1. Legal Quotes
“The law is a sort of hocus-pocus science that smiles in your face while it picks your pocket.” [H L Mencken]
“A man who dies without a will has lawyers for his heirs.” [unknown]
“A law suit is a fruit tree planted in a lawyer’s garden.” [Italian proverb]
2. Legal short
Why did God invent attorneys? So that estate agents could have someone to look down on.
3. Around the world
The World Health Organisation (WHO) stated on Friday that West Africa’s raging Ebola virus epidemic now constitutes an international health risk.
Liberia’s health care system is collapsing amidst Ebola fears. Heathcare workers, doctors and nurses are abandoning hospitals out of fear of contacting the deadly virus.
Advocates Barry Skinner and Carol Sibaya, two evidence leaders of the Seriti Commission of Enquiry into the multi-billion rand arms deal have quit, claiming vital evidence was withheld from them. The Mail & Guardian reported on Friday that this points to a cover-up of corruption (as if we didn’t know!).
President Obama has authorised the use of air strikes against Iraqi militants. This allows for multiple strikes against the militants of the Islamic State advancing on the Kurdish capital of Erbil.
4. Inspiring quotes
“Be more concerned with your character than your reputation. Your character is what you really are while your reputation is merely what others think of you.” [Dale Carnegie]
“Be who you are and say what you feel, because those who mind don’t matter and those who matter don’t mind.” [Dr Seuss]
“The purpose of life is a life of purpose.” [Robert Byrne]
5. Quote of the day
“There will be a show of hands in parliament so that we know who is a homosexual and who is not.” [Ugandan law maker Medard Bitekyerezo, referring to a proposed repeal of last week’s court judgment overturning the anti-gay law enacted in February.]
6. The duties of an executor of an estate
There are few sure things in life; death, taxes and attorneys. So who do you appoint as your executor?
Your executor should be someone you trust, and can be your spouse, a family member, a friend, a trust company, a bank or a professional person such as an attorney or an accountant. Your executor, if you execute a will, is nominated in this document. The executor does not necessarily have to have experience in the administration of estates, and can enlist the help of a professional person (this is “the power of assumption” which appears in most wills).
If you die without leaving a will, or your nominated executor cannot or will not take up his appointment, the estate beneficiaries must nominate in writing who they want to act as executor. If the beneficiaries all agree on an executor, the Master will usually appoint this person, but may request the executor to lodge security in respect of his appointment.
If the beneficiaries cannot agree, the Master will appoint an executor.
For estates where the value is R125 000.00 or less (the so called “section 18(3) estates”), a Master’s representative, rather than an executor, is appointed. The procedures to be followed here are much less complicated; once the representative is appointed, he finalises the estate without having to deal with the Master’s office again.
The appointment as executor is not automatic; the Master must first register and accept the will lodged with him as valid, and then accept the nominated executor. Once the Master has confirmed the executor’s appointment, he issues Letters of Executorship, which empower the executor to wind up the estate.
The responsibilities of an executor are numerous, and include attending to every financial and proprietary aspect of the deceased estate, including opening, closing and managing relevant bank accounts, compiling a list of assets (the inventory), liaising with debtors, creditors, banks, SARS and the Master’s office.
The main functions of the executor are to
- control and protect the assets in the estate;
- collect monies owing to the estate;
- draft an account that reflects the assets in the estate, the claims against the estate and how the assets are to be distributed;
- attend to the payment of estate creditors;
- distribute the estate assets as per the will or intestate succession.
An estate must be reported to the Master within 14 days of the deceased’s passing, although in practice this time period is rarely adhered to.
The following documents should be lodged with the Master:
- the original will (if applicable)
- The death notice
- An inventory of assets in the estate
- A certified copy of the death certificate
- An acceptance of appointment as executor form, in duplicate
- A next of kin affidavit
- A list of creditors.
Once appointed, the Executor takes control of the estate and must
- Advertise the estate to enable creditors to register their claims against the estate. (Advertisements must be placed in the Government Gazette and a local newspaper where the deceased resided in the 12 months preceding death. Creditors have 30 days from the date of publication of the advertisement to lodge any claims against the estate);
- Attend to the closing of the deceased’s accounts and give notice on shares, investments, annuities and policies (if beneficiaries have been nominated in policies, they will bypass the estate and be transferred directly to the nominated beneficiary);
- Open an estate account in the name of the deceased as soon as there is R100 in the estate (all monies owing to the estate and investments will be paid into this account and all creditors and beneficiaries will be paid from this account);
- Have the assets of the deceased valued, if necessary;
- Prepare a liquidation and distribution account (“L & D account”), which lists the assets and liabilities, the income and expenditure incurred since death and how the residue of the estate is to be distributed. The L & D account should be submitted to the Master within six months of death and also specifies the cash surplus or shortfall in the estate and the calculation of estate duty (if any);
- Once the Master has approved the L & D account, the account must be advertised in the Government Gazette and in a local newspaper and made available for inspection for 21 days at the Master’s office and at the Magistrates office in the district where the deceased lived to allow for any objections;
- If there are no objections, the executor submits a final tax return to the Receiver of Revenue. Before distributing the estate, the executor must obtain a release from SARS. This will only be granted by SARS once they are satisfied that all outstanding taxes have been paid;
- Once all the creditors have been paid, the executor distributes the assets to the heirs and arranges for the transfer of any immovable property;
- The executor provides the Master with proof that the creditors have been paid and that the assets have been distributed and submits all bank statements of the estate bank account (and proof that it has been closed).
- The executor is paid (if not an agreed fee, he is entitled to 3.5% of the gross value of the estate and 6% of income accrued after death). Other than executor’s fees, additional expenses may be Master’s fees (a maximum of R600), advertising costs, transfer fees of immovable property (transfer duty is exempt if transfer is made to beneficiaries of the deceased); valuation fees, bond cancellation fees, penalty interest and posts and petties.
- The Master closes the estate and the executor’s duties come to an end. An estate, on average takes 12 months to finalise.