Interaction with bureaucracy – in all its forms – has the potential to test your equanimity in the best of circumstances. When a life has come to an end and loose threads need to be tied up, administrative chores rocket at a time when your emotional resources are most under strain.
In these situations, good humour and the capacity to deal decisively with an often bizarre world is a survival skill.
Cathy Miller, a physiotherapist in Cape Town, passed on the following exchange of correspondence last year, which took place after the death of her mother in law. The first is an email to Cathy’s late mother in law from the medical scheme to which she belonged while she was alive:
“Dear Mrs KE Miller
“According to our records, your membership contributions are in arrears with (sic) R1 272. The reason for the amount in arrears is: Account holder is dead.
“Your benefits have been suspended until proof of payment has been received. If no premium is received, a double premium will be deducted from your bank account with the next debit order run.”
Cathy’s husband, Charles, replied to the medical scheme: “Thank you for your letter and for pointing out that my mother’s account is in arrears. The reason, you correctly state, is that she is deceased, and you then state benefits will be suspended until proof of payment has been received.
“I am interested in your offer and wondered if resurrection was part of the scheme of benefits that she was on? If so, I would gladly pay the arrears and more. If, however, this was an oversight, then I thank you for a moment of mirth in the midst of our grief.”
The medical scheme quickly thanked Charles for what it called “the feedback” and expressed its sincere sympathy, saying it was “not aware of the situation as no records were received”.
(If I can chip in with my interpretation here, the computer that writes the pay-us-now letters was aware that Charles’s mom was dead, because it said as much, but it clearly hadn’t informed the computer that writes the sympathy letters, which claimed to be in the dark. And the computer that proofreads and co-ordinates the letters generated by the other two computers was obviously in a deep funk and was not talking to anyone.)
But back to the action: the medical scheme asked for a copy of the death certificate to be sent as soon as possible. The family complied – but that was not the end of it. Charles’s sister then received, by post, the same letter that had been sent to her mother, the one that read: “Dear Mrs KE Miller, According to our records, your membership contributions are in arrears. The reason for the arrears is: Account holder is dead ...” and so on.
This is what Charles’s sister wrote at the bottom of the letter, which she sent back to the scheme:
“Do you know what DECEASED means? It means dead, late, no longer alive, no longer needing medical benefits, no longer having a bank account from which a double premium can be deducted. I am not phoning AGAIN, as it has simply NO EFFECT.”
No matter who is appointed as executor – no matter how experienced or competent – the number of unexpected obstacles that the loved ones will face in bringing matters to a close with dignity and respect definitely falls into the category of “how long is a ball of string?” and “how long is a call centre phonecall?”
Marcia Walker, also of Cape Town, had a problem with a life assurance claim when her father was murdered two years ago. “The life assurer said it needed to do a forensic investigation because my father was murdered. This held up payment of the claim, so my mom instantly had cash flow problems,” Walker says.
“Thank goodness for the Ombudsman for Long-term Insurance, who told me I had every right to speak to the forensic department at the life insurance company and demand an explanation, after being told that I couldn’t by two of their call centre agents.”
Walker asked the forensic department what it needed to complete the investigation.
“Was there a newspaper report on the event?” it wanted to know. “If so, send it through to us. That’s all we need.”
So a potentially long and frustrating claims process was brought to a quick conclusion by two phone calls and an email.
The Millers’ experience is symbolic of the small indignities families encounter; the hold-up in the insurance payout that Walker’s family experienced could have escalated into a financial crisis and caused severe frustration if she had not been assertive and financially informed.
Walker believes there should be an ombudsman specifically for the sector that deals with deceased estates. “Of all the industries to need an ombud, this one – the one involved with wrapping up estates – is the one that needs an ombud most.”
Walker says the death of a loved one is a very vulnerable time for many people. “To be able to approach someone independent, who has the power to tackle problems like inefficient estate administration, would surely ease the pressure.”
The Master of the High Court is regarded as the ombud that you need to turn to for relief, so what does the Chief Master think about the role of the office and the need for an ombud?
The Office of the Chief Master believes existing structures should be used as far as possible to save costs and to streamline procedures.
“Some people hold the view that the Chief Master or one of [the] staff designated by the Chief Master as ombud should have authority, of his or her own accord or following on a complaint, to investigate the actions of a Master or designated official, consider the merits of a matter, take evidence, review a decision of the Master or designated official, and give any directions which the ombud deems fit to a Master or designated official,” the Office of the Chief Master says.
Given the choice between taking a Master’s decision to the High Court for review or leaving it unchallenged, the average person will choose the latter because of the prohibitively high cost of litigation, the Office of the Chief Master says. “Masters know there is a small likelihood of their conduct being taken on review before the High Court.”
The Office of the Chief Master adds: “Providing the Master with enhanced statutory powers to become a trier of facts will facilitate a far more expeditious and cost-saving form of dispute resolution.
“Currently, people misuse their access to the Office of the Minister [of Justice and Constitutional Development], Public Protector and Master’s Branch to raise complaints with no substance or try to enhance their own personal goals without following the remedial steps set down by the Estates Act.”
The Office of the Chief Master is of the opinion that the legislation, regulations and practice for the Ombud for Financial Services Providers can be adapted with a few changes to deal with matters dealt with in the Master’s office.
Part of the armoury that the Ombud for Financial Services Providers has at his or her disposal for setting standards and disciplining financial professionals is the Financial Advisory and Intermediary Services (FAIS) Act. The Act contains a code of conduct, which requires that the professional puts your interests before his or her own. What an exacting standard that is; I dare say it would also be a painful one for the underachievers in the fiduciary business.
The FAIS code requires that the financial professional discloses all relevant costs and their implications. Now wouldn’t that be an improvement on current practice in the fiduciary business? I have had two wills drawn up in my life – once by a bank and once by a lawyer – and on neither occasion was the subject of executor fees broached. Needless to say, a third will is in the offing. Hands up – which of you dear readers have had the pleasure of spontaneous full disclosure of executor fees and their implications when drawing up a will?
Piet Nel, a senior lecturer in taxation at the University of Pretoria, thinks a code of conduct for fiduciary professionals similar to the FAIS code “may be a good idea, but the problem with regulation is that it adds to the cost. It is universally true that when an industry is regulated, the fees increase.”
Bad choices when writing a will and long delays in the winding up of an estate also have a cost – both monetary and emotional. Perhaps you and I would be willing to pay more for greater regulation in the knowledge that laying out a bit more upfront will ensure savings down the line.
In the meantime, the best protection you can leave your loved ones is to make sure you are fully informed about estates and executors, and to put that knowledge into practice.
* This article was first published in the 4th quarter 2010 edition of Personal Finance magazine.