CAPE TOWN - One of the most important things to consider when drafting your last will and testament is the nomination of an executor who will handle the administration and management of your estate on your death.
An executor is either nominated by yourself by means of a will or, where no will is in place, appointed by the Master of the High Court. In the case of the latter, legislation defines who may be appointed to represent your estate without having to provide security to the Master.
Various important factors to consider include protection of a minor’s inheritance, burial preferences, nomination of guardians for minor children, the administration of offshore assets, your marital regime and special bequests.
An executor is appointed in all estates where the asset value exceeds R250 000, and an estate representative is appointed in estates with an asset value less than that amount.
If you want to nominate an individual to be appointed as executor, the Master of the High Court will insist that the nominated executor appoints an agent (trust company, attorney) to assist with the administration of the estate. This is done by power of attorney, which means that the executor will allow a professional institution to attend to the estate. As executor, you will be required to submit documentation, such as Fica documents, and, in some cases, be required to attend to certain matters in person.
It is not always easy to be an executor, because it requires certain expertise and an adequate knowledge of deceased estates.
The duties of an executor include the following:
- Interpreting the will.
- Locating all the beneficiaries mentioned in the will.
- Compiling a list of documents and information required by the Master of the High Court and lodging of the same.
- Obtaining letters of executorship.
- Depending on the solvency and complexity of the estate, the executor must apply the necessary steps as provided for by legislation:
- Open a bank account;
- Send notices to debtors and creditors;
- Collect information on all assets and liabilities in the name of the deceased;
- Finalise tax affairs with the South African Revenue Service;
- Calculate and pay any estate duty, if applicable;
- Compile and lodge a liquidation and distribution account; and
- Pay debts and administration charges.
- Distributing the estate assets.
- Finalising the estate.
Proper administration ensures that the letter and spirit of your will is followed professionally with care and insight, guided by focused expertise.
Before making such an important decision in your will, the following suggestions may be helpful when considering your executor:
- Consult a financial adviser concerning estate planning to obtain answers to the following questions about your estate:
- What will happen if the nominated executor predeceases you or emigrates?
- Does your estate consist of sufficient liquidity, or funds that can be easily redeemed to cover liabilities?
- Do you have credit life insurance on your debt?
- To whom do your life policies pay (your estate or nominated beneficiaries), and how will this affect estate duty?
- Do you have offshore assets, and if so, how will these be dealt with in your estate?
- When drafting your will, seek legal advice from an institution or person who is an expert in the field.
- Check whether the nominated executor offers negotiated executor's fees. The executor of your estate charges executor's fees for the service of administering and finalising the estate. These fees are regulated by statute and are set at a maximum of 3.5% (plus VAT). However, they are often open for negotiation, depending on the size and complexity of the estate.
- When nominating your spouse or any other trusted individual to be executor of your estate, careful consideration must be given as to whether the person will be able to administer the estate during an emotional time and whether the nominated person is adequately equipped to take on the appointment.
Death is never easy on the people left behind. However, by ensuring that you have a valid will in place and nominating a capable executor, you are taking care of your family today in preparation for the day when you will no longer be able to.
Christel Botha is fiduciary services manager at Alexander Forbes.
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