A property or properties are likely to be one of the biggest assets owned within a 'Deceased Estate’ and, as such, requires some special attention with regards to the disposal of property in accordance with the laws applicable to the administration of deceased estates.
When a person dies, their assets will form part of their deceased estate, which will be administered by an executor appointed by the Master of the High Court. The executor will deal with the Estate in accordance with the provisions of the Administration of the Estates Act and the Will where applicable. Where the deceased did not have a Will, the laws of intestate succession will apply to the administration of that Estate. When a person dies, a death certificate is issued, and the estate must be reported to the Master of the High Court within 14 days of the death, who will appoint an executor in line with provisions of the Act.
To assist you to understand better what happens thereafter is Anelda Coetzee, Absa’s Manager Deceased and Insolvent Estates Collections and Recoveries.
“Once reported, the Master of the High Court appoints an executor who is the only person who has the authority to administer the estate. The executor is responsible for taking charge of all assets, settling claims against the estate, and ensuring that the remainder is distributed amongst the heirs.”
Upon appointment, the executor will establish if the estate has sufficient funds to settle the debt of the estate. This includes a home loan with a balance outstanding at the date of death, says Coetzee. “If the estate has sufficient funds to settle the debt of the deceased, the property within the estate will be distributed and transferred to the heirs in line with the provisions of the Administration of Estates Act and the Will, if applicable. If, however, the estate does not have sufficient funds to settle debt, or should there be a cash shortfall which cannot be settled by the heir/s, the executor will need to consider selling assets to settle the shortfall.”
Sometimes it happens that the debts will be more than the assets within the estate, in which case the estate will be administered as Insolvent in line with the applicable legislation.
Should a property be sold out of a Deceased Estate, it should be sold for fair market value to ensure that the heir/s are not prejudiced.
When buying a property from a deceased estate, the potential buyer should be mindful of a number of procedural steps that should be adhered to.
Coetzee provides some examples: "If a property is being sold from the deceased estate, only the executor can give instructions to an estate agent to market the property, and again this is dependent on whether the executor has a letter of executorship from the Master of the High Court. There are sometimes procedural delays in this regard, which potential buyers should explore with the executor, and even those vary dependent on the particular circumstances of the estate.”
Buying a property from a Deceased Estate is, however, somewhat different than buying through traditional means. “The executor steps into the shoes of the deceased as the seller, and where the property is jointly owned, the seller will be both the executor and the joint owner,” says Coetzee. “Once an Offer to Purchase is accepted and finance is in place, a conveyancer is instructed to transfer the property to the buyer,” confirms Coetzee.
The sale of the property must also be approved by the Master of the High Court. “Basically, this means all the heirs of the estate have to consent to the sale and its terms. Before the conveyancer can proceed further, he/she lodges a power of attorney with the Master of the High Court, which needs to be stamped proving the Master’s endorsement and consent of sale,” says Coetzee.
Generally speaking, the winding up of an estate and/or buying or selling a property contained within a deceased estate is determined by the applicable legislation, which must be complied with. Absa, and Coetzee, highly recommend that individuals who own properties consult with a financial advisor, online or directly, to ensure they fully understand the implications of firstly, dying without a will in place, and secondly, having sufficient cover for your debt and executor fees upon death, “It is not just practical to do this, but advisable to think carefully about your legacy and property ownership before you pass away so that those you leave behind are not further burdened.”
Writer : Kerry Dimmer
