Administration of Estates

Preface
The three Afrikaans editions of Boedelbereddering have been well received by candidate attorneys, students,
teachers and practitioners. The launching of an English edition of the work is an endeavour also to make the
subjectmatter available to English speakers who may have to deal with the topic in question for various purposes.
Although the work does not profess to be the last word on the winding up of deceased estates, most of the salient
points of the subject have been dealt with and it is to be hoped that the comparatively wide selection of forms,
precedents and practical notes will serve a useful purpose.
The authors wish to thank Pieter Uys, attorney of Pretoria, and Herklaas Nel, of the Pretoria Master's Office, for
their contributions towards some of the annexures. Doepie de Jongh is thanked for her professional and effective
handling of a rather taxing portion of the manuscript. Without Hester de Beer, things would have gone less
smoothly.
It is, of course, always a pleasure to be associated with Butterworths and in this regard the authors owe a debt
of gratitude to Marjorie Guy, who remained charming, cool, calm and collected at all times. Thank you, Marjorie!
PRETORIA
POTCHEFSTROOM NJ WIECHERS
October 1996 I VORSTER
Chapter 1
A brief overview of current legislation applicable to the administration of
estates
1.1 Introduction
1.2 The unchaining of deceased estates from discriminating laws and procedures
1.2.1 Introduction
1.2.2 The judgment of the Constitutional Court
1.2.2.1 Constitutional values
1.2.2.2 Male primogeniture
1.2.2.3 Redistribution agreements
1.2.2.4 Renunciation by a descendant
1.2.2.5 Estates already in the process of being administered
1.3 The jurisdiction of Magistrate's Offices with regard to intestate estates
[Page 13]
1.1 Introduction
When an estate is handed over to the administrator, certain very important aspects have already been taken care
of (or left undone, as sometimes happens). These aspects are estate planning and the drafting of the will. If these
aspects have not been properly handled, some awkward problems are bound to arise in the process of
administration. In that case, the administrator simply does the best he can under the circumstances. However, if the
preceding steps have been handled with care and forethought, the actual winding up of the estate will be so much
easier. The administration process, therefore, largely depends on the foundation that has been laid.
In South Africa, various Acts and statutory regulations govern deceased estates. The following are applicable at
present.
The Administration of Estates Act 66 of 1965, as amended, may be regarded as the basic broad legislation
governing the entire spectrum of legal provisions relating to the administration and distribution of deceased
estates. The Act also deals with the property of minors and persons under curatorship, derelict estates, and the
rules pertaining to the rights of beneficiaries in terms of joint wills by two or more persons. The Act includes
additional and associated matters pertaining to the above.
The Administration of Estates Act applies to the estates of all persons who died after 2 October 1967 and
replaced the old Administration of Estates Act 24 of 1913. Throughout this work, Act 66 of 1965 is meant when
reference is made to the Administration of Estates Act.
Of particular importance are the regulations promulgated in terms of section 103 of the Administration of Estates
Act, which contain details of certain administrative matters relating to the administration process. Among other
things, these regulations prescribe the form for submitting death notices and inventories of estate assets; specify
how the Liquidation and Distribution account must be drawn up. They also set out how executors must apply for an
extension of the specified period for the lodgement of the first and final Liquidation and Distribution account and
prescribe certain tariffs of remuneration and moneys payable .
The Wills Act 7 of 1953, as amended, consolidates the legal provisions relating to the execution of wills.
The Intestate Succession Act 81 of 1987 regulates the law relating to intestate succession the situation that
arises whenever a person dies without leaving a valid will. This Act, which came into operation on 18 March 1988,
replaces all previous common law as well as statutory rules relating to this aspect.
It should be noted that the word "spouse", where used in this Act (and in this publication), includes a party to a
monogamous Muslim marriage (in terms of Islamic rites) (see Daniels v Campbell NO and Others 2004 (5) SA 331
(CC)), as well as same sex marriages, but not socalled "common law" marriages .
[Page 14]
The Maintenance of Surviving Spouses Act 27 of 1990 provides for a surviving spouse to lodge a claim for
maintenance against the estate of the deceased spouse under certain circumstances.
It should be noted that the word "survivor" as defined in section 1 of this Act includes a party to a monogamous
Muslim marriage (in terms of Islamic rites) (Daniels v Campbell NO (supra)).
The Matrimonial Property Act 88 of 1984 has drastically changed existing law relating to matrimonial property
by introducing the accrual system. At the dissolution of a marriage subject to the accrual system, at the death of
one or both spouses, the spouse whose estate shows no accrual or a smaller accrual than the estate of the other
spouse, or his estate if he is deceased, acquires a claim against the other spouse or his estate for an amount equal
to half of the difference between the accrual of the respective estates of the spouses. The accrual of the estate of a
spouse is the amount by which the net value of his estate at the dissolution of the marriage exceeds the net value
of his estate at the commencement of the marriage. The Act also applies where a marriage is dissolved by a divorce.
In all cases where the deceased was married in community of property, the joint estate needs to be administered
upon the demise of the first dying. This necessarily leads to the surviving spouse being awarded onehalf share of
the joint estate in the Liquidation and Distribution account. This is, strictly speaking, not really an inheritance, as
onehalf share already belongs to the surviving spouse by virtue of the fact that he/she was a party to a marriage
in community of property. As the joint estate is administered, the description in the L&D is given as "onehalf share
by virtue of the marriage in community of property and onehalf share by virtue of clause 4 of the will of the
deceased dated 2 September 2009". The above illustration serves as an example of such a situation and will not
necessarily apply in every instance.
The Trust Property Control Act 57 of 1988 provides for effective control over and protection of trust property.
Most problems regarding trust property are solved by this Act. This Act replaced, among others, the Trust Moneys
Protection Act 34 of 1934.
The Estate Duty Act 45 of 1955, as amended, provides for the imposition of an estate duty on the estate of
deceased persons and matters incidental thereto. It might be worth mentioning here that a former Minister of
Finance, in his budget speech delivered in Parliament a few years ago, stated (amongst other things) that the
abolishment of estate duty is being considered by the Revenue Authorities. The subsequent Budget Speeches did
not contain any further information on this matter, but it is still very firmly on the radar of the revenue authorities,
as Judge Dennis Davis has been tasked with reviewing the whole estate duty situation and a report should be
issued in the not too distant future. It, however, does not appear as if Estate Duty will be abolished altogether.
The Immovable Property (Removal or Modification of Restrictions) Act 94 of 1965. The purpose of this Act is to
bring an end to the potentially unsatisfactory situation where a testator creates a lengthy fideicommissum by
instituting numerous fideicommissary substitutions over fixed property. Some extreme cases have occurred, for
example where a testator stipulated that a farm should remain in his family for 99 generations.
[Page 15]
Section 6 of the abovementioned Act prescribes that a fideicommissum created after the commencement of the
Act in favour of two or more consecutive fideicommissarii, notwithstanding contrary provisions in the will or
document in which the fideicommissum was created, will be limited to only two substitutions. Therefore, when the
property in question passes to the second consecutive fideicommissarius, t h e fideicommissum lapses and he
acquires unencumbered ownership of the property, irrespective of the wording of the will, so even if the will states
that "the property is to be passed on from one generation to the next within my family for a period of ten thousand
years". Such a fideicommissum will lapse as set out above irrespective of the wording of the will and the intention of
the testator.
Section 7 of the Act governs the position with a certain measure of retrospective effect insofar as it provides
that, where a fideicommissum was created before the commencement of the Act and two or more fideicommissary
substitutions have already occurred, the fideicommissum immediately lapses and the existing fideicommissarius
acquires unencumbered ownership of the property.
T h e Deeds Registries Act 47 of 1937: Section 14 of this Act contains certain provisions applicable to a
redistribution agreement between the heirs of a deceased estate, or between the heirs and the surviving spouse
of a testator, the executor or the administrator of the estate. The redistribution agreement is a method of
liquidation which may be used in the administration process and is briefly discussed in chapter 5.
The Deeds Registries Amendment Act 9 of 2003 provides for the registration of immovable property in the
names of persons married under the Recognition of Customary Marriages Act. See the reference to the latter Act
in the overview of Other Legislation below.
The Mineral and Petroleum Resources Development Act 28 of 2002 was promulgated on 10 October 2002. It
repealed the Minerals Act 50 of 1991 and came into operation on 1 May 2004. The stated purpose of the Act is to
make provision for equitable access to and sustainable development of the nation's mineral and petroleum
resources, on the basis that these resources belong to the nation and that the State is the custodian thereof. The
Act, which was preceded by the White Paper on a Mineral Policy for South Africa and several Bills (see the
previous service issue to this work), invests the Minister of Minerals and Energy with extensive regulatory and
administrative powers with regard to all ramifications of mineral rights. Section 3(2) of the Act provides that the
State, as the custodian of the nation's mineral and petroleum resources, acting through the Minister, may grant,
issue, refuse, control, administer and manage any reconnaissance permission, prospecting right, permission to
remove, mining right, mining permit, technical cooperation permit, reconnaissance permit, exploration right and
production right. Section 5 sets out the legal nature of these rights and the rights of the holders thereof. The Act
sets out the rules and procedures according to which application may be made for any of these rights or permits
and may have implications for deceased estates (see for instance section 56(b)). Due regard should also be had to
the Transitional Arrangements contained in Schedule II of the Act, which, inter alia, defines, categorises and deals
with certain "old order rights".
[Page 16]
It should be noted that notarial deeds in respect of ownership of mineral rights are no longer registered in the
Deeds Office and that, notwithstanding the provisions of the Act, conditions in existing title deeds of immovable
property in terms of which mineral rights are reserved are to remain in the title deed for the time being and will not
be removed if the ownership of the property changes hands. In the Circular Letter No. 11 of 2006 (as well as in
Chief Registrar's Circular No. 2 of 2011), the Chief Registrar of Deeds points out that if conditions relating to mineral
rights are to be removed at this stage, the Department of Minerals and Energy may possibly regard the new owner
of the immovable property as the holder of the mineral rights there under. The status quo will therefore be
maintained pending a further directive in this regard: see paragraph 4.3 of the Chief Registrar's Directive No. 11 of
2004. It is suggested that practitioners, including executors and administrators of deceased estates, take due
notice of the entire circular.
The Longterm Insurance Act 52 of 1998 provides for the protection of policy benefits under certain longterm
insurance policies, also with regard to a policyholder that dies (section 63(1)(b)).
Legislation governing the ownership and occupation of land
Background
In terms of section 25(5) of the Constitution, the State must take reasonable legislative and other measures, within
its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis.
When the new government took over after the 1994 elections, it soon became evident that land reform had been
identified as a major priority. When President Cyril Ramaphosa took office in 2018, he (and the ANC) started
pushing the agenda of "land redistribution without compensation" and a number of public hearings were held in this
regard. Although a discussion of this topic falls outside the scope of this work and the present maze of laws and
regulations, together with an increasing volume of reported case law seemingly poses more of a challenge to an
estate planner than to an administrator of a deceased estate, it is submitted that executors of deceased estates
should familiarise themselves with at least the following legislation and developments with regard thereto:
o Development Facilitation Act 67 of 1995 (repealed)
o Subdivision of Agricultural Land Act Repeal Act 64 of 1998
The repeal of the Subdivision of Agricultural Land Act 70 of 1970 (Government Gazette 19294 of 28 September
1998) is aimed at ensuring and facilitating effective and speedy land distribution. This Act will come into
operation on a date to be determined by the President in the Government Gazette. Pending this promulgation
date, Act 70 of 1970 remains in force and continued reference thereto elsewhere in this work should be
interpreted accordingly. Also, see the significant remarks by Alan West concerning Act 70 of 1970 in De Rebus,
January/February 2003. At the time of this update, the Subdivision of Agricultural Land Act Repeal Act has still
not been promulgated.
[Page 17]
Apart from the two Acts briefly outlined above, the following Acts should also be noted in view of the effect which
they may have on property rights with regard to land forming part of a particular deceased estate:
o Restitution of Land Rights Act 22 of 1994, as amended
Section 2 of the Act provides that land may be restored to the executor of a deceased estate. The Act also
provides that land in respect of which a land claim has been filed may not be alienated without permission.
The Act is aimed at the restitution of land rights to persons and communities dispossessed of land rights
after 19 June 1913 pursuant to racially discriminatory laws and practices, e.g. forced removals, resettlement,
etcetera. The Act also provides for the establishment of the Commission on Restitution of Land Rights and the
Land Claims Court. This matter is enjoying a lot of press and coverage at the moment and it is likely that land
redistribution without compensation will be a reality in the immediate future.
o Restitution of Land Rights Amendment Act 48 of 2003
This Act empowers the Minister of Land Affairs to purchase, acquire in any other manner or expropriate land or
a right in land for the purpose of the restoration thereof to a claimant or for any other related land reform
purpose.
o Land Reform (Labour Tenants) Act 3 of 1996
This Act contains measures to provide for the security of tenure of labour tenants occupying or using land and
their acquisition of land and rights thereto.
o Extension of Security of Tenure Act 62 of 1997
This Act provides for state assistance to facilitate security of land tenure in the long term. The Act details
certain measures for regulating matters such as the conditions of residence on certain land, the termination of
such residence and the eventual eviction of occupiers whose residence had been terminated.
o Close Corporations Act 69 of 1984
Section 35 of this Act governs the disposal of the interest of a deceased member of a close corporation.
Executors must also have regard to the provisions of section 29 of the Act, with special reference to section
29(3)(c) and 29(3)(d).
o Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998
This Act is aimed at the prevention of unlawful eviction of people lawfully occupying certain land and provides
for procedures for the eviction of unlawful occupiers. The Act also repeals the Prevention of Illegal Squatting
Act 52 of 1951.
[Page 18]
o For a useful discussion of respectively the Restitution of Land Rights Act, the Land Reform (Labour
Tenants) Act and the Extension of Security of Tenure Act, see De Rebus 1998 (Nov) 37, 1999 (March) 33
and 1999 (May) 43.
1.2 The unchaining of deceased estates from discriminating laws and procedures
1.2.1 Introduction
In previous updates of this work, various developments regarding the administration of the estates of deceased
Black persons had been canvassed. Reference was made to court decisions with regard to the constitutionality of
certain laws and practices whereby the administration of particular deceased estates was dealt with along racial
lines and according to certain rules of customary law that were falling foul of particular prohibitive provisions of the
Constitution. Attention had been drawn to certain legislative measures as spadework towards uniformity and non
discrimination in the administration of deceased estates of all South Africans. It was also pointed out that the legal
and administrative processes aimed at a uniform and nondiscriminatory system for the administration of deceased
estates appeared to be in a state of flux: Sachs J, who delivered the judgment of the Constitutional Court in
Moseneke v Master of the Supreme Court 2001 (2) SA 18 had remarked in his dictum that although the laws
differentiating between the administration of deceased estates of Black and other people is rooted in "racist
attitudes and practises of the past" and must therefore change, the learned judge warned that "such changes
should not be brought about by the single stroke of the pen".
To date, the vast majority of the discriminatory laws have been repealed and the playing fields have been
levelled amongst the various races in South Africa (in as far as it pertains to the administration of estates). South
Africa is still a vastly divided country and those divisions occur largely along racial lines. Due to the history of
Apartheid in South Africa, this is probably a division that will take a long time to be truly removed.
Apart from Moseneke's case, the authors also referred to, inter alia, the subsequent decisions in Bhe and Others v
Magistrate, Khayelitsha and Others 2004 (2) SA 544 (CC) and C Shibi v M Sithole, J Sithole and Minister for Justice and
Constitutional Development, then still unreported, which were also indicative of the evolutionary phase in which
certain laws and practises regarding the administration of the deceased estates of Black persons found itself.
The cases of Bhe and Shibi eventually came before the Constitutional Court together with a third matter initiated
by the South African Human Rights Commission and the Women's Legal Centre Trust. The judgment, which was
handed down on 15 October 2004, can be regarded as a major milestone in the concretising of constitutional values
in general and the eradication of discrimination in the South African law and practice of administration of deceased
estates in particular.
1.2.2 The judgment of the Constitutional Court
The judgment is reported in 2005 (1) SA 580. The two main issues before the Court involved the validity of section
23 of the Black Administration Act and the [Page 19] constitutional validity of the principle of primogeniture in the
context of the customary law of succession. It would not be practical to provide a detailed discussion here of the
decision in all its ramifications. The paragraphs below only briefly touch on the practical implications of certain
aspects thereof. It is nevertheless suggested that practitioners thoroughly study the entire decision, including the
dissenting judgment of Ngcobo J.
1.2.2.1 Constitutional values
Pursuant to an indepth analysis of the relevant prohibitive provisions of the Constitution with regard to
discrimination between people on grounds such as race, gender and birth, section 23 of the Black Administration Act
38 of 1927 together with the Regulations for the Administration and Distribution of the Estate of Deceased Blacks which
had been promulgated thereunder, was found to be unconstitutional and invalid. The provisions of section 14(1)( b)
of the Intestate Succession Act 81 of 1987, which exclude the intestate estates of deceased Blacks, were likewise
found to be unconstitutional and invalid [pars 6874 at 615616]. It was accordingly ruled that section 1 of the
Intestate Succession Act will henceforth apply to the intestate estates of deceased Blacks and it was held as
follows:
that subject to the following, s 1 of the Intestate Succession Act applied to the intestate deceased estates that would
formerly have been governed by s 23 of the Act. In the application of s 1(1)(c)(i) and 1(4)(f) of the Intestate Succession
Act to the estate of a deceased person who was survived by more than one spouse: (a) A child's share in relation to the
intestate estate of the deceased, had to be calculated by dividing the monetary value of the estate by a number equal to
the number of the children of the deceased who have either survived or predeceased such deceased person but are
survived by their descendants, plus the number of spouses who have survived such deceased; (b) each surviving spouse
inherited a child's share of the intestate estate or so much of the intestate estate as did not exceed in value the amount
fixed from time to time by the Minister for Justice and Constitutional Development by notice in the Gazette, whichever
was the greater; and (c) notwithstanding the provisions of subpara (b) above, where the assets in the estate were not
sufficient to provide each spouse with the amount fixed by the Minister, the estate had to be equally divided between the
surviving spouses [par 136 at 634BE].
