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