National Wills Week – the role of an executor can be complex

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Jeffrey Wiseman | CEO | Momentum Trust | mail me


The COVID-19 pandemic has increased awareness around mortality and the administrative and financial burden that surrounds the passing of a loved one.

The most recent estimates by the Master of the High Court are that as many as 70% of South Africans do not have a legally executable will. What this means is that for many South Africans, the death of a family member or loved one is surrounded by confusion, disarray and conflict.

The function of a will and the role of an executor are issues that South Africans are urged to look into, particularly in the run up to National Wills Week, which takes place from 13 – 17 September 2021.

The role of the executor

Leaving a lasting legacy in the form of wealth and assets is a lifelong endeavour that people take pride in. We understate the gravitas of this and the importance of making sure that your loved ones do not undergo undue emotional strain when wrapping up an estate and distributing assets.

One of the most significant decisions you’ll make around your will, is who will fulfil the role of the executor so it’s important to understand the intricacies involved.

The money and/or property that an individual leaves behind when they pass away is referred to as a ‘deceased estate’. These assets are administered and distributed according the deceased’s will or by the Intestate Succession Act, should the deceased not have a will.

The executor, who is nominated in the will and legally appointed by the Master of the High Court, is the individual who facilitates the process of carrying out the directives as set out in the will.

The role of an executor is largely administrative in that the appointed individual will facilitate the disbursement of the deceased’s property to the nominated beneficiaries, obtain information on potential heirs and work with creditor’s claims.

Who qualifies to be an executor?

Executors can be someone who has a personal relationship with the deceased or an independent person or entity who fulfils the role in the event of their passing. Some individuals may opt to appoint a family member as executor to save on executor’s fees, but this is not without its pitfalls.

The reality is that executor’s fees are inescapable, and the hidden costs associated with death can become an added expense for a family member or loved one, in addition to emotional pain and bereavement.

Hidden fees include lawyers’ fees, advertising costs, expenses involved with selling or transferring assets and administrative costs. What many don’t realise is that executorship can be an onerous task, and the winding-up process of an estate can take up to a year (or longer).

Appointing an independent entity as executor can help circumvent the administrative burden.

The role of an executor is complex, and the process of administration is often lengthy and includes the following steps:

  • The process of wrapping up a deceased estate begins upon the passing of the individual, when the executor’s role is actuated as per the will.
  • The estate must be reported to the Master’s Office within 14 days of the date of death by the executor who will meet with the deceased family to collate all necessary information.
  • An inventory of the deceased’s assets will need to be compiled and submitted along with an application for a formal Letter of Executorship.
  • Once the competency of the appointed executor has been determined, the Master of the High Court will grant the executor the legal authority to facilitate all matters relating to the estate. This preliminary process can take up to 3 months.
  • If the deceased has a will, their assets will be distributed according to it. Alternatively, in the absence of a will, the Intestate Succession Act will govern the distribution of all assets.
  • The executor is required to provide the Master with proof that the estate has been liquidated, according to the instructions as set out in the will as well as proof that creditors were paid, property was transferred and any other related administrative admissions.
  • Upon conclusion, the Master will issue a filing slip and formally close the estate.

Complexities

There are various complexities that may arise in the distribution of a deceased estate. The solving of these complexities will rest on the shoulders of the executor.

The complexities may include issues such as:

  • Delays relating to an instance in which the deceased died of unnatural causes;
  • Conflict that arises when a will is contested;
  • Liquidity and debt-related issues;
  • Conflict that arises when the deceased has not included a clause to cover his/her residual estate (the property that has not been formally distributed);
  • When a surviving spouse, ex-spouse or child lodges a claim against the estate for maintenance costs;
  • Delays caused by administration processes conducted by the Master’s Office, SARS, banks and financial institutions;
  • Admin related to settling tax obligations with SARS; and
  • Contacting heirs who live abroad.

In conclusion

Estate administration can be a lengthy and complicated process which involves facilitating communication between and with beneficiaries, creditors and debtors. For this reason, many individuals opt to appoint a professional executor who can provide assistance that is unemotional and impartial. When appointing a professional executor, it is also possible to negotiate executor fees.

Apart from having an innate sense of determination and the ability to solve complex-problems, executors should possess a skillset that is conducive to taking on administrative and financial tasks that can involve a number of challenges.


 



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