1.2.2.2 Male primogeniture
Since the customary law principle of male primogeniture impedes the capacity of women and children born out of
wedlock to inherit property, it was also branded unconstitutional and declared invalid [pars 97CD].
1.2.2.3 Redistribution agreements
The Court was mindful of the fact that practical problems with regard to the distribution of the assets in particular
intestate estates may be encountered, for instance where the deceased is survived by more than one spouse and
a substantial number of descendants and the estate is relatively small. It was therefore reiterated that the decision
should not be interpreted to the effect that section 1 of the Intestate Succession Act in its amended form as quoted
above is cast in stone and should be rigorously applied in every circumstance. The door is accordingly left open for
interested parties to enter into redistribution agreements in terms of which a particular estate would devolve in a
different way, [Page 110] even according to customary law if so agreed. The Court, however, had regard to the
potential for prejudice implied by such agreements:
Having regard to the vulnerable position in which some of the surviving family members may find themselves, care must
be taken that such agreements are genuine and not the result of the exploitation of weaker members of the family by the
strong. In this regard, a special duty rests on the Master of the High Court, the magistrates and other officials responsible
for the administration of estates to ensure that no one is prejudiced in the discussions leading to the purported
agreements [par 130 at 632AB].
It is submitted that, in view of all the various issues upon which the Constitutional Court had been called to
adjudicate, the importance of testamentary estate planning by people living within societies and communities
affected by customary and religious rules is becoming more and more evident.
1.2.2.4 Renunciation by a descendant
The decision is silent on the application of the provisions of section 1(3) to (6) of the Intestate Succession Act. It is
submitted that a renounced benefit by a descendant of a deceased who is survived by more than one spouse,
should vest in the surviving spouse from whom that descendant had been born.
1.2.2.5 Estates already in the process of being administered
It should be noted that the relevant rulings by the Court do not affect estates that are already in the process of
being administered in terms of section 23 of the Black Administration Act and its regulations and may be finalised in
terms thereof. Any interested person may however approach the Court for appropriate relief if serious
administrative or practical problems are encountered [par 136 at 634GH].
1.3 The jurisdiction of Magistrate's Offices with regard to intestate estates
No estates are administered by the magistrates any longer as all estates are now administered by the relevant
Master of the High Court in the area where the deceased resided prior to his or her death.
Chapter 2
The Master of the High Court and the executor of a deceased estate
2.1 The Master
2.1.1 Judicial and quasijudicial functions
2.1.2 Advisory function
2.1.3 Administrative function
2.1.4 Discretionary function
2.2 The executor
2.2.1 The executor testamentary
2.2.2 The executor dative
2.2.3 The procedure for appointing an executor dative
2.2.4 Persons disqualified from appointment as executor
2.2.5 Concluding remarks on the appointment of executors
[Page 23]
2.1 The Master
T h e Master of the High Court supervises the administration of deceased estates by an executor o r h i s
representative. The Master is appointed by the Minister of Justice and Constitutional Development for the area of
jurisdiction of a provincial division of the High Court. The Master's office is situated at the seat of the provincial
division of the High Court in respect of those areas to which it has been appointed. It goes without saying that the
administrator of an estate should therefore find out which Master has jurisdiction before lodging the documents.
The Administration of Estates Act grants the Master extensive administrative and other powers required to properly
exercise his functions. He is assisted by a specialised administrative staff to whom he may delegate certain duties.
The Act also provides for the appointment of a deputy Master/s or an assistant Master/s who may perform all the
Master's duties and functions under his supervision.
As far as the administration of estates is concerned, the Master's most important functions are the issuing of
Letters of Executorship and the examination of the Liquidation and Distribution ("L&D") accounts of deceased
estates which executors or their representatives submit to him for approval. From the outset, the Master is tasked
to carefully supervise the entire administration process. As we will indicate in chapter 3, every deceased estate is to
be reported to the Master after the death of the deceased, as prescribed. The Master opens a file in the name of
the relevant estate and allocates a reference number. This file is regularly circulated in the Master's office by means
of a diary system for the duration of the administration process. This enables the Master to ensure that due
progress is being made with the administration of the estate; that the periods which are statutorily prescribed for
the executor has to take certain steps are adhered to; and that the rights of interested parties and in particular of
the heirs, mentally unsound persons and minors are duly protected. In short, the Master strictly supervises the
process to ensure that the estate is administered in accordance with the provisions of the Administration of Estates
Act, other legislation related to estates and, where applicable, common law. If problems or delays occur (which
unfortunately is frequently the case) the Master may direct a reminder to the executor or his representative and
take appropriate steps if there is no response. The Master may, for example, remove an executor from office
(sections 54(3) and 85) or disallow the executor's remuneration to which he would have been entitled for the
administration of the estate (sections 46, 51(3) and 84(2)), or he may summons the executor to appear before the
High Court to account for any dereliction of his duties as executor.
The final L&D account, together with the necessary vouchers (which are to be submitted to the Master), may not
be advertised for inspection before the Master has granted his approval (section 35). If the Master is not satisfied
with the account or requires additional documents or clarification, he refers the account, together with a written
query sheet, to the administrator. The administrator is required to correct the account according to the query sheet,
or even to redraw [Page 24] the entire account, and to reply to and provide written explanations to all the queries.
Only if the Master is satisfied in all respects, will he grant permission for the account to be advertised for inspection
and provide the executor or his representative with details of the final requirements to be complied with for the
finalisation of the administration process. These would include the proof of advertisement, submission of receipts by
heirs and legatees, submission of a final bank statement (with a nil balance), proof of transfer of fixed property (in
the form of a conveyancer's certificate) and the like.
Primarily, the Master's main function is the supervision of the actions of executors, tutors and curators. The Act
provides detailed instructions in this regard. The intention of the provisions for deceased estates is to ensure
meticulous, honest, efficient and prompt administration of estates, subject to the wishes of the testator and the law
of succession, with proper consideration of the interests and convenience of creditors and beneficiaries.
Apart from his supervisory function, the Master has other important functions, as will become evident below.
2.1.1 Judicial and quasijudicial functions
In many instances, the Master has the same powers as the High Court, although these powers do not always
correspond. For example, the Master or the court may remove an executor from office, although section 54 contains
several examples where only the court may remove an executor from office. Another example is that the purchase
of an estate asset by an executor or someone who, in view of his connections with the executor, is in a position to
have insider knowledge of the estate (such as the executor's parent, child, partner, employer, and so forth) is
invalid unless it has been consented to or is confirmed by the Master or the court. This judicial/quasijudicial function
of the Master is particularly apparent in the following cases:
(i) The acceptance and registration of wills When an estate is reported, the Master registers the deceased's
will (if there is one). He then indicates whether he accepts the will as valid for purposes of appointing an executor.
In order to do this, he assesses the will at face value, but he is also entitled to request and consider sworn
statements before reaching a final decision. According to this evidence the Master may find that a will is legally valid
but that, for example, a particular heir cannot inherit in terms of the will because he/she is disqualified due to
statutory provisions or in terms of common law. If, for example, a will submitted to the Master for registration is
handwritten, the Master would probably require evidence confirming the identity of the person responsible for
writing out the will, e.g. in order to ascertain whether such "writer" of the will is not also a beneficiary under the
same will.
Before 1992, if it appeared that a will was written by one of the heirs, or attested as a witness by him or his
spouse, that heir was incapable (either completely or partially) of receiving any benefit under that will, whether as
an heir or as an executor. The Law of Succession Amendment Act 43 of 1992 changed this position and the court
may now declare such a person capable of inheriting [Page 25] under certain circumstances. Where an attestation
may cause doubt about the capacity of the person concerned to benefit under a will, the relationship of such person
to beneficiaries must be disclosed. It is always better to have the will witnessed by two independent witnesses
who do not stand to gain any benefit from the will. Being appointed as an executor has also been ruled (by the
courts) as "benefiting under the will", due to the executor's remuneration to which such person would be entitled.
The Master assesses the will ex facie and will not pursue matters such as falsification or undue influence if the will
complies with the necessary formalities. Act 43 of 1992 provides the Master with a discretion to accept a duplicate
of an original will (or to reject same). The Master may therefore accept a duplicate of a will even if the original that
was in the testator's possession cannot be found after his death. This would normally be a duplicate originally
signed by the testator and should be differentiated from a photocopy of the will. The Master's decisions in all the
cases mentioned above are made by virtue of his judicial function and after he has interpreted and applied the
relevant legal rules and principles.
(ii) The interpretation of wills When the Master examines and considers the L&D account submitted by the
executor, this should always be done in line with the will of the deceased. The reason for this is to ensure that the
executor has interpreted the will correctly and has prepared the L&D account in accordance with the provisions of
the will and the wishes of the deceased. In other words, he must apply the rules of interpretation, legislative
provisions and take appropriate case law into account.
(iii) The sale of immovable assets from an estate It is often necessary to sell immovable property from an
estate in order to efficiently and effectively administer the estate, because the heirs so require. A practical reason
might be that the house is now too big for only the surviving spouse or because there is a cash shortfall in the
estate which the heirs are not willing or able to supplement. Usually such immovable property constitutes one of
the estate's most important (or most valuable) assets. Before such a sale may take place, the executor must comply
with the provisions of section 47 of the Administration of Estates Act, which reads as follows:
Unless it is contrary to the will of the deceased, an executor shall sell property (other than property of a class ordinarily
sold through a stockbroker or a bill of exchange or property sold in the ordinary course of any business or undertaking
carried on by the executor) in the manner and subject to the conditions which the heirs who have an interest therein
approve in writing: Provided that
(a) in the case where an absentee, a minor or a person under curatorship is heir to the property; or
(b) if the said heirs are unable to agree on the manner and conditions of the sale,
the executor shall sell the property in such manner and subject to such conditions as the Master may approve.
The Master will therefore have to be approached for his approval only in the exceptional cases mentioned in section
47. Another example of where the most workable option is likely to be the sale of the immovable property out of the
estate could be where a specific immovable asset, such as a house, is left to five [Page 26] beneficiaries.
Registering it in the names of all five beneficiaries would not be practical and a possible solution in such a case
would be to sell the property and divide the proceeds amongst the five beneficiaries.
(iv) Objections to accounts Subsequent to the Master's approval of the L&D account, the executor is to
advertise it in the Government Gazette and a local newspaper distributed in the area in which the deceased
ordinarily resided for the 12 months before his/her death. After it has been advertised, it should lie open for
inspection for a period not less than 21 days at the Magistrate's Court with jurisdiction over the area in which the
deceased resided prior to his/her death. The rationale behind the advertisement of the estate account, as well as
the period for objections, is to afford individuals who need to object to the distribution (as set out in the account)
the opportunity to object. In order not to delay the finalisation of the estate for an undue period, a limit of 21 days
is given in the Act. After the expiry of this 21 day period, the magistrate issues a certificate stating that no
objections have been received and that the estate may be distributed in terms of the L&D. Any interested party is
entitled to examine the account during the period of inspection and lodge an objection to any aspect in the account.
Such objection must be submitted to the Master, who will make a decision after considering it. The Master may
direct that the account be amended, even if no objection is lodged. This decision is similarly subject to revision by
the court on the insistence of the objector or other interested party. In instances where the deceased resided in
the city where the Master's Office is situated, it is not necessary to furnish the magistrate with the L&D account, as
inspection can easily take place at the Master's Office.
2.1.2 Advisory function
It is also part of the Master's functions to act in an advisory capacity. The administration of deceased estates is a
specialised subject and complex situations often arise. The Master is expected to give guidance on these matters.
In the course of their duties, the Master and his staff acquire firsthand knowledge of every possible aspect of
administration and legal prescriptions pertaining to estates. Legal practitioners, trust companies and other
professional administrators of estates frequently consult with the Master about complex problems and his advice is
sought to resolve such problems. The Master is bound to the legal provisions and there are cases that fall outside
his discretion, and these are then referred to the High Court for a ruling. The party seeking advice and the Master
may not always reach consensus about the solution of a specific problem and a point may be reached where no
progress is made. In such cases, the court's assistance should be sought. Furthermore, the Master may be
reluctant to give instructions as it may place him in an awkward position if an objection arises at a later stage.
In deciding on matters concerning deceased estates, the courts often seek the Master's advice. Such
applications must be submitted to the Master beforehand. The Master then reports to the court in writing. The
report is considered together with the application. In terms of rule 6 of the High Court Rules, the [Page 27]
prescribed motion procedure must be used in such cases. In his report, the Master may bring up any matter which
he feels should be brought to the court's attention. The Master on occasion even mentions in his report whether or
not he is sympathetic towards the application. Although the court is not in any way bound to the Master's report
and recommendations, it carries considerable weight in the court proceedings and experience has taught that the
courts seldom grant applications which the Master opposes, although it has happened on occasion.
Finally, the Master is also accessible to the public in an advisory capacity. Anyone requiring advice or information
about estate matters may approach the Master's office for assistance. The Master's staff will attend to addressing
the estate related practical queries received from the public. This is particularly the case with practical matters. The
Master and his staff are not normally prepared to give legal advice.
2.1.3 Administrative function
The Master has certain administrative powers which enable him to make final decisions in given cases so that the
court cannot interfere at a later stage. A good example of this function is the application of section 38 o f t h e
Administration of Estates Act, which deals with a surviving spouse taking over an estate or a portion of an estate
under certain circumstances.
2.1.4 Discretionary function
In terms of the Administration of Estates Act, wide discretionary powers have been granted to the Master to enable
him to exercise a measure of flexibility in the administration process in order to resolve potential difficulties. For
example, these discretionary powers enable him to eliminate some steps in certain cases to shorten and expedite
the administration process. Where the value of an estate does not exceed R250 000, the Master may in his
discretion order that the appointment of an executor be dispensed with and authorise a special shortened
procedure for the administration of the estate (section 18(3)(b) of the Act). In terms of this discretionary capacity
the Master may, for example, also exempt an executor from the obligation of opening a bank account in the name of
the estate as prescribed by section 28 of the Act, e.g. if there is no cash found in the estate. He may also reduce or
increase the executor's prescribed remuneration. The Master's administrative and discretionary powers are closely
connected and still have to be exercised judicially in accordance with general legal principles. It is important to note
that the Master cannot in any way be compelled to exercise his discretion.
2.2 The executor
Whenever a person, who owned any assets (with commercial, rather than just sentimental value) dies within the
borders of the Republic of South Africa, an [Page 28] executor is appointed to attend to the winding up of the
estate. No one can deal with estate assets until the executor has been appointed. The word "executor" is defined
in section 1 of the Administration of Estates Act as "any person who is authorised to act under Letters of Executorship
granted or signed by the Master, or under an endorsement made under section 15".
In terms of the same section, "Letters of Executorship" includes "any document issued or a copy of any such
document duly certified by any competent public authority in any State by which any person named or designated therein
is authorised to act as the personal representative of any deceased person or as executor of the estate of any deceased
person".
In many respects, the executor is the principal person in the entire process of winding up a deceased estate. In
practice, he performs the duties required in order to finalise the estate under the direction of the Master of the High
Court. Firstly, it is the executor who has to interpret and analyse the will, sort out the estate, look after the
interests of the heirs (and even act as peacemaker when unpleasant disputes arise among them), ensure that
liabilities and debts are paid, keep a close watch on the assets, advise and support grieving nextofkin, and so
forth. The executor is responsible for ensuring that an accurate and complete L&D account is submitted to the
Master in time. He is also exposed to strict sanction from the Master of the High Court if he fails in this regard. In
fact, the duties and powers of an executor are of such magnitude and importance that they form the subject of a
separate investigation, and in this section we will restrict ourselves to his appointment and some of the most
important aspects pertaining to his appointment.
2.2.1 The executor testamentary
In by far the majority of cases, a person who leaves a valid will after his death nominates an executor, granting him
power of assumption, which is the authority to nominate coexecutor/s to assist him in his task. The person
nominated as executor in a will does not automatically become the executor as a result of the nomination he must
be formally appointed to this office by the Master before he may act in his capacity as executor. An executor is
appointed when the Master issues the Letters of Executorship. This establishes the official appointment as executor
of the person nominated in the will and the Letters of Executorship is normally required by all institutions with
whom the executor comes into contact regarding the administration of the estate.
