Duties after the letters of executorship

•Take control of the deceased estate

•Advertise for creditors

•Open the estate late account in the name of the estate (min R1000,00)

•Complete the income tax returns for the estate

•Evaluate to determine if the estate is insolvent or not

•Decide on the method of liquidation to be used in distributing the estate and

•Submit the liquidation and distribution account to the master

Method of liquidation

•The beneficiaries;

•Wishes of beneficiaries;

•Nature of assets;

•Debts against the estate and the value thereof;

•Provisions of the will if there is;

The executor may decide on the following methods of distribution:-

A.To transfer actual assets to beneficiaries unless its against the provisions of the will

B.Do a partial sale of assets especially if there is a shortage in cash or assets of the estate cannot be divided

C.To do a total sale of assets, this could be if the debts of the estate are too high, or there is a testamentary provision to that effect; or

D.The beneficiaries request a total sale

E.And etc

What should be contained in the heading of the account?

•Full name & surname of the deceased

•Account number

•Id no of deceased

•Date of death

•Marital status

•Details of surviving spouse

We then record the following

•Monies received

•Assets available ( we separate movable from immovable assets)

•Indicate if there are any claims pending in favour of the estate;

•Add value of assets combined with money

•Add value of liabilities

•At the end indicates the balance or residue of assets and money that are available for distribution amongst beneficiaries.

What is a recapitulation statement?

It’s a statements that forms part of the Liquidation account and it reflects the following:

•In the assets column it reflects the amount of cash in the position of the executor plus the value of the assets and

•In liabilities column it reflects the debts and legacies payable in cash;

If there is a shortage of cash, the executor has to show how the shortage will be overcome.

Distribution account

The residue or balance reflected in the liquidation account is transferred to the distribution account. Now the executor indicates how the assets will be distributed amongst beneficiaries.

There are other accounts we will read about them in our spare time

Other tasks of the executor

üAdvertise in the government Gazette and the local newspaper which will lie for inspection for 21days

üRespond to objections if any

üSubmit proof of accounts to the master

INTERPRETATION AND RECTIFICATION OF WILLS

 

Interpretation

The distribution of a persons estate is done after his death. If he dies testate, the provisions of his will must be interpreted in order to determine his intention. If there are any disputes emanating from the provisions of the will the court shall interpret the provisions of the will.

The main purpose of interpretation is to determine the intention of the testator. Therefore the intention of the testator is the most important thing in interpretation, since the wishes of the testator must be fulfilled

 

What are the basic principles of interpretation of the will?

•The purpose of the interpretation is to ascertain the intention of the testator

•The intention of the testator must be ascertained by looking first on the will itself. If the intention is clear from the will.

•In the process of interpretation a court cannot make a new will for the testator.

From the above basic principle it transpires that ascertaining testator’s intention is the central point of interpretation.

What are the elements of intention?

•The desire of the testator; and

•The sense in which the testator used the word in his will.

The following are the sources for the interpretation of the will:-

•The will itself

•Evidence about facts, people, things and circumstances affected by the will;

•Evidence outside the will

There are rules applicable or that serve as a guideline when the court interprets a will. Please know the rules.

Rectification of wills

What is a rectification of a will? It’s a correction by the court of an error in the will if there is a mistake. Not drafting a new will.

Rectification is done after the death of the testator. One must not confuse rectification with amendment of a will.

Amendment is done by the testator during his lifetime while rectification is done by the court after the death of the testator.

What are the ways in which a court may rectify the will?

a)Correcting the ordinary errors in the will, eg typing errors and incorrect descriptions

b)Deleting words added mistakenly, and

c)Adding words omitted mistakenly

 

SUCCESSION TEST 2

DATE: 19.04.2017
VENUE: BZ
TIME: 07:30-08:30

COLLATION

It is a principle according to which the executor of the deceased estate, after the death of the deceased, can take into consideration the benefit given by the deceased during his life-time to any heir in distributing the estate amongst certain beneficiaries.

Collation means that the heir of the deceased who has received a benefit from the deceased during the deceased life time (e.g. donation or any particular property) maybe required to return benefit or its value before being entitled to any benefit given to him in terms of the law of succession.

The question may be does collation apply in testate  or intestate succession?

It applies to both.

Who is liable to collate?

These are people who relate to the deceased by blood. Those who are descendants of the deceased.

