What is a deceased estate?
A deceased estate comes into being when a person dies. The person who has died is referred to as the deceased. The deceased estate consists of all the property s/he owns and debts s/he owes at the time of his death.
Property can be movable (e.g. money, a car) or immovable. Immovable property refers to land and the buildings on the land.
Who has the right to deal with the property of the deceased?
When someone dies, the death has to be reported to the Master of the High Court. The Master’s office is situated at 5 Bathurst Street, Grahamstown. The Master will appoint an Executor if the value of the estate is more than R250 000 and will issue Letters of Executorship. If the estate is valued at less than R250 000 the Master will appoint a Representative and issue a Letter of Authority. The Master may direct that the Executor or Representative be assisted by an attorney for various reasons, for example when the heirs are minors (children under the age of 18 years).
The Executor or Representative must follow the rules of the Administration of Estates Act, 66 of 1965. S/he must ensure that all the debts of the deceased are paid and that all property that remains after the debts are paid is transferred to the rightful heirs.
The Executor or Representative does not become the owner of the property.
Who are the heirs?
If the deceased left a will, the heirs are named in the will. If the person died without leaving a will, s/he is described as having died intestate. A law, called the Intestate Succession Act, 81 of 1987, sets out who is entitled to inherit the deceased’s property.
How is immovable property dealt with in a deceased estate?
When the Master is satisfied that all the debts in the estate have been paid, the rightful heirs have been identified, and what they are entitled to receive from the estate, the Master will direct that the immovable property must be transferred. As with any other property transfer, a conveyancing attorney must attend to the transfer.
The property can either be transferred directly to the heirs, or the property can be sold from the estate and the profit generated from the sale awarded to the heirs. Immovable property in an estate is sold when the heirs agree to do so, or where there is insufficient cash in the estate to pay all debts. The profit from the sale of the property will then be utilised to pay outstanding debts and the balance transferred to the heirs.
Transfer of immovable property to heirs
When the immovable property in the estate is transferred to the heirs the conveyancing attorney must, in addition to the normal transfer documents, also lodge further documents at the Deeds Office proving that the persons to whom the property is being transferred are the rightful heirs.
Transfer of immovable property sold from an estate
When immovable property is sold from an estate, the heirs entitled to the property must consent to the sale. If the heirs are minors (children under 18 years) or a person declared mentally unfit, the Master‘s consent to the sale is required on their behalf. The Master will only consent if it is in the best interests of the parties.
The property must be sold at market value and the Master will require at least two independent valuations to ensure that this requirement is met.
When all documents have been drawn up by the conveyancing attorney and signed by the Executor or Representative, the conveyancer must submit to the Master’s Office the Power of Attorney authorising the transfer of the property, together with a certified copy of the deed of sale and the valuations. The Master will scrutinise the documents and if satisfied that the sale is at market value and in the best interests of the heirs, a stamp will be placed on the Power of Attorney indicating to the Deeds Office that the sale has been endorsed by the Master.
When the transfer of the property has been finalised, the profit from the sale must be transferred to the heirs. In the case of minors the money will be transferred to the Guardian’s Fund at the Master’s office or into a trust if one has been created by the deceased in his/her will.
In conclusion, remember:
- The person appointed by the Master as the Executor or Estate Representative does not become the owner of the property.
- The heirs entitled to the property are determined either by the will left by the deceased or the Intestate Succession Act.
- Heirs must consent to the sale of immovable property, which must be sold at market value.
- The Master must endorse the sale of immovable property from a deceased estate.
- Authors: Ryan McDonald and Thembakazi Mvemve assisted by Brenda Amsterdam.