An executor testamentary receives the Letters of Executorship only once certain requirements have been met:
(i) the death must be reported to the Master (see chapter 3);
(ii) the will must be submitted to the Master for registration and accepted by him;
(iii) the person nominated as executor in terms of the will must apply in writing for Letters of Executorship and
submit an acceptance of trust as executor in duplicate on the prescribed form J190. The reason for the
duplicate document is that one copy is submitted to the offices of the South African [Page 29] Revenue
Services (SARS), which offices then (independently) enter into correspondence with the executor;
(iv) the applicant must, to the satisfaction of the Master, provide security for the proper performance of his
functions. Security is provided on a special form prescribed by the Master, which is available on the website of
the Department of Justice and Constitutional Development (www.justice.gov.za/master/deceased.html). In
the form provision is made for someone to bind himself as surety to the Master for the proper performance of
the executor's functions. The person thus binding himself may be one or more private persons of acceptable
status and financial means (although the Master is extremely loath to accept such surety), or a company,
including an insurance company. Most insurance companies are on the Master's list of approved institutions
from whom he would accept such a policy. Most wills contain a provision that the person nominated as
executor is exempted from providing security to the Master, in which case this requirement will normally fall
away. Where the executor is insolvent or resides in a foreign country, or where the Master so requires, the
Master may in his discretion insist on security. In such instances, the estate is to be reported to a Master's
office within the Republic of South Africa, but as there is risk that the estate may be reported to more than
one Master's office, an affidavit needs to accompany the reporting documents confirming that the estate has
not been reported to any other Master's office/s. Section 23 of the Administration of Estates Act further
provides that if a person is a parent, child or surviving spouse of the deceased he/she does not have to
provide security. All other executors have to provide security, unless the will contains a provision that no
security is required from the executor. Even if the will contains such a provision, the Master can still insist on
security being provided by the executor if he feels that it is necessary.
The Master may, however, by exercising his discretion or on the grounds of an objection lodged in writing by an
interested party, declare the nomination of an executor in a will invalid and refuse to issue Letters of Executorship
before:
(i) the court has ruled on the validity of the nomination;
(ii) the objection has been withdrawn; or
(iii) the objector has been granted 14 days, calculated from the date of the Master's refusal to issue Letters of
Executorship, to apply to the court for an injunction prohibiting the issue of Letters of Executorship.
If the Master, through exercising his discretion, regards the nomination as invalid, the onus will rest on the person
so nominated or a person with an interest in the estate to apply to the court for a ruling on the matter.
It is important to note here that, apart from a case where only the nomination as executor is invalid, such
nomination may also be invalid because the will as such is invalid. For example, the testator may not have had the
capacity to draw up a will and in such case the Master is entitled to refuse to take any steps before the validity of
the will has been confirmed by the court. A clear distinction must be drawn between these two cases because in
the first example only the nomination is invalid, a matter which can be rectified merely by nominating an [Page 210]
executor dative. In the second example, the will in its entirety and consequently also the nomination of the
executor are invalid, and if the court finds this to be the case, the estate will devolve intestate.
If an interested party lodges an objection against the appointment of the nominee under the will, the Master is
not obliged to refuse to issue the Letters of Executorship to the nominee. He has discretionary powers in this
regard, but if he issues the Letters of Executorship in spite of the objection, the aggrieved interested party may, in
terms of section 95 of the Administration of Estates Act, apply by motion to the court for an order to set aside the
appointment made by the Master. In this case, both the Master and the executor appointed by him must be cited as
respondents and if the validity of the will as such is in dispute, all the persons with an interest in the validity of the
will must be joined in the application.
Where the objection to the appointment of the executor is based on the alleged invalidity of the will, only those
with an interest in succession under the will are qualified to lodge an objection. By law creditors or debtors of the
estate may not lodge an objection. However, there may be other grounds on which a creditor may lodge an
objection against the appointment of an executor, for example he may claim that the nominee is not a suitable
person to hold office as executor. An aggrieved creditor qualifies because as a creditor he has a real interest in the
administration of the estate.
In the following specific cases the Master may refuse to issue Letters of Executorship:
(i) if the prospective executor resides or is outside the Republic and has not chosen a postal address inside the
Republic;
(ii) if any person could, if he were appointed as an executor, be removed from his office under section 54(1)(a)(ii)

or (iv), or section 54(1)(b)(iii) of the Administration of Estates Act;
(iii) if the prospective executor is someone who has been forbidden by law to administer or distribute the estate
of a deceased (section 13(2) of the Administration of Estates Act);
(iv) if a prospective executor cannot or will not convince the Master by a declaration under oath that Letters of
Executorship have not been issued by the Master of another division of the High Court.
2.2.2 The executor dative
An executor dative is appointed in the following cases:
(i) when a person either dies intestate, or leaves a valid will but fails to nominate an executor;
(ii) if the person nominated as executor under a will cannot be traced or has died or is disqualified from accepting
the office of executor (see below), or refuses to accept the office of executor, or if the nominated executor
fails to lodge an application to the Master for Letters of Executorship after the Master has notified him to do
so;
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(iii) where two or more persons have been nominated and one of them cannot be traced, or dies, or refuses to
accept the office, or is disqualified from being appointed as executor, or fails to apply as mentioned in the
paragraph above. If it appears that the appointment of another executor/s to join the remaining nominee
would be in the interests of the estate, and any of the abovementioned problems arise in respect of one of
the conominees, the vacancy is filled by an executor dative;
(iv) if the executors of an estate are at any time less in number than the prescribed quorum as stipulated in the
will;
(v) if the only appointed executor, or all the executors, ceases to be executor for any reason (for example if an
executor is removed from office due to failure to perform his duties);
(vi) if two or more persons are executors and one or more of them ceases to be executor for any reason, and it is
in the interests of the estate that one or more executor/s should be joined with the remaining executor.
2.2.3 The procedure for appointing an executor dative
At present, the procedure for the appointment of an executor dative in terms of section 18(1) is for the most part
the same as for the appointment of an executor testamentary. It is no longer necessary for the interested parties
to nominate an executor at a meeting, unless the Master considers it necessary or expedient to convene such a
meeting. In the process of administering an estate, the administrator will determine soon enough whether there is
any conflict among the heirs. If no conflict is apparent, the person elected by the interested parties should be
requested to sign an acceptance of executorship. It would also be prudent for the beneficiaries to sign a nomination
form in terms of which the elected executor is nominated. The Master would subsequently appoint him. If the
administrator is aware of discord among the interested parties, the Master should be requested to convene a
meeting for the appointment of an executor. This would prevent an accusation that some heirs are being treated
with partiality. The appointment of a beneficiary exempted from having to provide security saves the estate and the
interested parties both time and money.
The issue of furnishing security by an executor, whether he is an executor testamentary or an executor dative
may be summarised as follows: A parent, child or surviving spouse is not required to provide security unless the
Master instructs that it should be done. Other persons may be exempted in a will from the obligation to provide
security subject to the Master's capacity to insist on security. Where a person has no knowledge of the business of
estate administration, or is not assisted by a person with such knowledge, the Master would normally insist on
security (an attorney is conclusively presumed to have knowledge of the administration of estates and normally no
security is required from attorneys).
If the original executor is removed from his office before finalisation of an estate, and assets remain which have
yet to be dealt with, the Master may appoint a person whom he considers suitable and qualified for the office of
executor to [Page 212] deal with such remaining assets and to complete the administration of the estate. The
practical procedure is that a person with a financial or other interest in an estate, usually informs the Master of the
need for a new appointment, at the same time recommending someone for such appointment. The Master may
subsequently appoint such a person or he may consult with the other interested parties to gage their opinion. If
the person who has been removed from office is still willing and capable of acting as executor, the Master may
reappoint him, although he is not obliged to do so .
In terms of the Mental Health Care Act, 2002, a curator who manages the affairs of a person, he would continue
with the administration of the estate as executor if the person dies intestate or if the executor testamentary is
unwilling or incapable of accepting the appointment .
Where the value of an estate does not exceed R250 000, the Master will normally dispense with the
appointment of an executor and give special instructions as to the administration of the estate. In practice, an
interested person, supported by the written permission of the heirs (or the majority of the heirs) would lodge an
application with the Master to finalise the estate as a "summary administrator". This application form is called an
"acceptance of Master's directive" and differs considerably from an acceptance of trust as executor.
The Master would then issue an authorisation and specifies how the estate is to be finalised without using the
normal administration procedure set out in the Act. This kind of administration takes place in terms of the provisions
of section 18(3) of the Act. Note that the provisions of regulation R910 do not apply in estates administered in
terms of section 18(3) of the Act. Where there are only a few heirs with full legal capacity, the Master would
normally authorise them to take possession of and retain the estate on receipt of an undertaking signed by the
heirs to pay the debts up to the value of the assets in the estate. This section also applies where an executor is
appointed under a will and is willing and qualified to accept the appointment. The Letter of Authority (issued in such
cases in lieu of the Letters of Executorship) needs to contain details of all the assets in the estate. In the case of
bank accounts, the amounts need to be stated in order for the Master to assess whether the value of the estate is
not greater than R250 000. A practical problem that many heirs (and administrators of such estates) encounter is
that without a Letter of Authority, the banks (and most other institutions) are normally not prepared to provide
them with any information regarding the accounts and they are therefore not able to obtain balances on the
accounts held in the name of the deceased in order to confirm that the total value of the estate is below the
threshold amount of R250 000.
Due to the constant review and revising of the procedures to be followed with regard to estates administered in
terms of section 18(3), it is essential to take cognisance of and to remain up to date with any changes in the
applicable procedures.
In most cases where a lay executor is appointed in terms of the will of the deceased, the Master requests that
such lay person (e.g. a family member or friend) be assisted by someone who is proficient in the administration of
estates such as an attorney or an auditor. This information is then also contained in the [Page 213] documentation
supplied to the Master to report the estate. It is, however, not the attorney or auditor that is held accountable if
the L&D account is submitted late, it is the executor (and not his agent). The agent will, however, receive a copy of
the Master's notice informing him of the lateness of the L&D account.
2.2.4 Persons disqualified from appointment as executor
In general, Letters of Executorship may be issued to any person, although there are certain persons who are either
absolutely or relatively disqualified from acting as executor and therefore cannot be appointed executor in terms of
Letters of Executorship.
(i) Minors In terms of section 14(1)(b) of the Administration of Estates Act a person nominated as executor
under a will cannot be appointed as such if he is not qualified to be an executor. Although the Act does not
specifically link the concept "disqualified" to the limited independent contractual capacity of a minor, the court has
on occasion ruled that a minor, as a result of this restriction, does not possess capacity to be placed in a fiduciary
position such as executorship. A minor's parent or guardian takes his place in the order of preference when he is
nominated as executor dative. Where a minor is nominated as executor in a will, the Master usually appoints
someone else but grants the minor the right to be appointed when he attains majority. A concession is made that,
even though the Master has not granted such a right, the minor is entitled ipso facto to be appointed at attainment
of majority, in which case he acts as coexecutor together with the executor already appointed. Please note that
the age of majority was lowered from 21 years to 18 years (during 2007). If care has not been taken with the
drafting of the will, the Master must appoint an 18 year old person as executor maybe not the result desired by
the testator.
(ii) Mentally unsound persons and people under curatorship A mentally unsound person and a person under
curatorship due to reasons of diminished capacity are disqualified from acting as executor in a deceased estate. If a
person who is mentally affected or a prodigal under curatorship is nominated as executor dative, however, the
Master may appoint the curator in such person's place.
(iii) Insolvents An unrehabilitated insolvent is not absolutely disqualified from being appointed as executor, but
if he is nominated as executor testamentary, the Master may refuse to issue Letters of Executorship for his
appointment before he has furnished sufficient security for the proper administration of the estate. In the case of
an executor dative, the Master has discretion to appoint anyone he considers suitable. If an insolvent person is
nominated thus, the Master in his discretion may appoint him or he may simply refuse to do so.
Since executors dative are normally subject to providing security to the satisfaction of the Master, there is
actually no risk involved if such person is in fact appointed. As mentioned earlier, the parent, child or surviving
spouse of the deceased provides security only if the Master insists upon it under his discretionary powers.
[Page 214]
(iv) Companies Letters of Executorship are issued to individuals only. Where a company, for example a
commercial bank or a trust company, is nominated as executor under a will, Letters of Executorship are not issued
in the name of the company but in the name of an officer of the company, that is, a person the company has
decided to nominate in a representative capacity. This is always the case in instances where the banks or insurance
companies are appointed in the will of the testator. The company, however, accepts responsibility for the actions of
an executor appointed in this manner. Should the nominated official die during his executorship, or resign from, or is
dismissed from the company, the existing Letters of Executorship is simply endorsed in favour of his successor.
(v) The Master The Master cannot be appointed as executor of an estate in his official capacity and his
nomination to this effect is invalid.
(vi) Partnerships In cases where a professional services firm is nominated as executor under a will, all the
partners of the firm at the time of the testator's death are appointed as coexecutors. Although this appears to be
the correct procedure, the Master has on occasion appointed only one of the partners. However, this depends on
the phrasing of the will. An incorporated firm of attorneys will normally be regarded as qualified to be appointed as
executor in terms of the provisions of section 23(9) of the Attorneys Act 53 of 1979, as amended .
(vii) Persons outside the Republic of South Africa Letters of executorship may be issued to persons residing
outside the Republic but the Master may refuse to issue letters before such persons have provided security and
chosen a valid address within the Republic. This condition is also applicable to persons who reside in the Republic
but find themselves outside the Republic at the time of their application for executorship. In such instances, the
Master will normally require them to indicate to him how the logistical problems potentially associated with such a
situation, will be addressed before the Letters of Executorship is issued .
(viii) Persons attesting to the execution of a will, or to the writing or signing of the execution of a will In
terms of sections 5 and 6 of the Wills Act 7 of 1953 a person who attested the execution of any will or who signed a
will in the presence and by direction of the testator or the person who was the spouse of such person at the time
of attestation or signing of the will or any person claiming under such person or his spouse was incapable of taking
any benefit whatsoever under the will .
Act 43 of 1992 repealed sections 5 and 6 and introduced a new section, namely section 4A, in its place. In terms
of this section a witness to a will, a person who signs the will by instruction of the testator, or who writes the will or
any part of it in his own handwriting, and who was such person's spouse at the time of the execution of the will, is
not entitled to receive any benefit from that will (section 4A(1)).
[Page 215]
Firstly, in terms of section 4A(2), the court may, however, declare such person or his spouse qualified to benefit
from the will if the court is convinced that such person or his spouse did not defraud or unduly influence the testator
in the execution of the will.
Secondly, a person or his spouse is not disqualified from receiving a benefit from the will if he would have
inherited intestate from the testator had the testator died intestate.
Thirdly, a witness or his spouse is not disqualified from inheriting under the will if the will concerned was signed
by at least two other qualified persons who do not receive any benefit in terms of the will.
The nomination in a will of a person as executor, trustee or guardian is regarded as a benefit received by such
person in terms of the will (section 4A(3)).
As far as the writer of the will is concerned, it must be noted that only a person who writes the will in his own
handwriting is disqualified from inheriting. In other words, a person who types out another person's will on a
computer is still qualified to inherit in terms of that will. This is actually illogical, since very few wills are written by
hand today and it is after all just as easy to commit fraud when typing a will as it is when writing it out.
In Thomas and Another v Clover NO and Others 2002 (3) SA 85 (N) it was held that a person "incapacitated from
being an executor" as contemplated in section 14(1)(b) of the Administration of Estates Act includes a person
precluded by common law from receiving a benefit under a will and should therefore not be issued with Letters of
Executorship.
(ix) Persons disqualified from appointment as executors in terms of section 13(2) of the Administration of
Estates Act and regulation R910 of 22 May 1968, as amended No Letters of Executorship are to be issued to a
person who is prohibited by any law from being appointed as executor.
2.2.5 Concluding remarks on the appointment of executors
When Letters of Executorship are issued to a person, that person is authorised to administer all the assets of the
estate which are situate in the Republic. The Act, however, does not limit the executor's authority to assets situated
within the Republic. He will, however, not be allowed to deal with assets in a foreign country, however, before his
appointment has been acknowledged in that country where the assets are situate, just as foreign executors must
be formally acknowledged by the authorities in South Africa before they can deal with assets in South Africa.
Until Letters of Executorship have been issued, the estate is unrepresented and it cannot act, e.g. open bank
accounts or institute or defend legal action, even when the testator has nominated an executor in his will.
The person appointed as executor of an estate is often a lay person as far as the administration of a deceased
estate is concerned. Usually the executor in turn appoints a professional person, such as an attorney, to wind up
the estate on his behalf. The agent subsequently receives power of attorney from the [Page 216] executor to
administer the estate on his behalf. Such an agent would be wise to negotiate his remuneration with the executor
at his appointment. It is normal procedure for an agent to undertake the administration at payment to him of the
full executor's remuneration. A rumour has been circulating for quite some time now that the Master refuses to
appoint lay executors. This is devoid of all truth. The Master is prepared to appoint a lay person as executor, but is
mindful that such a lay person will not be able to properly administer the estate and needs to be assisted by a
knowledgeable person such as an attorney, a trust company or an auditor/accountant. This knowledgeable person
will then be provided with a power of attorney in terms of which he/she will administer the estate on the executor's
behalf. Many executors have been disappointed with agents who, after completion of the estate, demanded more
than the executor considered fair. This should be avoided by discussing and agreeing on a fair remuneration for the
agent at the outset. A relationship of trust between the executor, the agent and the heirs is an essential
prerequisite for good estate administration. The appointment of a professional administrator of estates or other
specialist by an executor does not absolve the executor of his responsibilities in terms of the Act. He remains
personally responsible for the proper and timely finalisation of the estate. If an agent fails to comply with the
prescribed periods for submitting the final account to the Master, the executor and not the agent will be called
before the court to account for the delay, even though the agent accepted responsibility for winding up the entire
estate.
The executor is the only person entitled to sell estate property in the liquidation of the estate and only the
executor may distribute the proceeds of such a sale between the heirs and creditors. A sale in contravention of
section 30 of the Act is invalid and may constitute a criminal offence in terms of section 102(1)(h) of the Act (De Faria
v Sheriff, High Court, Witbank 2005 (3) SA 372 (T)).