A.Heirs of the deceased(people who would have been entitled to inherit intestate if the deceased died intestate) and such an heir  must be the;

•Descendants of the deceased (children, grand children or great –children, AND

•The descendant heir must have adiated (accepted) the benefit in terms of the law of succession.

Who is entitled to benefit what has been collated?

Since its only heirs  who are descendants of the deceased who are obliged to collate, it is also that same category of persons who are entitled to benefit what has been collated.

Therefore the other blood relatives of the testator who are not his descendants, even grand-children and great –children if all deceased children were alive at the time of his death are not entitled to inherit what has been collated. For instance the grand-children referred to above though they are descendants of the deceased, would not have collated and therefore cannot benefit what has been collated.

People who are not related by blood to the deceased cannot benefit what has been collated.

What must be collated?

Its important to note that not all the benefits received by the descendant heirs of the deceased during his lifetime need to be collated(or return to the executor after death of the deceased.

What is and what is not subject to collation? Please read on this…..

What is the rationale (purpose) of collation?

The rationale for collation is that in law it is presumed that the deceased would have wanted his descendant heirs to benefit equally from his estate. However, the deceased who makes a will can indicate in his will that he did not want collation to take place or make his will suggest that collation was not intended.

Collation of debts

It is when the collation is extended to certain amounts owed by the descendant heir towards the deceased, only if such a debt has an effect of reducing the deceased estate. If the collection of debt is applicable, the executor will have to minus the amount of debt from the inheritance of the descendant heir.

Collation of debts usually arises when the debt could not be paid by normal collection such as when:

A. The debt has prescribed;

B. Or the descendant who is a debtor has been declared insolvent (meaning his liabilities or debts exceed his assets).

Conclusion

Collation only applies to the heirs of the deceased who are also descendants (in most cases deceased children, with grand –children  and so on only considered if they qualify to represent their parents, who might have died, or been declared unworthy) who have adiated (accepted) the benefit)

 

ADMINISTRATION OF ESTATES
 

We have dealt with intestate and testate succession (rules regulating the distribution of assets when a person has died without leaving a valid will or has died leaving a will… now we closing the law of succession by looking at the administration of estates in detail.

Administration of estates is mainly regulated by the administration of estates Act 66 of 1965! Although there are other Acts which are applicable to a certain extent.

Its important to understand the administration off estates since in the 2nd term you will practically learn the administration of estates, mostly by drawing of accounts during the legal skills module…. Therefore we need the basics.

What is the administration of estates?

It is the process by which the deceased(whether he died intestate or testate) liabilities are settled and the reminder of assets (if any) are distributed and transferred to beneficiaries.

When does the administration of estates commence?

•After the death of the deceased whether intestate or testate

NB! It does not commence while a person is still alive

What is the purpose of administration of estates?

Ø To gather all the deceased assets;

Ø To discover all the deceased liabilities (debts and other obligations such as maintenance);

Ø To then quantify the value of the deceased assets;

Ø To settle his liabilities and

Ø If there are assets remaining (residue)to distribute and transfer those assets to deceased beneficiaries, if he died intestate in terms of intestate succession or if he died testate in terms of his will.

Who appoints the executor?

•If a person dies testate(leaving a will) he may appoint an executor in his will… though the appointment must be confirmed by the master.

•If a person dies intestate, the master is the one who appoints the executor

Types of executors

•Executor testamentary:- this is the executor who is appointed by the testator in the will. He is required to complete the acceptance of executorship, and then his appointment must be confirmed by the master.

•Executor dative:- this is the executor appointed by the master when the deceased has died interstate or the appointment was invalid .

•The executor may appoint co-executors to assist him

The executor may commence his duties only after the letters of executorship also known as the letter of appointment has been issued by the master, except for preliminary tasks which needs to be commenced immediately after the death of the deceased.

What are the duties of the executor?

•Preliminary tasks;

•Finalizing accounts and

•Completing the administration process

Preliminary tasks

Remember they are performed before receiving of the letters of appointment and they are:-

•To interview the family of the deceased soon as possible after the death

(This is to obtain important information that may help in the administration of the estate. E.g. whether there is a will etc.)

•To complete the death notice

•Complete the inventory with estimated value of the deceased entire estate

•Acceptance of executorship

•Both the inventory and the acceptance of executorship must be sent with the copy of the will to the master

At this stage the executor can determine the estate’s assets and liabilities