who to contact, and what questions to ask, to get the correct details in order to speed up what can be a lengthy process.
As the information is received, the Executor will assess the liquidity of the estate, as cash will be required to settle debts, income and capital gains tax, cash bequests and estate duty. It may be that certain assets need to be sold to meet any cash shortfalls and the Executor will need all the heirs to agree to this if they are unable, or unwilling, to contribute to the shortfall.
The Executor will then draft a reflecting his/her administration which, once approved by the Master of the High Court, will allow the Executor to proceed with the transfer of assets to heirs and a cash distribution.
This process may take several months, depending on the complexity of the estate and importantly whether the deceased’s affairs were in order. Having the right Executor ensures that your last wishes will be respected, that taxes will be paid on time, that investments will be properly managed, that creditors will not sue your estate, that beneficiaries will get their just inheritance, and that family disputes are avoided.
You must choose wisely. The wrong Executor can sabotage your estate planning.