Finally, it should be borne in mind that the executor holds appointment and performs his duties in terms of the
Administration of Estates Act. He is, therefore, an office bearer and not a universal successor of the deceased or a
representative of the latter's heirs and creditors. In Van den Bergh v Coetzee 2001 (4) SA 93 (T) the deceased's
executor sold property of the deceased out of the estate subject to a voetstoots clause. It subsequently appeared
that the deceased had been aware of irreparable latent defects in the property and the purchaser sought to cancel
the deed of sale entered into between himself and the executor. The question before the court was whether the
knowledge of the deceased could be imputed by operation of law to the executor for purposes of rendering the
voetstoots clause ineffective. The executor was not aware of the defects and the court found, with respect correctly,
that the executor and the deceased are separate and distinct personae (see also Meyerowitz Estates (2004) at
12.20). In the result, the acts of the deceased cannot legally be laid before the executor's door and the purchaser's
claim against the former for cancellation of the deed of sale, restitution of the purchase price and damages was
dismissed.
Chapter 3
Reporting the estate
3.1 Submission of the death notice
3.2 Submission of the will
3.3 Submission of the inventory
3.4 Acceptance of executorship
3.5 Finalising the preliminary work
[Page 33]
The administrator of an estate may be nominated as executor in terms of a will, or the nominated executor in the
will may request a skilled person to administer the estate on his behalf, or a person may die intestate and the heirs
may request the assistance of an administrator of estates.
On the death of a person leaving an estate (whether he/she left a will or not), certain preliminary formalities
regarding the estate must be completed before the administration as such can proceed. In practice, these steps are
known as "the preliminary work" and entail reporting the estate to the Master; submitting the will, if there is one, to
him and filing a preliminary inventory of the deceased's assets. Each of these steps are briefly discussed below.
Annexure A1 to this work contains a duty sheet of tasks the administrator must perform in order to finalise an
estate satisfactorily.
3.1 Submission of the death notice
In terms of section 7 of the Administration of Estates Act, the death is reported by completing and submitting to the
Master a death notice in a form prescribed by the regulations promulgated in terms of section 103 of the Act. This
death notice must be submitted whenever any person dies within or outside the Republic leaving any property or a
will in the Republic.
Whenever a person dies within the Republic, the surviving spouse is obliged to report the death. If there is no
surviving spouse, this becomes the obligation of the deceased's nearest relative or connection residing in the
district in which the death has taken place. In the absence of any of the aforementioned persons, the death must
be reported by the person who was in control of the premises at which the death occurred.
Where the death took place outside the Republic, the person in the Republic having control of the deceased's will
or any assets is responsible for reporting the death.
All deaths to be reported to the Master in terms of the Act, must be reported within 14 days after the death of
the deceased. In many instances, the Master is quite strict that the estate should be reported within the prescribed
14day period and in many estates that are reported late, the Master now requires an affidavit setting out the
reasons for the delay in reporting the estate.
Section 7(3) of the Act grants the Master the right to address a written notice to any person who may, in his
opinion, be able to furnish the following information within a given period:
(i) if no death notice has been submitted, a death notice in the prescribed form within a period specified in the
Master's aforesaid notice;
(ii) any other information the Master may require as set forth in his aforesaid notice.
[Page 34]
Section 7(4) of the Act provides that if the person signing any death notice was not present at the death, or did not
identify the body after the death, that person must furnish the Master with proof of the death. The Master must be
convinced that there is sufficient prima facie proof of the death before registering the estate in his office. The Master
requires a death certificate or a duly certified copy thereof as part of the reporting documentation.
The death notice furnishes the personal history of the deceased. This information must be accurate and
complete, since the contents will be referred to frequently during the administration process. For this reason it is
essential for the administrator to keep a copy in his file.
3.2 Submission of the will
Section 8 of the Act places an obligation on any person in possession of a document that is a will or purports to be
a will to submit such document to the Master immediately when he becomes aware of the death of the testator. The
will should be sent per registered post or delivered in person and an acknowledgement of receipt requested.
Should an original will go missing, it causes many problems and calls for a lot of explanations. On receipt of the will,
the Master registers it in the register of estates which he keeps in his office in accordance with section 8(3).
In terms of section 8(4) of the Act the Master may, notwithstanding the fact that he registered a will in terms of
section 8(3), refuse to accept the will for purposes of the Act if in his opinion it appears to be invalid. The court will
then have to determine the validity of the will. To avoid problems with the identification of witnesses at a later
stage, it is good practice to enter the initials and surnames of the witnesses, as well as their ID numbers on the will
during execution thereof. If one or more witnesses have the same surname as that of the testator, it is good
practice when reporting the will to mention whether they are related to the deceased or have been indicated as
beneficiaries in the will. Distant relatives, who are not named as beneficiaries in the will, can sign as witnesses. It is
only when the witness also stands to benefit from the will, that this might raise a query. When an estate is
reported, much time can be saved by always stating who was responsible for a handwritten will or a portion of a
handwritten will. We should always bear in mind that the decision as to whether a will is valid or not, vests with the
Master and not with the person reporting the estate. Therefore, even though the will might look valid (or invalid) it
should always be submitted to the Master. The Master then decides whether the will is valid or not. After the Master
has ruled on the validity (on face value) of the will, his decision (or ruling) can be challenged in Court.
If the Master is convinced that a testator, whose will has been handed to him in accordance with the above
mentioned provisions, has not left any assets within the Republic, he may make the will available to any person
who may legally require it for the administration of assets situate outside the Republic.
[Page 35]
A dispute may arise over the issue of whether the will, which was registered by the Master in terms of section
8(3), is in fact the last will of the deceased. The Master may, in terms of section 8(4), again refuse to accept the will
before the dispute has been resolved by the court.
It should be noted that nobody may conceal or destroy a document that is a will or purports to be a will, even if it
may appear to him that the will is invalid due to noncompliance with certain formalities. Section 102(1)(a) stipulates
that someone who steals, or wilfully destroys, conceals, embezzles or damages any document purporting to be a
will, is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding seven
years, or to both such fine and imprisonment. It is advisable to send any will (as well as any document intended to
be a will) to the Master. Should the will be found to be invalid, the Master will appoint an executor dative.
3.3 Submission of the inventory
Section 9 of the Administration of Estates Act stipulates that an inventory in the form prescribed in the Regulations
to the Act must be submitted to the Master within 14 days of the deceased's death. The inventory must contain
details of all property, which, to the best knowledge of the person preparing the inventory, belonged:
(i) to the deceased; or
(ii) where the deceased was married in community of property, to the joint estate of the deceased and the
surviving spouse; or
(iii) in the case of the death of one of two or more persons who have massed their estates or part thereof in
terms of section 37 of the Act, to such massed estate.
The person responsible for preparing and submitting this inventory to the Master is:
(i) the surviving spouse, or in the absence of such person;
(ii) the deceased's nearest relative or connection residing in the district in which the deceased was ordinarily
resident at the time of his death.
The inventory must be prepared in the presence of the persons who, as heirs, have an interest in the estate and
who may be present as such. In practice often, only one of the interested parties are present.
As in the case of the death notice, the Master may in terms of section 9(2)(b) of the Act and by written notice
require any person to prepare the aforesaid inventory and to submit it to him within a specified period. This includes
a person who, at the time of or immediately after the death of the other person, had control of the premises where
the death occurred or of any premises where the deceased was living or carrying on any business.
[Page 36]
Note that the inventory does not make provision for reporting any liabilities. Great care is required when
preparing the inventory (see Annexure A3). Some tips may be appropriate here:
o Do not wait for valuations of assets before reporting the estate. Use tentative valuations as these are
perfectly acceptable. Please note that these values need to be amended for purposes of the Liquidation and
Distribution account if the estate is, e.g. subject to estate duty and accurate values are required.
o Do not individually list or itemise assets that can fall under a group, for example, enter chairs, cupboards,
refrigerators, etc. under the heading "furniture", with one value for all the items of furniture. One of the main
reasons for this is that, if assets are stipulated in the inventory and it later pans out that those assets are no
longer owned by the deceased (or were never owned by him), the Master might require an explanation of
what has happened to the assets (which were included in the inventory, but are now left out of the
Liquidation and Distribution account).
o Enter insurance policies even if you are not sure whether or not they form part of the estate. If it appears at a
later stage that they are not estate assets, you can inform the Master accordingly. If the value of the estate
without the policies is less than R250 000, however, it may be advisable first to find out what the situation is.
This may prevent the Master from appointing an executor where he could have dispensed with such a step.
After such an appointment, the administration method for section 18(3) will no longer be permissible.
o Assets that may or may not have been the property of the deceased may initially be left out. There will be an
opportunity later to include them if necessary.
o In order to obtain the correct description of immovable property, a simple Deeds Office search can be
performed. Many systems, such as Windeed, are available which enable the executor to perform the search
from the comfort of his own office. Should the executor or agent not be able to do this before submission of
the inventory, he should definitely do it before submission of the Liquidation and Distribution account. In
cases where the street address rather than the correct Deeds Office description is still used in the Liquidation
and Distribution account, the conveyancer attending to the transfer will have to issue a conveyancer's
certificate, which certificate accompanies the transfer documentation (to the Office of the Registrar of Deeds)
to prove that e.g. Erf 235 Ermelo is in fact the same property as 73 Church Street, Ermelo.
o Indicate balances of cheque and savings accounts as they occur in the cheque or savings accounts. Balances
up to and including the date of death can be obtained later for inclusion in the Liquidation and Distribution
account.
Remember that the primary purpose of the inventory is to establish whether or not the value of the estate exceeds
R250 000. If there is no doubt that the estate exceeds R250 000, preliminary values are in order.
[Page 37]
3.4 Acceptance of executorship
A testator usually nominates an executor in his will. Although the will often provides for the appointment of a
particular person as executor, it is in fact the Master who appoints the executor. To indicate his willingness to be
appointed as executor, the person signs an acceptance of trust as executor (see Annexure A4). This form must be
completed and submitted to the Master in duplicate. The Master subsequently sends one copy to SARS, which
enables SARS to set the ball rolling at an early stage to establish whether he has a claim for outstanding income tax
against the estate or whether refunds must be made to the estate. For this reason, it is important to include the
income tax reference number in the acceptance of executorship. Although not required, it can do no harm to enter
the name of the SARS office as well. This may prevent the form from arriving at the wrong SARS office leading to
delays.
3.5 Finalising the preliminary work
The submission to the Master of the death notice, the will where applicable, and the preliminary inventory comprises
the most important part of the preliminary work in an estate. In practice it is usually the person nominated in the
will as executor (or his agent) who reports the death and sends the necessary documents to the Master, together
with his acceptance of executorship on the prescribed form. The nominated executor usually consults with his
attorney or agent directly after the death, hands the will to him and furnishes the necessary details to enable the
attorney or his agent to complete the death notice, inventory and acceptance of executorship. The prospective
executor subsequently signs only those documents requiring his own signature and the attorney or agent sends all
the documents to the Master and takes receipt of the Letters of Executorship on behalf of his client, after which he
continues with the administration in collaboration with the executor.
Similarly, where an executor dative has to be appointed, the surviving spouse or one of the heirs or a nextofkin
consults the attorney or agent directly, furnishes the necessary details and the attorney or his agent does the rest.
If a nextofkin is prepared to be the executor, he signs the acceptance of executorship form and after submission
of the documents to the Master, receives his appointment as executor.
On the form for acceptance of trust as executor, the executor provides the Master with the name and address of
his agent who is to administer the estate on his behalf and he usually chooses the address of his representative's
office as his process address. The reason why the Master requires the details of the agent (who will be
administering the estate on behalf of a layexecutor) is that the Master has learnt (through experience) that lay
executors need assistance in the winding up of a deceased estate. The Master consequently knows that he should
correspond directly with the agent concerning the estate. Obviously the [Page 38] executor still remains
responsible for the proper finalisation of the estate in terms of the Act.
While the executor or beneficiary is at the attorney's office for the completion of the documents required for
reporting the estate, it is a suitable occasion to also complete a questionnaire. This questionnaire is not a
requirement laid down by the legislator but does enable the attorney to finalise the estate without frequently
having to refer to the executor for information. An example of such a questionnaire appears in Annexure A5. Note
that, since most of the information is supplied in other documents, it is not necessary to waste your client's time by
completing it in his presence complete only those parts where information is lacking and do the rest later. You may
adjust the example given to provide for the special circumstances of a particular estate.
During the completion of the documents it is advisable that you provide the executor or beneficiary a
memorandum setting out the procedure for the administration of the estate. (Annexure A6 contains an example of
such a memorandum.) Regular progress reports to interested parties will help to establish confidence in your
efficiency as an estate administrator. Lengthy periods of silence will do your image no good and cause the
beneficiaries to wonder how the administration process is progressing. Please bear in mind that you should not
commit to report too frequently. In the case of deceased estates, monthly progress reports (or even a report once
every two months) are adequate. The personal contact an attorney maintains with the interested parties is an
important tool which he should use in order to foster and build the personal relationship with the next of kin. As a
result of a policy of centralisation (followed e.g. by some banks and trust companies), many organisations that
administer estates have lost this important tool. For example, the estates of deceased persons who resided in
BeaufortWest are reported to, and administered under the jurisdiction of the Master's Office in Cape Town. The
result is that heirs in remote areas are not in a position to make personal contact with the administrator unless
they undertake a long trip for this purpose.
It is also the correct time during a conversation with the heirs and the surviving spouse (in most cases the wife)
to set their minds at rest about the much dreaded "freezing" of the estate. Most people have an idea at the back of
their minds that they may be at the mercy of others to survive until the estate has been finalised. Inform them that
noone is allowed to deal with estate assets before an executor has been appointed, but that money, if available,
may be paid out soon afterwards. Tell them that it is not necessary to approach financial institutions for advances
or loans (at high interest rates). Inform them that, once you have obtained Letters of Executorship, you will open
an account in the name of the estate and pay out as much as the surviving spouse requires (if she is an heir), on
the understanding that you will retain sufficient funds for the administration of the estate. When you receive further
amounts, such as insurance policies paid out, you can make further payments. In situations where the surviving
spouse was not made a beneficiary in terms of the will, his/her claim against the deceased estate should be dealt
with in terms of the provisions of the Maintenance of Surviving Spouses Act. These situations necessitate the
intervention of the High Court.
[Page 39]
Once the Letters of Executorship (see Annexure A7) have been issued, the preliminary work will be completed.
The executor may then begin with the formal administration of the estate.
In conclusion, a summary is given of the various documents which must be sent to the Master in order to obtain
Letters of Executorship under the different circumstances. Never ever send the documents to the Master in "dribs
and drabs". Until the Master has all the necessary documents in his possession, he is unable to issue the Letters of
Executorship. Make sure that you report the estate with all the relevant documents. Otherwise you may cause
serious delays due to the fact that the file opened by the Master is not always readily available at the Master's
office at a later stage. You will also add to the already heavy workload at the Master's office, because he will not be
able to issue the Letters of Executorship immediately but has to refer to the same file more than once for purposes
of issuing the Letters of Executorship.
(i) Executor nominated in will and exempted from providing security
(a) Death notice
(b) A certified copy of the death certificate
(c) Will
(d) Acceptance of executorship (in duplicate)
(e) Inventory
(f) Affidavit declaring that no customary union was entered into by the deceased
(g) Affidavit that the estate has not been reported to any other Master's office
(h) Certified copy of the executor and the executor's agent's identity documents
(i) Certified copy of the deceased's identity document
(ii) Executor nominated in will but not exempted from providing security or where two or more executors are
nominated and one dies or fails to apply for appointment
(a) Death notice
(c) Will
(d) Acceptance of executorship (in duplicate)
(e) Inventory
(f) Completed bond of security
(g) Death certificate of deceased executor or reference number of his estate
(h) Repudiation of one of the nominees, if applicable
(i) Affidavit declaring that no customary union was entered into by the deceased
[Page 310]
(j) Affidavit that the estate has not been reported to any other Master's office
(k) Certified copy of the executor and the executor's agent's identity document
(l) Certified copy of the deceased's identity document
(iii) No will or no capable executor testamentary nominated and value of estate exceeds R250 000
(a) Death notice
(c) Will, if any. If the deceased died intestate, a "NextofKin" affidavit must be lodged with the Master (see
Annexure A16). Furthermore, in instances where the deceased left a valid will, but stated that his/her
children are to inherit (without providing the names of the children), a "NextofKin" affidavit is also
required in order to report the estate and avoid delays at a later stage
(d) If the executor nominated under the will is deceased or refuses to accept nomination, a death certificate
of the deceased nominated executor or the reference number of his estate or a written refusal of
nomination as executor
(e) Inventory
(f) Nominations by heirs
(g) Completed bond of security unless nominee is a parent, spouse or child of the deceased
(h) Acceptance of executorship (in duplicate)
(i) Affidavit declaring that no customary union was entered into by the deceased
(j) Affidavit that the estate has not been reported to any other Master's office
(k) Certified copy of the executor's identity document
(l) Certified copy of the deceased's identity document
(iv) Value of estate worth less than R250 000
(a) Death notice
(c) Will, if any
(d) Inventory
(e) If all the heirs have legal capacity, an undertaking by them to discharge the debts up to the amount of
the value of the estate assets
(f) If certain heirs do not have legal capacity or if there are legatees or a large number of heirs, an
"Undertaking and Acceptance of Master's Direction"
[Page 311]
(g) Affidavit declaring that no customary union was entered into by the deceased
(h) Affidavit that the estate has not been reported to any other Master's office
(i) Certified copy of the appointee's identity document (also that of the agent, where applicable)
(j) Certified copy of the deceased's identity document.
