Management of Deceased Estates

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 outstanding debts including utility bills, credit cards, store accounts and submit the final tax return.

Just from reviewing the functions one immediately realises the responsibilities involved in the management of an estate. Fortunately, the law makes provision for persons not able to perform these tasks and the executor can retain the services of a lawyer or relevant financial institution to handle these tasks.

The executor requires knowledge of tax laws, insurance, court processes, and even administrative tasks.  With shares, properties, offshore assets, insurances, and investments included in an estate it can be a lengthy and rather difficult process. If the person doesn’t have the knowledge, it will lead to delays in winding up the estate. It is furthermore important to select a person you can trust to handle such processes and who will take the necessary steps to appoint a relevant professional to carry out the duties.

You can nominate a natural person such as a family member, friend, spouse or an attorney. You can also appoint an accountancy firm, law firm, financial institution such as a bank or a trust company.

Note that your nomination doesn’t mean that the appointed person or entity will automatically be the executor. There must be an application to the Master of the High Court for this. The executor also doesn’t automatically have to appoint a professional or firm to assist in the process, but the person will certainly be vulnerable and accountable for breaking the law even if they don’t know that they are doing so. It is thus a rather responsible function and best performed by professionals.

If you have been nominated as executor or want to appoint an executor make sure the entity or person has experience in the management of deceased estates.