The loss of a family member or a loved one is a challenging and an emotional life experience. The days and months following the death of a loved one can often go by in a blur.
Help and guidance are essential for families to get their affairs swiftly in order. Putting financial issues off to later will not only leave families with unnecessary financial constraints but it can also lengthen the process of winding up an estate. This is why it is important to update a will annually and ensure that it reflects the wishes of the Testator or Testatrix.
Winding up a loved one’s estate takes time, but we highlight the steps that need to be followed to finalise the estate.
The most pressing and immediate cost facing families after the death of a loved one is the funeral and the associated costs.
“Most funeral homes will not be prepared to wait for payment and will require a substantial deposit before proceeding with arrangements. To settle these costs, first determine whether the deceased held a funeral policy to help settle costs in full or in part. Or there may be an immediate expense benefit on any life cover policy that they may have had. This will go some way to offsetting the immediate costs.”
– Ester Ochse, Product Head, FNB Money Management
In instances where no funeral cover is in place, then the estate is liable for the reasonable cost of the funeral. It is important to keep all the receipts arising from the funeral and to submit a claim to be reimbursed from the estate once an executor has been appointed.
Getting a copy of the last valid will
As the legal document which outlines the deceased person’s last wishes, obtaining a copy of the latest will is the most essential part of the process.
The will is the document needed to determine the distribution of assets, the naming of beneficiaries, and the devolution of the estate. It should also name the executor or executrix of the will and it will act as a guide for executing the deceased’s wishes.
A will is usually stored in a secure place at home or held in safe custody with the bank. If the deceased died without a will, then the family should seek assistance from a deceased estates practitioner and the estate will be administered under intestate succession rules.
Notifying the nominated executor
The responsibility of notifying the nominated executor falls to the family of the deceased. They should provide the executor with the necessary information and documents needed to administer the estate, including details of all the assets and liabilities in the estate.
The executor will require all this information to give effect to the provisions of the deceased’s will or the Intestate Succession Act.
This will also enable the nominated executor to attend to the reporting of the estate to the Master of the High Court, who will thereafter issue the nominated executor with the letters of executorship to commence the administration of the estate.
Securing the day-to-day living expenses
Once the bank account is frozen, debit orders are not processed further. Executors are not able to pay creditors for several months after death and it is recommended that heirs plan to maintain the payments to avoid potential adverse interest charges and possible legal collection charges.
Managing the day-to-day living expenses is important. Many spouses, partners, and children may find themselves in a position where they still require access to funds from the estate to meet their day-to-day living expenses.
It can be particularly stressful if the family is faced with both the loss of a loved one and financial concerns.
Pension and retirement savings
Pension funds benefits are normally not dealt with by the executor. The family need to approach the Pension Fund directly to deal with the deceased’s retirement savings. The family does not need to wait for the Letters of Executorship to begin this claim process.
Each estate is unique and, therefore, it is difficult to provide an accurate estimate of the time the administration of a particular estate is likely to take. This will depend upon the nature and extent of the assets, liabilities, and possible complications.
The executor is required to report to the Master of the High Court should he or she not be able to keep to the timeframes. Keep in mind that the executor can only start with the work required when the Letters of Executorship have been issued by the Master of the High Court.
The executor is not legally authorised to deal with the assets, liabilities, and related complications until the letter of executorship is issued.
There will be a time when we have to manage the estate on behalf of our families. To ensure that you and your loved ones are safe, understand what is needed to wrap up an estate. This will ensure that you and your loved ones are safe in the longer-term.