Please note that, as a practical consideration, all the documents required for the reporting of an estate
should be submitted to the relevant Master's office at the same time. Experience has taught us that,
should the documents be submitted in a piecemeal manner, it causes the issuing of the Letter of
Executorship to be delayed. If the deceased was a married person, a certified copy of the marriage
certificate must also be included in the documentation referred to in (i) to (iv) above.
When it is alleged that the person was a spouse of the deceased in terms of a customary marriage as
contemplated in the Recognition of Customary Marriages Act 120 of 1998, proof of such marriage must be lodged
with the Master by means of a registration certificate as contemplated in section 4 of the Act. Recently, many
Master's offices have started requiring this affidavit confirming that the deceased was not a party to a customary
marriage as a standard requirement when an estate is reported.
Chapter 4
Executor's duties after receiving Letters of Executorship
(i) Notice to the deceased's creditors and debtors (section 29)
(ii) Submission of final inventory (section 27)
(iii) Opening of banking account in the name of the estate (section 28)
(iv) Determination of solvency of estate (section 34)
(v) Determination of value of estate assets
(vi) Determination of estate liabilities
(vii) Selecting a suitable method of liquidation
(viii) Payment of estate liabilities by executor (section 35)
(ix) Preparation and submission of liquidation and distribution account by
executor (section 35)
(x) Master's permission for executor to advertise estate account for inspection
(xi) Final requirements
[Page 43]
As explained in the previous chapter, the executor only effectively receives authority to commence with the
administration process after completion of the preliminary work and receipt of the Letters of Executorship from the
Master.
There are two very important requirements in the administration which the administrator must bear in mind at all
times:
o speed
o accuracy.
Section 35 of the Administration of Estates Act requires that the Liquidation and Distribution account be submitted
within a period of six months from the date of the Letters of Executorship, unless the Master has granted an
extension. It is always advisable to submit the account before the due date, if possible. If certain steps are
followed, this is quite achievable. Since there are certain fixed periods, for example for advertising, it will be difficult
to settle an estate in less than four months. In fact, this would be an excellent achievement and considerably
enhance your status as a trusted administrator of estates.
First, a few tips on the administration process:
(i) Open several subfiles (or folders) for the estate, which you can keep in the main file. File all vouchers relating
to estate assets in one subfile. Use a second subfile for documents relating to liabilities, and a third for the
Letters of Executorship, the executor's power of attorney and all bank deposit slips (or proof of payments into
and out of the estate bank account), as well as the cheque book (if any) received after opening the bank
account. In many instances internet banking is used in order to make payments and cheques are no longer
issued to pay administration costs and creditors. In such instances, the proof of internet transfers should be
retained. File all sundry documents in a fourth subfile. If there are no such documents, fewer subfiles will
suffice. As you obtain valuations of assets, simply file them in subfile A. You will appreciate the value of
keeping subfiles when you start preparing the account. Instead of a thick file full of random documents,
everything will be where it belongs. The task of drawing up the account will be much simpler and faster. The
electronic documents can obviously be stored in different subfiles on your computer. Please ensure that
proper backups are made. You will, however, require the originals at some stage during the administration
process in most instances.
(ii) At this stage, obtain a power of attorney from the executor in which he authorises you to do everything he
would have done pertaining to the administration of the estate. Obviously there are certain documents which
only the executor himself may sign. An example of this is the estate duty return. You may sign other
documents, particularly cheques, on his behalf, which will save considerable time and trouble. Annexure A8
contains an example of such a power of attorney.
The correct sequence in the administration of an estate is set out below. Where applicable, the relevant section of
the Administration of Estates is given as well.
[Page 44]
(i) Notice to the deceased's creditors and debtors (section 29) As soon as possible after receipt of his Letters
of Executorship, the executor must place a notice in the Government Gazette and in a local newspaper circulating in
the district in which the deceased ordinarily resided at the time of his death. If, for example, the deceased was
living with his children in Pietermaritzburg at the time of his demise (e.g. due to ill health), but he ordinarily resided
in Pretoria, the executor would place the notice in a newspaper which is circulated in Pretoria and not one circulated
in Pietermaritzburg.
In the notice all persons with claims against the estate are called upon to lodge such claims with the executor
within a period of not less than 30 days or more than three months from the date of the latest publication of the
notice. If the deceased resided in any other district at any time within the period of 12 months before his death, the
notice must also be published in a newspaper circulating in such district. If the deceased was not ordinarily resident
in the Republic within the aforesaid period of 12 months, the notice must be placed in a newspaper in the district or
districts where the deceased owned property. Although not prescribed by the Act, it is customary to call upon
debtors of the estate to pay their debt to the estate through the executor. Annexure A9 contains an example of
such a notice.
In the case of a joint estate, the date of birth of the surviving spouse and his/her identity number must also be
furnished.
Claims of creditors against a deceased estate are usually for monies lent, goods sold or services rendered to the
deceased before his death. Although such claims are in most instances of a contractual nature and for a fixed
amount, (very common is, of course doctors' and hospital bills not settled by the medical aid), delictual claims, e.g.
for damages, may also be filed against a deceased estate, provided that such claims are liquidated. In other words,
the amount of the claim must be determined and fixed either by way of an agreement (settlement) between the
claimant and the executor or by a court judgment. The underlying provisions are section 29(2) of the Administration
of Estates Act, providing that all claims which would be capable of proof in case of the insolvency of the estate may
be lodged in terms of section 29(1) of the Act, read with section 44(1) of the Insolvency Act which provides that any
person or his representative who has a liquidated claim (italics supplied) against an insolvent estate which arose
before sequestration, may prove a claim at any time before the final distribution of the estate.
Section 31 governs the position where a creditor fails to submit his claim within the period specified in the notice
in terms of section 29. For a discussion of this aspect, see chapter 8.3 below.
Section 32 governs the position where the executor disputes a creditor's claim. This section provides that the
executor may, by notice in writing, require the claimant to lodge, in support of his claim, within a period specified in
the notice, an affidavit setting forth such details of the claim as the executor may indicate in the notice. Further, the
executor may, with the consent of the Master, require the claimant or any other person who may in the opinion of
the Master be able to give material information in connection with the claim, to appear [Page 45] before the Master
at a place and time stated in the notice, to be examined under oath in connection with the claim. The creditor or
person so directed to appear and give evidence under oath concerning the claim may be questioned about the claim
by the executor, an heir or their legal representatives as well as the presiding Master. If the creditor fails to comply
with the notice to appear or refuses to take the oath or to give satisfactory answers to lawful questions put to him,
the executor may reject his claim. This will then lead to the Liquidation and Distribution account being finalised
without the inclusion of such claim.
(ii) Submission of final inventory (section 27) An executor ordered by the Master (or who in terms of section
23 was required to furnish security), must within 30 days after Letters of Executorship have been issued to him, or
within such further period or periods as the Master may allow, lodge with the Master an inventory showing the
estimated value of all property in the estate. This provision means that the socalled section 27 inventory must be
submitted only in the exceptional cases mentioned above. This inventory must be signed by the executor
personally, even if he has appointed an agent to administer the estate on his behalf. Section 27(1)( a) provides that
the inventory must be in the prescribed form.
If the executor has made an estimate of the value of any property which the Master has reason to believe is not
a reasonably accurate estimate of the value of the property, the Master may, at the expense of the estate, order
that property to be appraised by an appraiser or any other person approved by the Master. The reason for granting
these powers to the Master is that the extent of the security which the executor must provide is determined by the
Master on the basis of the total value of the estate as indicated in the inventory. If the executor undervalues the
property, the security which he must provide may not be sufficient. Should the deceased have been the registered
owner of any firearms, the license does not automatically transfer to his/her heirs. Such heirs will have to apply for
a license in their own name. As firearms are quite contentious (amongst other things due to the high crime rate in
SA), an expert should be consulted as to how this is best dealt with.
If you administer an estate where a section 27 inventory is required, you should not delay the submission of the
inventory because you do not possess the actual values of property or assets. Estimated values are perfectly
acceptable for purposes of this inventory.
(iii) Opening of banking account in the name of the estate (section 28) As soon as an executor has in hand
moneys in the estate in excess of R1 000 he must open a cheque account in the name of the estate with a bank in
the Republic and deposit such moneys and such other moneys as he may receive from time to time into the estate
banking account. Further, the executor may open a savings account in the name of the estate with a banking
institution and may transfer into it all surpluses not immediately required for the payment of claims against the
estate.
The Act states that the executor must open a cheque account in the name of the estate if he/she has more than
R1 000 at hand. This normally pertains to cash [Page 46] only that cannot be electronically transferred from the
estate account to the bank account of a beneficiary directly. It is, however, possible to transfer the money in the
deceased's account(s) electronically to the account of the beneficiary. In this way high banking charges could be
eliminated or largely reduced. It could also cut down on the administration significantly. In certain instances it may
not even be necessary to open a bank account at all (bearing in mind the statutory requirement that the executor
must have R1 000 or more at hand.) This is not consistently applied by all examiners in the Master's Office, but that
does not mean that an executor should not endeavour to apply it in applicable estates. However, if no estate bank
account is opened, the beneficiaries would have to pay the expenses incurred in the administration of the estate,
such as the costs of the advertisements, creditors, monies payable to valuators (if applicable), advertisement costs,
executor's fees and the like.
In terms of section 28(2) every executor must, whenever required by the Master to do so, notify the Master in
writing of the bank and the office or branch thereof with which he has opened an account. Note that the Act no
longer stipulates that the Master must be informed of the opening of a banking account.
Moneys on fixed deposits held in the name of the deceased (e.g. at a bank or financial institution) at the time of
his death might as well remain there unless it is required in order to pay the administration costs or settle the debts
of the estate. It will earn interest in the meantime, which will benefit the heirs. You do not need the Master's
permission to leave existing investments intact. The administrator is not obliged to realise such investments.
Note that the administrator may open an interest bearing account in the name of the estate at a bank or
another financial institution. He may then transfer any moneys not required immediately for the payment of claims
against the estate into the account. There are often large amounts of money in an estate as a result of life
assurance policies being paid out. This money can earn interest during the administration process. It is not
necessary to obtain the Master's permission before opening such an account. However, savings accounts tend to
render negligible interest. It is wiser to transfer surplus funds to a call account or to a moneymarket account, which
renders a much more favourable interest rate. If the funds are required, the bank can be instructed to transfer
these back into the estate banking account after the minimum period of the money market or call account has
lapsed. Money invested in the money market can easily be transferred electronically into the estate banking
account. When you decide to transfer money, consult your banker regarding the best shortterm interest rates, but
be mindful that the estate does not end up having to pay penalties should the moneys be required on shorter
notice than originally anticipated.
As stated earlier, it is not good practice to call up interestbearing investments in order to deposit such moneys
in a cheque account, unless the money is required to discharge debts. Rather allow investments to accumulate
interest and call them up as late as possible so that the largest possible benefits are obtained for the beneficiaries.
(iv) Determination of solvency of estate (section 34) Once the period stipulated in the notice in the
Government Gazette and local newspaper in which [Page 47] creditors are called upon to lodge their claims against
the estate to the executor has lapsed, the executor must satisfy himself as to the solvency of the estate. If he finds
that the estate is insolvent, he must comply with the provisions of section 34. An estate that is insolvent, i.e. the
value of the assets is less than the value of the liabilities can still be administered as a normal estate, provided that
the creditors reduce the value of their claims to the value available in the estate. Please ensure that an estate with
a cash shortfall is not mistaken for an insolvent estate. An estate is only insolvent if the value of all the assets in
the estate is not sufficient to cover the liabilities in the estate. A cash shortfall (i.e. not sufficient cash resources to
pay the administration costs and cover the debts) should be differentiated from an insolvent estate. In the latter
case, the value of all the assets in the estate is less than the liabilities .
(v) Determination of value of estate assets This function can be partially completed even before receipt of
Letters of Executorship. A deeds search could be conducted (using any of the systems available to conveyancers,
e.g. Windeed) to establish the latest description of any immovable property registered in the name of the deceased
in order to facilitate any later immovable property transactions .
If the administrator is convinced that the estate is not liable for estate duty, he can obtain certain valuations, for
example in respect of:
(a) immovable property: municipal valuation or local authority valuation;
(b) motor car or any other vehicles: valuation by a motor vehicle dealer;
(c) furniture, effects, and so forth: valuation by two impartial outsiders (see annexure A10 for an example).
Under certain circumstances you will make use of the services of an appraiser, for example where the immovable
property is not rateable. In that case municipal or other valuations will not be available.
Do not wait for receipt of Letters of Executorship or the expiry of the advertising period before undertaking these
tasks. This will ensure the fastest possible administration of the estate and there will be no unnecessary delays.
If the estate is dutiable, the Master will insist on the best possible proof of value, which in all the above
mentioned cases will require sworn appraisements. It must be noted that a Land Bank valuation can no longer be
used for valuations of farming operations. The concession has been abolished by an amended section 1(2) of the
Estate Duty Act. In such cases, it is preferable to obtain a sworn appraisal in respect of the value of the property.
Where the deceased had conducted farming operations by means of an unlisted company (that is a company not
listed on any stock exchange) and the immovable property upon which such farming operations were conducted is
owned by the company, section 5(1A) of the Estate Duty Act provides that the value of such immovable property
shall be determined in the manner prescribed in the definition of "fair market value" in section 1. It is submitted that
this provision would also apply mutatis mutandis to immovable property belonging to a close corporation.
[Page 48]
Do not wait until you have received Letters of Executorship before attempting to obtain certificates for the
deceased's investments. Write to the financial institutions concerned and request them to send you certificates of
the balances as at the date of death (see Annexure A11 for an example). The certificates must also reflect the total
amount of interest accumulated up to the date of death. In exceptional cases, financial institutions may be reluctant
to reveal information about balances without submission of your Letters of Executorship. Note that the Post Office
insists on a certified copy of Letters of Executorship in respect of savings in a Post Bank account. Please note that
they might be reluctant to furnish you with these documents in the absence of Letters of Executorship. Upon receipt
of the Letters of Executorship from the Master's Office, the executor (or agent) needs to scrutinise the document in
order the verify that there are no typing errors (e.g. pertaining to the names, ID number and date of death of the
deceased), as it has been experienced that some financial institutions refuse to make any payments to the estate if
the Letters of Executorship is not a hundred per cent correct, e.g. if it contains a minor typing error on the full
names or the ID of the deceased, it is likely to cause problems at the banks in that they may refuse to accept it and
they can require the executor to approach the Master for a new Letters of Executorship .
(vi) Determination of estate liabilities The executor or beneficiaries usually hand all the necessary documents to
the administrator. At times it may not be clear whether certain persons or concerns have claims against the estate.
For that reason you should draft a standard letter (after reporting the estate), and send copies to all the known
creditors, requesting them to lodge a specified claim against the estate. It is usually not difficult to get a response.
State very clearly that the amount due must be as at the date of death. Amounts owing after that date do not
represent a claim against the estate, for example a medical practitioner's account for services rendered to the
grieving widow after the funeral. Annexure A12 is an example of such a letter.
By the time you receive your Letters of Executorship, you should have most of the creditors' claims in your
possession. Bear in mind also that speed is of the utmost importance in the winding up of an estate.
(vii) Selecting a suitable method of liquidation The executor has to decide on a suitable method for liquidating
the estate so that he can draw up the first and final Liquidation and Distribution account see chapter 5.
(viii) Payment of estate liabilities by executor (section 35) See the discussion in paragraph 8.4.
(ix) Preparation and submission of liquidation and distribution account by executor (section 35) The

executor must draw up an accurate and detailed account, supported by vouchers, which reflects the administration
of the estate. The account must be submitted to the Master within the prescribed period. Methods for preparing the
account are dealt with in detail later in this work. Of importance here is that section 35 has been amended to the
effect that the executor no longer has to submit vouchers to the Master, which relieves the Master of extra paper
work. However, the section states that he may request vouchers if he deems it necessary. All vouchers should
therefore be kept in your file in case they are required.
[Page 49]
As indicated above, section 35(1) of the Administration of Estates Act, requires the executor to submit his
Liquidation and Distribution account to the Master within six months after Letters of Executorship have been issued
to him. The Master has the authority to grant an extension of this prescribed period on application by the executor.
Such application for extension must be submitted to the Master in writing and meet the requirements set out in
regulation 6. The Master may in his discretion grant or refuse such application and the court is usually reluctant to
interfere with the Master's discretion in such cases. See Annexure A33 for an example of an application to the
Master for extension of the prescribed period.
If the executor fails to submit the account within the prescribed period, or within the extended period which the
Master granted him after an application, the Master has the authority in terms of section 36 of the Act to give the
executor written notice of one month in which he is ordered to lodge the account. If the executor still fails to comply,
the Master may apply to the High Court for an order directing him to account for his noncompliance. The costs of
such proceedings before the High Court must be paid by the executor de bonis propriis and he may also forfeit his
executor's remuneration or part thereof. The Master may also remove him from office. You should, therefore, make
every effort to comply with statutory deadlines. This will also assist you in building a good reputation with the
Master in your capacity as an administrator of estates.
(x) Master's permission for executor to advertise estate account for inspection Once the account has been
submitted to and examined by the Master, and the executor has provided satisfactory replies to his preliminary
query sheet, the Master will give the executor permission to advertise the account for inspection (see Annexure A14
for an example). This advertisement appears simultaneously in the Government Gazette and in one or more local
newspaper circulating in the district where the deceased was ordinarily resident at the time of his death. If at any
time within the period of 12 months immediately preceding the date of his death he was also resident in any other
district, the advertisement must also appear in one or more newspapers circulating in that other district. Many of
the newspapers are prepared to place the advertisement in the Government Gazette as well as in their newspaper.
