01 Jun WINDING UP A DECEASED ESTATE
A Will stipulates what should happen to your estate when you die. An estate refers to all the assets (material wealth) and liabilities (debts) you have acquired during your lifetime.
When a person dies, all estate assets are subject to the winding up process determined by the Administration of Estates Act, 66 of 1965. It involves having an executor appointed by the Master of the High Court; the executor is legally bound to adhere to prescribed processes and submit all applicable documents to the regional Master’s offices. This takes time and involves costs.
What most people do not know is that the distribution of assets can be separated from the Will. That way, distributions to heirs are not affected by any legal deceased estates processes or bottlenecks at the Master’s offices (currently estimated to be between one and three years). The uninterrupted flow of financial support to families when their bread winners die is an incalculable benefit.
To achieve this benefit, create a Discretionary Living Trust. Once the assets designated in the Trust Deed are transferred into the Trust, they are ‘owned’ and controlled by the Trustees. The crucial distinction is that the Trustees assume ownership, but not enjoyment of the assets. Since the estate no longer owns the assets, the arduous deceased estates winding up process is bypassed.
- You have access to the assets while you are alive.
- There is no waiting for funds to be released to your family when you die.
- Your assets are protected from opportunists.
- Your legacy will continue unhindered.
- Your passing will not incur estate duty.
For more information, refer to the PERSONAL & FAMILY APPLICATIONS section. Greater detail can be found in the ‘Trusts & Wills’ and ‘Trusts & Deceased Estates’ articles.