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A qualified executor to administer your estate can make all the difference (Media Release)Back to Blog Categories
Opinion editorial by René le Roux, Estate Administrator (Media Release 20150301)
Having a will in place, nominating a qualified, experienced executor makes it so much easier to administer the estate of a deceased loved one. However, the role of the executor is often misunderstood. Can one appoint a family member? Will there be costs involved? What do the duties of an executor entail?
An executor has very specific tasks when administering a deceased estate; it is his duty to handle the legal formalities associated with the estate:
Clearly, accepting a nomination as executor entails a lot of work and it can get very complicated in a heartbeat – especially when a dispute arises, or when there are insufficient funds to cover the costs. That’s all the more reason to make sure you nominate an executor who is up to the task and has the necessary knowledge and expertise to complete the process.
For some people it seems like the easiest option to appoint a family member. While it’s common practice to do so, one should be aware of the possible implications. Family members may struggle with emotional involvement getting in the way, thus preventing them from effectively administering the estate. Since family members being appointed are often not qualified enough to handle the process on their own, they will in most cases be requested by the Master of the High Court to approach a trust company, a financial institution, attorney or chartered accountant to assist them with the administration of the estate and act as their agent. In cases like this it will be necessary to give the agent power of attorney before they will be able to proceed.
There are other problems that can arise when appointing an executor:
He has to report the estate to the Master of the High Court and apply for the letters of executorship to be issued in his favour.
He takes immediate control of all the assets in the estate and arranges for bank accounts to be frozen.
Once he has gathered all the information regarding the various assets, these need to be accounted for in a first and final liquidation and distribution account to be lodged with the Master of the High Court.
Incorporated in this account should be a distribution account, reflecting how the estate will be distributed amongst the nominated beneficiaries as per the will of the deceased.
Only once this account has been approved by the Master of the high Court, has been advertised and has been available for inspection and is free from objections, can the executor proceed with the distribution of the estate.
If no will is present, the assets must be distributed to the next-of-kin in accordance with the Intestate Succession Act.
It’s therefore advisable to have a back-up plan in case this should happen.
Trust companies like Efficient BOE, offer more consistency and security than a private executor. If the appointed executor passes away or resigns, another one can immediately be appointed by the firm without having to delay the process. A reputable company also provides peace of mind, knowing that qualified personnel are in charge.
But, what’s it all going to cost? It’s good to know that executors’ fees are regulated, and rates are capped at a maximum of 3.5% (plus VAT) of the gross value of the estate’s assets. However, there are additional costs, including a master’s fee, advertisement cost, rates and taxes clearance figures, and conveyancing costs when there is a fixed property involved.
The executor is entitled to a 6% collection fee on all interest earned on investments and income received after the death of the deceased.
Going straight for the cheapest option is not always your best bet – you will almost certainly get what you pay for.
To make things a little bit easier for your next of kin in the event of your death, open a folder to keep all your important documents: a copy of your will, the details of your executor, your bank statements, insurance policy numbers, as well as proof of all your assets and liabilities. Also include the details of any beneficiaries – even organizations – as well as marriage and divorce papers.
An unqualified and inexperienced person thrown into the deep end of the pool – even when it might be a very trusted family member – is likely to result in confusion and potential disaster. Ask the right questions, and find an experienced and qualified executor who can give you the best possible advice and guidance.
The nominated executor may renounce his nomination as executor resulting in the heirs having to nominate a further executor, which could delay the process.
The nominated executor may pass away before you do.
The nominated executor can be refused by the master of the high court should they be mentally incapable or former insolvents.
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