The invoice would then indicate the separate charges applicable to the two advertisements. This is important, as
the Liquidation and Distribution account needs to reflect the two advertisements (and the costs associated with it)
separately.
Under section 35(7) of the Administration of Estates Act any interested party is entitled at any time before the
expiry of the period stated in the advertisement to inspect the estate account and, if he has any objection, to lodge
such objection in duplicate with the Master for consideration. On receipt of an objection, the Master in turn sends a
copy of the objection by registered post to the executor to inform him of the objection. The executor must, within 14
days after receipt by him of the copy of the objection, transmit two copies of his comments thereon to the Master.
The Master may, in his discretion, make any decision regarding the objection. If the Master finds that the objection
is justified, he may instruct the executor to amend the account accordingly or he may give such other [Page 410]
instruction in connection therewith as he may deem necessary. The Master will only give a decision on issues
pertaining to an interpretation of the relevant facts. In all matters where issues pertaining to interpretation of a
legal principle are in dispute, he will instruct the objector to proceed with a court action.
Any person who feels aggrieved by such direction of the Master may apply by motion to the High Court within 30
days after the date of such direction.
(xi) Final requirements In his letter giving the executor permission to advertise the fact that the account is open
to inspection, the Master also informs him of any further requirements with which he has to comply. If the
administrator has done his work properly, there should not be too many of these requirements. Depending on the
assets in the estate and other circumstances which may differ from case to case, these requirements may be:
(a) Proof of advertisement This is provided by the newspaper in which the advertisement is placed. File the
receipt and send it to the Master at a later stage with the other vouchers. An example of the advertisement is
given in Annexure A24.
(b) Proof of payment of Master's fees The Master sends an assessment of Master's fees together with his
permission to advertise. This payment must be made to SARS. These payments are no longer made at SARS
offices, but rather at any one of the commercial banks who accept payments into SARS's account. The receipt
so received from the bank, is to be submitted to the Master as proof that Master's fees have been paid. File
this receipt also for transmission to the Master, together with other vouchers. The Master's fees was a fixed
fee of R600 for many years, but in the National Budget Speech delivered in February 2018, the Master's fees
were amended. It is now calculated on a sliding scale depending on the value of the estate.
(c) Payment of creditors' claims and the heirs' and legatees' inheritances If creditors' claims have not yet
been paid, the executor must do so now. The various inheritances to which the heirs and legatees are
entitled must be distributed at this stage. Each heir or legatee must provide the executor with a receipt for
the amount received, which the executor must submit to the Master.
In terms of section 35(13) the executor must, not later than two months after the estate has become
distributable, pay to the Master for deposit in the Guardian's Fund on behalf of the persons entitled thereto,
all moneys which he has for any reason been unable to distribute in accordance with the account. If the
account has since been advertised and problems arise with payment, the Master will not be legally in a
position to grant an extension. Rather hold the advertisement back and inform the Master of your problems if
you are unable to pay out immediately.
Delays in settling the estate are frequently experienced because the heirs and legatees do not furnish the
executor with receipts. A cancelled cheque is often not for the same amount as the inheritance and therefore
cannot be used as a receipt. Because of this problem, section 35(12) has been amended so that the Master
may, instead of a receipt, accept an affidavit by the executor stating that all creditors have been paid and that
all the heirs have received their inheritance.
[Page 411]
Note that if the executor is the only heir (for example in the case of the surviving spouse) she is not required
to issue a receipt. Where an agent has signed the account, the Master may insist on a receipt.
(d) Proof of transfer of shares The Master need only be informed that the estate has been divested of all
shares. As mentioned earlier, it is better not to realise any investments unless this is necessary for the
payment of, for example, debts or estate duty. Investments can still earn interest until called up and therefore
it is unwise to terminate them at an early stage.
The Master's permission is no longer required for the transfer of shares. The share certificates, a certified copy
of the Letters of Executorship and a shares transfer form are sent to the particular transfer secretary with a
request to transfer the shares to the name of the beneficiary. If the deceased owned several shares in
various companies, the assistance of a stockbroker may be enlisted. In this way lengthy correspondence with
various companies can be avoided. Stockbrokers are eminently suitable for helping in this respect. Currently
an electronic system is used for the transfer of shares in listed companies (from deceased estates or
otherwise). Under STRATE, no share certificates will in future be issued in respect of such shares. The
ownership and transfer of shares is now electronically recorded. If the deceased held shares in private
companies, the auditors of those companies must be requested to transfer the shares. When the new share
certificates are received, the executor informs the Master that the estate has been divested of all shares.
Many of the large insurance companies make use of a company called Computer Share Services for the
transfer of their shares.
(e) Proof of transfer of immovable property Immovable property is transferred by means of registration in the
deeds office. A distinction must be drawn here between the transfer of fixed property to an heir and a
transfer to a purchaser, as the procedure to be followed by the executor (as well as the conveyancer) differs.
The substitution of section 42(1) of the Administration of Estates Act by section 12 of Act 86 of 1983 h a s
resulted in the Master not attaching a formal endorsement in terms of section 42(1) in its original form on the
power of attorney to pass transfer to an heir. The conveyancer lodges a certificate with the transfer
documents, stating that the intended transfer is in accordance with the Liquidation and Distribution account
and that the account has lain open for inspection free of objections. This is done to comply with section 35(12)
of the Administration of Estates Act. Where fixed property is transferred from an estate (or was sold by the
deceased prior to his/her demise, but transfer has not taken place as at the date of his death), the certificate
may, in terms of section 42(2) of the Administration of Estates Act, be granted by the Master at any stage
after the executor has been appointed (even before the estate account has been submitted). See Annexures
A25 to A30 for examples of documents applicable to transfers of fixed property from a deceased estate.
After registration in the deeds office a conveyancer certificate is sent to the Master as proof of transfer of the
property to the name of the beneficiary.
[Page 412]
(f) Final bank statement At this stage, the estate banking account must be closed and the final bank
statement with a nil balance submitted to the Master.
Further final requirements may be:
o Proof that no limited interests have been created in the predeceased spouse's estate (an example of this
would be a usufruct or a fideicommissum being created in the estate of the first dying spouse)
o Submission of a supplementary inventory
o Submission of minors' birth certificates
o Depositing of minors' inheritances into the guardian's fund.
When the Master has been furnished with all the necessary documents and he is satisfied that the estate has been
dealt with as it should, he issues a discharge certificate, sometimes also referred to as a "filing slip". It should be
noted that the filing slip does not constitute a discharge of the executor. If the executor requires a formal discharge
by the Master, stating that he is no longer the executor of the estate concerned, he must formally apply to the
Master (and submit a whole host of documentation). The Master will then comply with the request, subject to the
return of the original Letters of Executorship to his office. This can be done once the executor has finalised the
administration of the estate as well as in all instances where there is a dispute between the executor and the heirs
and they no longer require his services, even though the winding up of the estate is yet to be finalised. A new
executor then needs to be appointed. The Master must also comply with the provisions of section 17 of the Estate
Duty Act before the executor is formally discharged. The certificate notifies the executor that the Master's Office has
no further requirements regarding the estate. The administration of the estate has now been finalised. Practically, it
is often better for the executor not to request to be formally discharged so that, should an asset (previously not
dealt with) require to be transferred, the executor can still deal with such an asset. As soon as he has been
formally discharged, he is no longer the executor and a new executor (or the same executor) will have to be
appointed in order for the newly discovered asset to be disposed of.
Chapter 5
Methods of liquidation
5.1 Awarding and handing over assets in specie
5.2 Partial sale
5.3 Total sale
5.4 Taking over by surviving spouse in terms of section 38 of the Administration
of Estates Act
5.5 Redistribution agreement among the heirs
5.6 Administration of insolvent deceased estates
[Page 53]
Once the executor has received the Letters of Executorship from the Master of the High Court, he must take certain
steps to continue the administration process which began with the preliminary work. These steps were mentioned
in the previous chapter. An executor who has approached the administration process diligently and conscientiously
will now find himself in the position of having at his disposal all the information required to form an overall
impression of the estate. Armed with his Letters of Executorship, he can tackle his primary task, namely the drawing
up of the final Liquidation and Distribution account (which leads to the payment of creditors and distribution of the
assets amongst the heirs and legatees). This is after all what he was appointed for in the first place, and what's
more, there is the prospect of the executor's remuneration to look forward to! Although the rules for the
administration of estates obviously apply to all estates, and all Liquidation and Distribution accounts must be
prepared according to a specific statutory pattern (see chapter 10), there is more to it than meets the eye. If the
administrator is not alert, many unnecessary stumbling blocks are likely to arise.
An executor who plunges into preparing the Liquidation and Distribution account the moment he is in a position
to do so, is almost certain to encounter problems. A sensible executor, on the other hand, will gather all the
information about the estate and then plan a method of liquidation for the particular estate in consultation with
the heirs before drawing up his first and final Liquidation and Distribution account according to the plan.
It is rather difficult to define precisely what is meant by a method of liquidation. Broadly speaking, one could say
that it is the way in which the estate is prepared so that it can be handed over to the beneficiaries in the form of
acceptable, sensible and practical inheritances. In Hiddingh v De Villiers and Denyssen (1887) 5 SC 298 the judge
stated "liquidating the estate... is achieved when it is reduced into possession, cleared of debts and other
immediate outstandings and so left free for enjoyment by the heirs".
According to Bouwer APJ Die Beredderingsproses van Bestorwe Boedels 2e uitgawe Pretoria JP van der Walt (1978)
98 the following are the most important factors to be considered by an executor when planning a suitable method
of liquidation for a particular estate entrusted to him:
(i) the estate liabilities and how they can be discharged;
(ii) the assets and how they can be dealt with;
(iii) the status and identity of the heirs;
(iv) the stipulations of the will, if applicable (for example, does the will contain specific provisions or limitations
that bind the executor?);
(v) the best and most practicable method for the estate in hand without placing an undue burden on the heirs.
As stated above, the executor should always select a method in consultation with the heirs. Broome JP warns
executors against an autocratic approach: "A wise executor would no doubt always consult the beneficiaries"
(Cradock's Estate v Cradock 1951 (3) SA 51 (N)).
[Page 54]
Bouwer (supra) 98 sets out six methods of liquidation which may be applied either separately or in combination,
having regard to the situation in each particular estate:
o Award of assets in specie
o Partial sale of assets
o Total sale of assets
o Takingover of assets by a surviving spouse in terms of section 38 of the Administration of Estates Act
o Redistribution of assets in terms of an agreement between the beneficiaries
o Administration of insolvent deceased estates (section 34 of the Act).
A brief overview of the various methods of liquidation is given below.
5.1 Awarding and handing over assets in specie
This method of liquidation can be applied only if:
(i) sufficient cash is available in an estate to pay all estate liabilities and cash legacies so that the assets may be
transferred to the heirs intact; or
(ii) there is a cash deficit but the beneficiaries are prepared to pay in the deficit to avoid the sale of assets.
Not only is this method of liquidation the most elementary one, but it is also preferable because it is in the best
interests of the heirs. Obviously, the interests of the heirs cannot be prejudiced when a farm or motor vehicle is
obtained in specie from the estate, whereas prejudice is possible when an asset is realised and the heir receives
cash instead: prices fluctuate, the best offer may not be obtained, the market value at the time of realisation may
be lower than the potential or intrinsic value, and so forth. It is therefore recommended that this method of
liquidation be applied whenever possible. Our courts also prefer this method for the reasons given above.
Situations may arise, however, where this method of liquidation simply cannot be applied, for example if there is
no cash in hand in the estate with which to pay claims against the estate. In that case, the executor will inevitably
have to realise estate assets to pay in the cash deficit. Nevertheless, realisation of assets can be avoided if the
heirs are prepared to pay cash into the estate or to make arrangements with creditors and accept personal
responsibility for the estate liabilities. This emphasises what has been said above: A sensible executor will not
blindly realise assets in the estate to cover a cash deficit before he has consulted with the heirs an heir may
actually prefer receiving an asset in specie and therefore be prepared to deposit cash into the estate in order to
prevent realisation of that particular asset.
A testator may instruct a total sale of estate assets in his will and direct that the proceeds be distributed among
his heirs. The executor would be bound to carry out such an instruction (Ex parte Estate Boulton 1958 (4) SA 439
(C)).
[Page 55]
A very important consideration that may make an executor decide against an award in specie is that this method
of liquidation may be very impractical in many cases. It usually makes no sense to award heavyduty earthmoving
equipment in specie to a young female secondyear fine arts student, or a set of golf clubs to an elderly lady
confined to a wheelchair who resides in an old age home. Even in such cases, however, some heirs may have
specific reasons, known only to them, for preferring an award in specie. The elderly lady may attach sentimental
value to the golf clubs and the university student may, apart from her obvious artistic predisposition, have a latent
business sense which has prompted her to negotiate a profitable deal with a construction company in anticipation
of her machinery in specie!
There are situations where an award in specie is out of the question, for example in the two cases below:
(i) Where an asset (or assets) is of such a nature that an award in specie is legally impossible Assume A
bequeaths his entire estate to his nephew B. The estate contains a set of exclusive hunting rifles. However, B has
been declared permanently unfit to possess a firearm as a result of a serious offence involving a firearm.
Consequently, he will be unable to obtain a licence for the rifles inherited from A's estate and will never be able to
possess firearms lawfully. A's executor will be compelled to find another method of liquidation as far as the firearms
are concerned (see for example "Partial sale" below). In terms of the new legislation governing the possession and
ownership of firearms, it is highly unlikely that an executor will be able to transfer any firearms to beneficiaries
without going through a myriad of regulatory steps. Amongst these steps would be that the heir would have to
prove to the officials that he is competent to handle a firearm and he would have to obtain a certificate of
competence from a registered trainer before his application for a firearm would be processed. There are also now
stringent requirements restricting a person from possessing more than one firearm for personal protection. It
would, however, be possible to possess a recreational weapon (e.g. hunting rifle) and a hand held weapon (for
personal protection). Before the South African Police Service issues a firearm license, the applicant has to undergo a
proficiency test in order to prove to them that he/she can use a firearm. Many instructors advertise relevant classes
in the use of firearms (on the internet and elsewhere) Please note that the SAPS is likely to turn down applications
if they don't have proof of the applicant's proficiency in using the firearm for which a license is sought. It goes
without saying that the license that was held by the deceased, is not automatically transferred to the heir and, in
such cases, it is best to consult an expert in the field for guidance as to how the firearms should be dealt with.
(ii) Where the beneficiary who is to receive an asset in specie does not have legal capacity or is subject to
some limitation or another It was mentioned above that one of the factors an executor has to bear in mind when
planning a method of liquidation is the status and identity of an heir. An heir may be a minor or a mentally unsound
person and therefore not able to exercise effective control over his affairs. For example, the statutes of a company
may state that no minor may be a shareholder of the company, in which case it would be impossible to award or
transfer such shares which a minor inherited in specie. A [Page 56] minor or mentally unsound person, on the other
hand, usually has a guardian or curator acting on his behalf. The executor should consult with such guardian or
curator. The mere fact that a person does not have legal capacity himself is not sufficient grounds to realise an
asset, except where an award in specie would really be impossible, as in the case of the minor mentioned above. As
nominee, the guardian or curator may, in his representative capacity, accept the asset in specie on behalf of the
incompetent heir pending majority or until the obstruction ceases to exist. An executor must always act in the best
interests of incompetent heirs.
Finally, it would be a futile exercise if the executor were to decide on the method of awarding an asset in specie
and then discover that the heir is not prepared to accept it. This is why the need for consultation and cooperation
between the executor and the heirs was stressed above. In doubtful cases, the wishes of the heirs must be
established before a decision is made to use a particular method of liquidation.
5.2 Partial sale
Heirs are not entitled to an inheritance from an estate before the executor has discharged the estate debts and
liabilities, and paid out legatees' cash bequests. The administration process also requires cash and it goes without
saying that few estates can be settled without cash in hand. If no or insufficient cash is available in an estate, it is
an inherent function of the executor to realise estate assets (that is, convert them into cash) in order to obtain the
necessary moneys. His powers in this regard are so wide that he may even act against the stipulations of the will.
Once sufficient cash has been obtained to discharge the estate's financial obligations and to complete the
administration process, his powers to realise the assets cease. As Bouwer (supra) 101102 put it so succinctly "It is
not his duty, nor is it his function, to sell estate assets without justification or testamentary authority if the estate's
financial obligations can be met" [Translation].
An interesting question concerning this method of liquidation is what property from the estate the executor
should sell in order to make up a cash deficit. The executor is bound by the provisions of section 47 o f t h e
Administration of Estates Act. He must sell property in the manner and subject to the conditions which the heirs
who have an interest therein approve in writing. A different procedure is followed for shares or property sold in the
ordinary course of business. In general, it could be said that the executor allows himself to be guided by the
amount required to make up for the estate deficit, the nature of the assets, whether there is a reasonable market
for the particular type of asset, whether it would be easy or practical to distribute the assets among major heirs if
they are not sold, whether there is a possibility of risk or prejudice to the heirs, the stipulations of the will, and so
forth. For example, the deceased may have been a driller who needed a complete drilling machine for his work. The
beneficiaries would have no use for such a machine and if the executor is able to realise this asset, he should not
hesitate to do so. The stipulations of the will (if any) and the nature of the assets are of overriding importance.
