by Tobias | 24.May.2016 | Estate Planning
Estate Planning and Handling Best Left To a Legal Specialist Abraham Lincoln is credited with a phrase that has since gained the status of a proverb. The 16th president of the United States is said to have uttered words to the effect that any man who acts as his own lawyer has a fool for a client. The comment was, of course, intended to cast doubts upon the wisdom of such a decision, given the complexities of the law, rather than to imply diminished intellect. Almost everyone is likely to concur with “honest Abe’s” sentiment and be only too happy to accept legal counsel if faced with a serious criminal charge. However, when it comes to estate planning and handling, a significant number of individuals are inclined to believe that they are competent to manage this equally critical task in person. We live in an age in which vast volumes of information on every imaginable topic is freely available to anyone who has access to a personal computer and an internet connection. Much of that information is accurate and of direct value to an enquirer, while some is less so. Unfortunately, a significant quantity of online data can also be misleading and even totally erroneous. Legal advice is considered by many to be unduly expensive and, to address their needs, a number of companies are now providing legal self-help facilities via their websites. The services consist largely of legal forms for every conceivable purpose, including estate planning and handling, which may be purchased and downloaded together with guidelines on how to complete them. In the Unites States, this document...
by Tobias | 06.May.2016 | Estate Planning
The Administration of Deceased Estates in South Africa Most people are aware of the importance of making a will and the need to appoint someone who is responsible to act as the executor. Beyond that, however, unless they have already served in the capacity of an executor, they are unlikely to know a great deal about the actual administration of deceased estates and may also be distracted by stress and grief when called upon to undertake this process. In South Africa, where the individual concerned has drawn up a valid will, the process will then be governed by the terms of the Administration of Estates Act, 66 of 1965. Where no such will exists, the terms stated in the Intestate Succession Act, 81 of 1987 will apply instead. Another contingency which may have a bearing on the process is whether the individual responsible for the bequest passed away within the Republic or whilst visiting or living in another country at the time of his or her death. Finally, depending upon whether the total value of the deceased individual’s estate is less than R200 000 or more than this, the required process will differ, with that applicable to the larger amount becoming proportionately more complex. In the latter instance, the process begins by applying to the Master of the High Court for a letter of executorship, upon receipt of which, one is then required to advise the South African Revenue Services (SARS) and any other relevant institutions of the death. Thereafter, a minimum of five further steps will be required before an executor is legally permitted to begin distributing the...
by Tobias | 11.Apr.2016 | Estate Planning
A Task Best Left to the Professional Deceased Estate Administrators The loss of a spouse or partner is, in itself, a sufficiently traumatic event. It is, however, a situation that can prove even more so in the event that the bereaved is not sufficiently prepared to handle the financial practicalities that have become the inevitable accompaniment to death in our modern society. Winding up a deceased estate is a process that is clearly defined in law and one that is required to proceed according to a sequence of essential steps for which the responsibility will reside with the appointed executor. The latter may be a family member or a firm of professional executors as indicated in the deceased’s will once validated by the Master of the High Court. Whether assigned to an individual or to an official body, such as a bank or a trust company, the duties of the executor remain the same. These may be summarised as assuming control over the various assets that comprise the estate with the overall aim of protecting and preserving them. The first practical step in the procedure will be to identify, locate and notify each of the beneficiaries named in the will. In some cases, this may involve tracing the individual names and perhaps hiring a specialised agency to do so. Any expense involved must be covered by the executors, but may be recouped later from the proceeds of the deceased estate. In addition, the law entitles the executor to levy a fee that, excluding VAT, must not exceed 3.5%* of the total value of the estate’s assets. Before finally undertaking...
by Tobias | 15.Feb.2016 | Estate Planning
We have answered a few of the frequently asked questions regarding wills, deceased estates, trustees and beneficiaries below. Having a better understanding of some of the key terms used by deceased estate handlers will help you understand the importance of obtaining legal advice regarding your will or right to inherit. What is the deceased estate The collective of assets, income and liabilities of the person who died is known as the deceased estate. Note that it is a legal term and not a person. Therefore the estate is vested in the Master of the Court and the executor or executors are appointed to manage or handle the estate. What is the role of the executor? The deceased estate handler has three main tasks to complete, the first being to collect all the assets and then to liquidate the liabilities of the estate, whereafter the balance (assets minus liabilities) are distributed to the appointed beneficiaries. The executor for the duration of the process also takes on legal guardianship over the assets. The executor is therefore not liable for the debts that are more than the assets in the estate and is only the legal representative of the estate. What is an executor testamentary? The Master of the High Court appoints the estate handlers called the executors dative unless the deceased stipulated in their will who should be the executor. In the latter instance, the term for such is executor testamentary. How does the liquidation process work? Once the executor has gathered all the assets, he must settle outstanding debts. For this purpose, certain assets may need to be sold in...
by Tobias | 09.Feb.2016 | Estate Planning
Why an Executor Must Be Experienced in the Management of Deceased Estates The management of deceased estates is a complex task and before you appoint an executor based on friendship or family ties, you should first consider what the role entails. It is essential to appoint someone that is intellectually capable, responsible and committed to ensure correct application of the law and distribution of the assets. What you are basically asking from the executor is to take over your role in managing your deceased estate. The person must have the time and if you choose the wrong person it can mean delays and eventually also court orders. In the meantime, your loved ones will be negatively affected. A brief look at what the management of deceased estates entails will help you to understand why it is important not to make the appointment decision based on emotional, family or friendship ties. The executor’s job is to wind up the estate and to distribute the assets according to the wishes stipulated in your will. The process may seem straightforward enough, but it is time consuming and proper stewardship is required to conclude it successfully. Main tasks that the executor must complete include from taking control over the assets and protecting such, to identification of the heirs listed and location of the relevant persons. It also includes the distribution of the assets to the heirs, drafting of accounts to accurately reflect all the assets in the estate, as well as recording claims against the estate. The person must furthermore record residue where relevant and handle the distribution. The executor must pay any...