[Page 57]
(i) The will The executor will in the first place attempt to safeguard assets specially bequeathed in the will, since
a bequest in specie by the testator is obviously accompanied by a wish that it be awarded in specie. Further, the
heir is naturally the first person whose interests may be prejudiced if the estate's liabilities cannot be met. Creditors
first of all look to legatees and then to prelegatees if there is no residue. The executor will therefore first attempt
to realise assets falling in the residue of the estate, and only once this class of assets has been extinguished will
he realise specially bequeathed assets that fall to the legatees. When it comes to a choice of property in the free
residue, an executor will have to use commonsense: if there is a cash shortfall of say R5 000, the executor will
choose an asset with more or less the same value it would be contentious if he sold a farm worth R5 000 000 in
order to discharge a debt amounting to R5 000.
(ii) The nature of the property As indicated above, assets not specially bequeathed in the will of the deceased,
should be realised to make up any potential cash shortfall. From this class of assets ordinary monetary investments,
(call deposits and cash on hand), as well as shares, fixed deposits, and so forth are realised first because they can
by nature more readily be converted into cash and the risk of loss and prejudice is smallest. These assets normally
also don't have huge sentimental value. Movable property is next and thereafter only, immovable property is to be
sold. If there is still a cash shortfall, specially bequeathed assets will be considered in the same sequence according
to the nature of the assets.
The general rules set out above are not legally binding on the executor. He may, in his discretion and after
careful consideration, depart from the sequence set out above and realise a specific asset. However, he must have
good reasons for taking such a step as he will have to answer to the Master.
5.3 Total sale
Total sale as a method of liquidation is applied in exceptional cases only. In fact, total disposal is applied only in
three cases, all of which will be discussed below.
(i) Testamentary instruction for total sale Occasionally, a testator stipulates in his will that all his assets are to
be sold after his death at a public auction and the cash distributed among his heirs. In reality, this means that the
testator leaves his executor no choice of method of liquidation. Only one principle is involved here and that is
freedom of testation. Any person capable of drafting a will may stipulate what must be done with his property after
his death. His wishes must be carried out since it is a cardinal rule that the intention of the testator must be
obeyed. If the testator therefore stipulates that his property must be sold after his death, it must be sold and this
rules out any agreement between the executor and the heirs to use any other method. Where an executor is
instructed under the will to sell the estate assets in a feasible manner, he is obliged to do so. Any departure from
the procedure laid down is not allowed, even though such departure would clearly hold more advantages than
disadvantages. Only the court may authorise departure from a testamentary instruction.
[Page 58]
(ii) Sale for reasons of necessity Circumstances may compel an executor to sell estate assets. Bouwer (supra)
106 mentions four such cases.
(a) Necessity owing to statutory provisions
A is a practising attorney with a thriving law practice. He leaves this law practice to his son B, who does not
have any tertiary qualifications. B will not be able to take over the law practice, as the Attorney's Act would
prohibit him from doing so.
(b) Necessity to prevent detrimental consequences Assume an estate consists of some tools, implements,
investments of a speculative nature, and so forth. The only heir is a threemonthold baby girl. It would make
more sense to realise all the assets and to invest the money in favour of the minor for her future education
and training and to assist her in establishing herself. Another example: The main asset in the estate is a hotel
with offsales, naturally including the necessary liquor licence. The heirs are all living abroad and personal
attention is impossible. Think of the prejudice and damage an award of specie would cause! A final example: B
inherits A's hardware business which requires the owner's personal, specialised services in order to be
successful. B has no business acumen, or perhaps he is a mentally incapacitated person. Unnecessary trouble
and problems can be eliminated by selling the total estate.
(c) Necessity owing to indivisibility of property The deceased may have stipulated that his movable property
must be divided equally between his brothers. The movable property consists of a television set, a bed, a
camera, a motor vehicle and a radio. The deceased is survived by three brothers. An equal distribution of
these assets would be impractical and unfeasible. Clearly, an award in specie is impossible, unless the heirs
agree to a specific distribution. In the absence of such an agreement a sale of all the assets and distribution
of the proceeds is the only solution.
An important problem with the indivisibility of assets which makes an award in specie impossible and a total
sale unavoidable, is where the estate consists of farm property and is bequeathed to, for example, three
heirs. This situation is regulated by the Subdivision of Agricultural Land Act 70 of 1970.
This Act is entirely repealed by the Subdivision of Agricultural Land Act Repeal Act 64 of 1998 as pointed out in
1.6 above. This repeal Act is still waiting in the wings, the date of its commencement having not as yet been
promulgated. Act 70 of 1970 is therefore currently still applied and the provisions of sections 3, 4 a n d
especially section 5 should continue to be noted by practitioners. An extract containing these sections is
included as an Annexure in the Legislation section of this work.
Although in the first place these provisions require the scrupulous attention of the estate planner (compare
the introductory remarks in chapter 1), these aspects may not have received attention when the will was
drafted. The administrator faced with this problem would find himself in the position of being unable to make
an award in specie to the major heirs in the case of a bequest of agricultural land. He would either have to
request permission for subdivision from the minister in terms of section 4 which could delay the settlement of
the estate for years and would in any case not easily be [Page 59] granted or he would have to convince
the heirs to come to a redistribution agreement. Another solution would be to establish a private company
with the heirs as shareholders or interested parties and then register the land in the name of such company.
This will result in the payment of transfer duty as this procedure is regarded as a sale to the company, as the
property was not bequeathed to the company in the will of the deceased. If these steps are unsuccessful
either because the heirs won't cooperate or because of other problems, the executor would have no choice
but to comply with the further provisions of section 5(1) and realise the property. The potential disadvantages
involved are that ruling market prices may not be good for such properties and that the price ultimately
received may be much less than the property is actually worth. As mentioned above, the only way to avoid
this problem is through timely and proper estate planning.
If the maps were drawn up before 1970, applying to the minister is merely a formality. If at any time you have
to deal with this kind of case, it would do no harm to enquire from the SurveyorGeneral (SG) about maps that
were drawn up and approved prior to 1970. You may discover to your great surprise that it was in fact done,
but that the subdivision transfers simply were not registered. This liaison with the SG should ideally be
performed by a conveyancer who is well versed in the process of transferring portions of land, as the first
transfer needs to contain the approved diagrams and the wording of the relevant section of the title deed is
somewhat different to other title deeds.
(d) Necessity due to the indivisibility or inadmissibility of transfer An estate may consist of assets that
cannot lawfully be transferred to the heirs. The example above in respect of an award in specie where we
referred to a minor (now a person under the age of 18) inheriting shares in a company which statutes exclude
minors as shareholders is applicable here also. If the estate consists of such shares, total disposal would be
the only solution. Another example: The asset in the estate is the deceased's interest in a firm managed as a
partnership. In terms of the principles of the law of partnership, a partnership is dissolved when one of the
partners dies and the heirs cannot take the place of the deceased in terms of the law of succession. The
deceased's interest in the partnership will therefore have to be realised.
(e) Necessity due to insolvency In dealing with an insolvent estate, assets have to be reduced to cash in
terms of section 34(2) of the Administration of Estates Act. Insolvent deceased estates can also be formally
sequestrated in terms of the Insolvency Act. This method is not regularly used, as the benefits of being able
to cross examine the insolvent are clearly not available due to him being deceased.
(iii) Sale at the request of the heirs As frequently stressed above, the wishes and interests of the heirs play an
overriding role in the administration of an estate. This also applies to the realisation of assets. In fact, if the heirs
choose total disposal of the estate, the executor will do so and pay out their inheritances in cash.
[Page 510]
If in a particular case the executor has to realise estate assets, the question inevitably arises as to how he
should go about it. What follows below applies to both a partial as well as a total sale of estate assets.
Section 47 of the Administration of Estates Act forms the sum and substance of this aspect and for this reason it
is quoted in full:
47. Sales by executor.Unless it is contrary to the will of the deceased, an executor shall sell property (other than
property of a class ordinarily sold through a stockbroker or a bill of exchange or property sold in the ordinary course of
any business or undertaking carried on by the executor) in the manner and subject to the conditions which the heirs who
have an interest therein approve in writing: Provided that
(a) in the case where an absentee, a minor or a person under curatorship is heir to the property; or
(b) if the said heirs are unable to agree on the manner and conditions of the sale, the executor shall sell the property
in such manner and subject to such conditions as the master may approve.
The consequence of section 47 is that an executor may sell estate assets that have to be realised only in such a
manner and subject to the conditions approved in writing by the heirs who have an interest in the property. The
position at present is therefore that the Master's permission to a sale is required only in the exceptional cases
mentioned in section 47. The provisions of the section do not apply to shares normally sold by a stockbroker,
negotiable instruments such as cheques and bills of exchange, or property sold in the normal course of any
business run by the deceased.
It is important to note that an executor may not arbitrarily realise estate assets, or under any circumstances
arbitrarily realise an entire estate unless the will expressly authorises him to do so or unless the heirs grant the
necessary permission to do so. In Buxmann's Executors v The Master 1932 CPD 241 247, the judge set out the
position very clearly:
In my opinion when considering whether or not it is the duty of executors to realise any asset in an estate one must
enquire whether such realization is necessary for the purpose of discharging the liabilities of the estate or for the purpose
of carrying out the provision of the will of the testator.
The general rules applicable to the realisation of estate assets may therefore be summed up as follows: An
executor who has to realise estate assets cannot arbitrarily choose any method. He must follow a specific sequence
of preference. This sequence of preference is as follows:
(1) Testamentary instruction A will often contains specific instructions to the effect that the executor must
use a particular method of realisation, or that specific assets must be offered to the heirs for purchase at
specific prices. The executor is bound by such instructions, because "he must always do what the will tells
him" (per Broome JP in Cradock's Estate v Cradock 1951 (3) SA 51 (N)).
(2) Heirs' instruction If the heirs do not fall under the exceptions mentioned in section 47(a) and (b), they
instruct the executor in writing to sell and also state how the assets must be sold. If section 47(a) and (b)
are applicable, the Master must be approached about the manner and conditions pertaining to the assets
that must be sold.
[Page 511]
The explanation so far sums up the general rules pertaining to the realisation of estate assets. Next we will pay
closer attention to the manner in which a sale by public auction and by private treaty or by public tender must be
dealt with, since such sales are of particular practical importance.
o Sale by public auction As soon as it is evident that estate assets must be sold, the executor will draw up
draft conditions of sale for approval by the heirs who have an interest in the assets. The contents of this
document are usually in standard form and most law firms and trust companies keep a precedent or example
for continuous use, so that only the changing details, such as the name of the estate, the description of the
property, and so forth have to be filled in each time. In the case of sales from a deceased estate it is
important that, apart from the customary conditions usually applicable to public auctions, the following
conditions are clearly reflected:
(i) the sale of the asset will be voetstoots ("as is") and cash;
(ii) if the asset is immovable property, an approved bank guarantee for the full purchase price must be
furnished by the successful bidder in favour of the estate, payable against registration of the property
in his name;
(iii) the purchaser will be liable to the estate for interest on the purchase sum for a reasonable occupational
compensation pending registration of transfer in his name if he is permitted to take immediate
possession of the property;
(iv) the purchaser is liable for all costs involved in the transfer of the property from the estate to him (bear
in mind that this is the standard arrangement for transfer of properties even though it is the
prerogative of the seller to nominate the transferring attorney);
(v) the purchaser will be liable for all municipal rates and taxes, levies and fees which may be imposed by a
local authority on the property from the date of the sale. The auctioneer or sheriff's commission also has
to be paid by the purchaser;
(vi) the sale is subject to the issuing of a certificate by the Master in terms of section 42(2) o f t h e
Administration of Estates Act to the effect that no objection exists to the transfer of the property from
the estate to the purchaser.
The following aspect regarding a prospective sale which an executor must thoroughly investigate, is the issue
of proper notification of the sale. The nature and scope of the notice will depend on the nature and value of
the asset to be sold, the location of the property if it is a fixed asset, and so forth.
Newspaper advertisements are the most common medium of notification, although other methods such as
handbills, circulars, and so forth may be used. In reality the form of the notification or advertisement does not
really matter provided it meets the following requirements:
(i) all interested parties (i.e. parties with a proven interest in the estate, not merely curiosity) must be
notified of the date, place and time of the sale;
[Page 512]
(ii) the publicity given to the intended sale must be suitable in view of the type of asset and its value. For
example, it would be pointless to advertise the sale of an estate of an exclusive Boland wine farm with
an enormous Cape mansion in the local newspaper of a village in the Limpopo Province. Similarly, it is
inconceivable that the total disposal of an estate consisting of a handful of odds and ends of small value
would be advertised in a newspaper with a countrywide circulation which charges R2 500 for a single
insertion;
(iii) a full description must be given of the asset/s for sale;
(iv) the date, exact time, and place of the sale must be prominently announced these details must catch
the eye when the advertisement is read;
(v) it should be stated clearly that the assets will be sold voetstoots and in cash. In the case of the asset
being immovable property, it will of course be "subject to all existing conditions in the title deed(s)".
These might include restrictions on the building of a second dwelling, registering the property in the
name of more than one person and the like.
(vi) Notwithstanding the prior permission of the Master, it is sometimes advisable to make the sale subject
to his confirmation. This usually applies only in the exceptional cases mentioned in section 47(a) and (b).
Once the executor has set out his conditions of sale and planned his "advertising campaign" on the basis of
the above, he must obtain an agreement to the sale by the heirs who have an interest in the relevant assets.
It would be sensible to include a condition in the instrument of agreement that they accept the price the
assets fetch on the auction. Once the heirs have given their permission for the sale, the executor may
commence with and complete the sale. If the provisos of section 47 are applicable, however, the Master's
permission will have to be obtained and he will have to indicate the conditions on which he approves such
sale and the manner in which it takes place.
Before transfer of immovable property from an estate to the purchaser can take place, the Master must
first issue a certificate in terms of section 42(2) to the effect that there is no objection to the transfer to the
purchaser. The Master issues this certificate after the sale has taken place and the executor must submit
certain documents (including the power of attorney to pass transfer, the deed of sale, the application for
section 42(2) endorsement) to the Master (see Annexure A15) in order to receive the certificate.
o Sale by private treaty or by public tender This method will probably be the most popular method of selling
estate property where the heirs agree to it in writing. It is faster and more convenient than a public auction
and a better price is often fetched. In this case the executor would be wise to enter in the permission
document signed by the heirs the amount which they would be prepared to accept. This will prevent
dissatisfaction among the heirs when they suddenly find that the amount the assets were sold for is not
acceptable. An executor worth his salt will make provision for the whims of fickle heirs and take precautions
against possible unpleasantness after the fact.
[Page 513]
Once the heirs have given their permission for the sale, the executor can proceed with closing the
transaction if it is a private sale or making final arrangements for the submission and allocation of tenders if it
is a sale by public tender.
As in the case of a sale by public auction, the executor must also, after completion of the sale, apply for the
Master's endorsement in terms of section 42(2) of the Administration of Estates Act in order to effect
registration of transfer from the estate to the purchaser or successful tenderer. The documents that have to
be submitted to the Master before he will issue the certificate are set out in Annexure A15.
5.4 Taking over by surviving spouse in terms of section 38 of the Administration of Estates Act
In terms of section 38 a testator's surviving spouse may under certain circumstances "take over" the estate or a
portion of the estate at an amount determined by an appraiser or other person appointed by the Master. In
practice, this means that the surviving spouse "buys out the heirs", so to speak, by taking over the estate property
at the amount determined by the appraiser and then distributes the proceeds instead of the property in specie
among the heirs. It is not a sale in the normal sense of the word, although as far as the heirs are concerned, it has
the same effect as a cash sale. It is an administrative process and a particular method of liquidation used where
minors are involved. Such a takeover means that the family stays on in the residence where the deceased and his
family lived before his/her death.
A surviving spouse who wishes to take over the estate, or a portion of the estate, of a deceased spouse in
terms of section 38, must provide the Master with an affidavit signed by the surviving spouse personally and
containing a request for taking over. The executor must endorse the affidavit. According to Bouwer ( supra) 119 and
further this statement must contain the following information:
(i) the full names of the deceased, the reference number of his estate in the Master's Office and the full name
and address of the surviving spouse;
(ii) a confirmation that the estate is solvent;
(iii) a concise list of all the estate assets and liabilities;
(iv) an express request for taking over the estate with specific reference to section 38(1) of the Administration of
Estates Act 66 of 1965. If only a portion of the estate is involved in the request, such property must be
identified;
(v) the reason(s) for the request for taking over;
(vi) how the rights of persons with claims against the estate, if any, will be protected;
[Page 514]
(vii) a list of the names of all beneficiaries of the estate, indicating whether they are majors or minors and their
relationship to the deceased. If the person died intestate, a nextofkin statement on the prescribed form
J192 must be completed and lodged with the application for taking over. This nextofkin statement contains
details of all the deceased's nextofkin, whether dead or living (annexure A16);
(viii) where minors are involved as beneficiaries, the following must be mentioned:
(a) the reasons for believing that the proposed takeover will be to the personal advantage of the minors;
(b) whether the surviving spouse requesting the takeover intends providing a home for the minor children
of the deceased and if so, whether the residence is part of the fixed property of the estate to be taken
over;
(c) whether the minor children's inheritances will be paid into the guardian's fund and whether security will
be provided to this end. If the inheritances will not be paid into the guardian's fund in cash but will be
secured instead, full details must be furnished of the security offered, for example a mortgage bond
over immovable property. In such case the Master will supply a draft bond procuration (annexure A17);
(d) details of any assets which the surviving spouse possesses in his/her own right;
(ix) whether the surviving spouse intends selling the assets he/she wishes to take over, and if so, full details
must be provided.
Before the Master issues a certificate of approval for taking over in terms of section 38, the following requirements
must also be met:
(i) the account must have lain open to inspection free of objection;
(ii) all major heirs must have agreed to the takeover in writing;
(iii) sworn appraisals of all assets to be taken over must be submitted to the Master;
(iv) minors' inheritances must be paid into either the guardian's fund or be properly insured;
(v) proof must be furnished that all estate debts have been settled;
(vi) all Master's fees must be paid (please note that this is no longer paid at SARS, but payment should be made
at any one of the commercial banks using the appropriate bank details and reference number in order to
enable SARS to properly allocate the payment).
It should therefore be clear that this method of liquidation is applied only in exceptional circumstances. Since only a
surviving spouse may perform such a takeover, it is clear that the range of application is not very wide. This
method of liquidation may be considered in an instance like the following. A deceased and his spouse were married
out of community of property and had two children, one aged 16 years and one aged 3 years. The estate assets
after settling all the [Page 515] debts amount to R1 500 000 and consist of a house only. The husband dies
intestate and in terms of the Intestate Succession Act 81 of 1987, as amended, which commenced on 18 March
1988, the spouse inherits a child's portion or R250 000, whichever is the larger. In this example the spouse and the
two children will inherit R500 000 each. Since the alternative would be to sell the house and pay the two children's
portions into the guardian's fund, it may call for a section 38 takeover by the surviving spouse. She receives the
house, and a mortgage bond in favour of the Master is registered to ensure the inheritances of the two children. It
is apparent, therefore, that the facts of a particular estate will determine the method of administration selected.
The Master's discretion to decide on an application for a takeover in terms of section 38 is an administrative
function and is final. No appeal to the High Court is allowed. The administrator must furnish sound reasons in his
application.
It is submitted that the time has come for this method of liquidation to be laid to rest. It is very cumbersome and
occurs only in rare and exceptional circumstances like the example quoted above. A better (and far easier) way of
obtaining the same result is to invoke the provisions of the Maintenance of Surviving Spouses Act 27 of 1990.
5.5 Redistribution agreement among the heirs
This method of administration is quite common. In the majority of intestate estates, as well as several testate
estates, it may be essential to make use of this method. For example, if a testator stipulates that his property must
be distributed equally among his three children, it is possible to determine that each should inherit R500 000. The
assets, however, do not usually consist of cash only but may include a house, policies, shares, furniture, motor
vehicles, and so forth. In order to distribute these assets, an agreement must be reached on who must inherit
what. As Dowling J put it in Klerck NO v Registrar of Deeds 1950 (1) SA 626 (T) 631:
There is contemplated some sort of reshuffle of assets in the estate, which would in any case have passed to the heirs, in
a way which departs in some respect from the actual disposition of the will or the normal course of devolution ab
intestato.
A redistribution agreement among heirs departs from the stipulations of the will and the rules of the law of
intestate succession in the sense that coownership of assets is dissolved and each heir is entitled to sole
ownership of those assets allocated to him in terms of the redistribution agreement. It is important that executors
make very sure that such an agreement does in fact exist before distributing the assets. Bouwer (supra) 121
asserts:
The basic principle is sometimes lost sight of and the executor as well as the interested parties find themselves in an
awkward position. For example, an executor must divide 100 head of cattle between 2 heirs. The executor does what
appears to be the logical thing he sells 50 head of cattle and keeps the rest for the heir who insists on handing over.
The result is that the executor has created a situation where each heir [Page 516] must receive the half of the proceeds
of 50 head of cattle, as well as half the remaining cattle, in equal parts. [Translation]
Where the beneficiaries are all majors and it is clear that the purpose of the agreement is merely to shuffle the
assets which would in any case have fallen to them, no problems would normally be experienced in obtaining the
necessary permission from the Master. The Master is not concerned with the issue of whether a redistribution
agreement is lawful. His duty is to examine the agreement as part of the executor's account. He endorses the
agreement as "accepted", which indicates that the agreement has been examined as required. When minors are
involved in a redistribution agreement, the Master will pay closer attention to the specific portion they are to
receive. If it appears that their portion is more or less equal in value to those of the other heirs, it is normally
approved. If it appears that the minors' portions are less than those of the other heirs, the Master will most
probably refuse to approve the redistribution agreement. Note that the High Court must approve a redistribution
agreement if a minor's interest in fixed property forms the subject of the agreement and amounts to more than
R100 000 (section 80 of the Administration of Estates Act,).
The objective of such an agreement must always be a redistribution of assets. Each heir involved in the
agreement must contribute something and receive something. If this does not happen it is not a redistribution
agreement but rather a deed of donation, a disguised sale, an assignment of estate or something similar. It must
be clear that the main objective of the agreement is redistribution and nothing else.
As far as redistribution agreements are concerned, it is important also to refer to section 7(a) of the Deeds
Registration Amendment Act 43 of 1957. This subsection replaced the existing section 14(1)(b)(iii) of the Deeds Act
(47 of 1937) in a significant way. Section 14 of the Deeds Act provides the sequence in which deeds must be
registered and according to this provision, the deeds must follow the sequence of their relative causes (section
14(1)(a)). It is unlawful to depart from this sequence in the registration process (section 14(1)(b)). Section 14(1)(b)
(iii) and (iv), however, reads:
(iii) if in the administration of the estate of a deceased person (including a fiduciary) any redistribution of the whole or
any portion of the assets in such estate takes place among the heirs and legatees (including ascertained
fideicommissary heirs and legatees) of the deceased, or between such heirs and legatees and the surviving
spouse, the executor or trustee of such estate may transfer the land or cede the real rights therein direct to the
persons entitled thereto in terms of such redistribution;
(iv) in a redistribution mentioned in proviso (iii) it shall be lawful to introduce movable property not forming part of the
estate for the purpose of equalising the division.
Section 14(1)(b)(iii) therefore allows, by means of a proviso, an exception to the abovementioned general rule in
the case of redistribution agreements between heirs in a deceased estate. In such a case it is permissible to depart
from the prescribed sequence and an heir receiving fixed property from an estate as a result of a redistribution
agreement between another heir and himself obtains [Page 517] transfer in his name of that fixed property
directly from the estate. It need not be transferred first via the heir who originally inherits it from the estate.
Section 14(1)(b)(iv) also makes it possible for heirs to bring in movable property that is not part of the estate if this
is necessary in order to achieve an equal distribution. Consequently, in a redistribution agreement, it is possible to
deposit money from outside into the estate in order to ensure an equal division with which the redistribution
agreement may interfere. Each heir involved in a redistribution agreement must give something in exchange for
something and it must be clear from the agreement that the intention is redistribution. The moment one heir
renounces his entire inheritance in favour of another heir or trades or sells his inheritance to another heir, we are
strictly speaking no longer dealing with a redistribution agreement. An example of such an agreement appears in
Annexure A18.
In view of the fact that testamentary dispositions to inter vivos trusts are valid (Kohlberg v Burnett NO and Others
1986 (3) (AD)), it is submitted that an inter vivos trust inheriting property may be a party to a redistribution
agreement between heirs, provided that the agreement is signed by all the trustees in their capacities as such. If
they cannot reach consensus between themselves as to whether or not the agreement should be entered into and
the trust deed provides for majority decisions with regard to the exercise of powers by trustees, it is submitted that
the agreement could validly be entered into pursuant to a majority vote. In all instances however, the redistribution
agreement should not be in conflict with any of the trust objects or detrimental to the interests of the trust
beneficiaries. It should be noted that, previously, the redistribution agreement could be entered into between the
beneficiaries in their absolute and unfettered discretion, provided that their right to act was not impaired in any
manner (e.g. they were not minors, insolvents or otherwise had their capacity to act diminished). Lately, however,
SARS holds the view that, should one of the parties to the redistribution agreement receive more than was
bequeathed to him/her, such party has received a donation and that donations tax is payable. It might be wise to
include a clause that such a person should make a payment to the other party/parties in order to ensure that an
even distribution is ensured. For this purpose, the redistribution agreement should be carefully drafted.
5.6 Administration of insolvent deceased estates
Section 34 of the Administration of Estates Act deals with the administration of insolvent deceased estates. After
expiry of the advertising period in which creditors have been given the opportunity to lodge their claims, the
executor must determine whether or not the estate is solvent. Insolvent estates are not to be confused with illiquid
estates (the former being estates in which the value of the assets is less than the value of the liabilities and the
latter being estates where there is a liquidity problem coupled with a cash shortfall). If it becomes clear that the
estate is insolvent, he must inform the creditors immediately. A copy of the [Page 518] notice must be sent to the
Master. The notice must state than unless the majority of creditors request him to surrender the estate in terms of
the Insolvency Act, the executor must liquidate the assets in terms of section 34(2). In the administration of an
insolvent deceased estate, the provisions of section 34 must always be borne in mind. Often the creditors will agree
to reduce their claims proportionally to the amount that is available in the estate for distribution. E.g. if there are
concurrent claims (after paying the administration costs and settling of preferential claims such as the bank who
might hold a mortgage bond over a property) of R2 000 000, but only R400 000 cash in the estate, and if each
creditor agrees to accept a distribution of 20 cents in the rand, the estate can be finalised on that basis (and not in
terms of section 34). The creditors are then requested to reduce their claims proportionally.
Chapter 6
The doctrine of election, adiation, repudiation and massing of estates
6.1 The doctrine of election
6.2 Massing
6.3 The mechanism of massing of estates
6.3.1 Legal institutions involved in massing and the resulting legal
relationships
6.3.2 Section 37 of the Administration of Estates Act (Act 66 of 1965)
6.3.3 A diagrammatic illustration of massing
6.4 The risks involved in massing
6.5 Exercising an election in writing: The certificate
6.6 Repudiation or renunciation of limited interests by intermediate beneficiaries
[Page 63]
6.1 The doctrine of election
The doctrine of election applies where a beneficiary nominated under a will is required by that will to dispose of his
own property or is left property subject to certain conditions (in the will of the deceased). Such beneficiary must
either decide to accept the testamentary benefit and abide by the disposal of his own property, or must disallow
the disposal of his own property, thereby forfeiting the testamentary benefit in his favour. The same principle
applies where the testamentary benefit is subject to a condition, or to an obligation such as a modus. Assume a son
inherits a farm but must pay his sister a certain sum of money before he can claim the inheritance (a bequest price).
If the beneficiary decides to accept the benefits in his favour as created under the will, he thereby accepts all the
other conditions of the will and must abide by them, failing which, he forfeits all benefits as a beneficiary under
the will. His choice, once exercised, is final and cannot be changed or withdrawn at a later stage without the
court's permission. If a beneficiary changes his mind after adiating (accepting) or repudiating (rejecting) the terms of
the will naming him as beneficiary, he must convince the court that he adiated or repudiated without properly
grasping the consequences of his choice, and that in the circumstances his lack of understanding of the specific case
should therefore be condoned. Since the choice must be exercised in writing under the beneficiary's signature and
the Master lays down certain requirements concerning the contents of such adiation or repudiation certificate, the
court will not allow a reversal of the beneficiary's choice unless it is satisfied, on a balance of probabilities, that a
bona fide misapprehension did occur in the beneficiary's mind as claimed.
Acceptance of a benefit under a will is called adiation, and rejection of a benefit is called repudiation. The normal
adiation (or repudiation) certificate therefore contains a clause stating that the consequences of
adiation/repudiation have been explained to the beneficiary and that he/she has grasped the consequences of
such action.
A beneficiary faced with the doctrine of election may not partly adiate and partly repudiate. The son in the
example above cannot accept the bequest of the farm and reject the concomitant obligation to pay the bequest
price to his sister he must either accept or reject the "total package". Corbett and others in The Law of Succession
in South Africa Juta (1980) 458 give a succinct summary of this important principle
Stripped down to its essentials, the doctrine is a simple one: Where strings are attached by a testator to a testamentary
benefit, the beneficiary cannot take the benefit and ignore the strings.
Stipulations in a will which cause a beneficiary to be faced with an election occur in different forms, hence an
administrator of estates has to be capable of identifying such stipulations. Besides submitting to the Master an
adiation or repudiation certificate in writing and in the required form under his client's signature, he is also expected
to explain to the client the full implications of his choice to adiate [Page 64] or repudiate. Clients often expect the
administrator to guide them on the best option in view of their particular circumstances. An illconsidered choice may
hold detrimental consequences for the client and the other beneficiaries, besides causing problems relating to the
administration and distribution of the estate. Assume H (husband) and W (wife) are married in community of
property. They have two children, a son S and a daughter D. H and W draw up a joint will in which they stipulate
that if H predeceases, the farm in the joint estate must pass to S, the furniture and a motor vehicle to D, and the
residue of the estate to W. H dies first and is survived by W, S and D. W is now faced with the doctrine of election:
she must decide between either accepting the stipulations of the joint will or invoking the matrimonial property
regime. In other words, she must decide whether she wishes to lay claim to the half share she owns in terms of the
marriage in community of property, that is, the farm, the furniture and the motor vehicle; or whether she will allow it
to pass, together with H's half share in the relevant assets, to the children in terms of the will. If she exercises the
latter option she effectively adiates and allows disposal of certain assets of her own in favour of the children in
terms of the will, while the residue of the joint estate passes to her. If she exercises the first option, however, she
repudiates the joint will and receives only her half share of the joint estate in terms of the matrimonial property
regime and cannot inherit anything in terms of the will. The joint will does not entirely fall away as a result of W's
repudiation: it remains standing as H's will and takes effect with respect to H's half share in the joint estate, which
must therefore be distributed as follows:
The farm
o a half share to W in terms of the marriage in community of property
o a half share to S as heir in terms of the stipulations of the will
The furniture and the motor vehicle
o a half share to D as heir in terms of the stipulations of the will
The residue
o In virtue of W's repudiation she forfeits all benefits as a beneficiary in terms of the will; consequently
there is no heir for the other half of the residue, which must therefore be distributed among W, S and D in
accordance with the rules of intestate succession. Depending on the extent of the residue, S and D will
each receive a child's portion and W a child's portion or R250 000, whichever is the greater.
The total effect of W's repudiation is as follows:
The farm
Since it is impossible in principle according to the provisions of the Subdivision of Agricultural Land Act (Act 70 of
1970) for W and S to become coowners of the farm, such an eventuality could cause awkward administration
problems and prejudice the interests of the parties in the event that the farm ultimately has to be sold in terms
of section 5(1) of the above Act because [Page 65] W and S are unable to come to a practicable agreement. This
Act is in the process of being repealed (by means of the Subdivision of Agricultural Land Act Repeal Act 64 of
1998), but as at the date of this publication, it has not been signed into law. As indicated in chapter 5, the whole
issue of land and land ownership is a very contentious one. One of the questions is whether farms should be
subdivided into small portions of land in order to afford more South Africans the opportunity to own agricultural
land. The consequence of this would be that such small portions of land would probably not be able to sustain
any bona fide farming operation and the food security of the whole country could suffer as a consequence.
The furniture and the motor vehicle
W and D become coowners of the furniture and the motor vehicle, and although such a situation would be more
manageable than that affecting the farm, it might nevertheless lead to acrimony and vexing difficulties,
particularly if W remains on the farm and D lives a few hundred kilometres away in the city. An undivided half
share in the motor vehicle, which is legally quite in order, could hardly be of any practical use to W and D.
The residue
Depending on the nature of the assets comprising the residue, the executor may face the same problems
described above in the case of the farm, the motor vehicle and the furniture.
Therefore
W ultimately receives the largest portion of H's estate, which means that S and D do not receive nearly as much
as H intended.
In certain cases it may be better for a surviving spouse or other beneficiary faced with the doctrine of election to
repudiate. Depending on circumstances, adiation can create as many problems as repudiation; hence it follows that
an executor or estate administrator should be thoroughly conversant with the law relating to the doctrine of
election since such knowledge will enable him to provide the parties concerned with sound advice on the practical
consequences for them of deciding in favour of adiation or repudiation. The executor is obliged in all cases of
adiation or repudiation to furnish a certificate indicating that he/she has explained the effects of
adiation/repudiation to the heir faced with the decision to elect either of these options. The reason for this
requirement is that the decision will ultimately stand as an informed decision (see section on certificate below).
6.2 Massing
Massing occurs when two or more persons with testamentary capacity combine or consolidate (mass) their
separate estates (or their undivided halfshares of their joint estate where they are married in community of
property) into a single (massed) estate, prescribing in the will what must be done with this massed estate [Page 6
6] on the occurrence of a specific event. In practice, this event is invariably the death of the firstdying partner in
the joint will. At the death of the firstdying partner the surviving partner is faced with the doctrine of election. He
must decide whether he wants to adiate and accept that his own assets will devolve as part of the massed estate
in terms of the stipulations of the joint will while he receives some benefit or other under the will (see below). If he
elects to repudiate the massing fails and the surviving partner retains his own assets while relinquishing the
testamentary benefit that would have fallen to him had he decided to adiate.
In practice, it is usually married couples (whether married in or out of community of property) who utilise
testamentary massing. However, there have been instances where the parties were not married to each other
e.g. two sisters, a father and son etc.
6.3 The mechanism of massing of estates
In order to properly grasp massing and its practical implications, it is important to understand the testamentary
process which ultimately results in massing. It is also important to take cognisance of the various legal concepts
that play a role in massing and of the legal relationships that arise between the different parties to a massing
arrangement.
The first step towards massing is a valid joint (mutual) will executed by two or more persons with testamentary
capacity in which it is clearly and unambiguously apparent that their intention is to combine their separate estates
into a single, consolidated unit. Secondly, it must be clear that they wish this joint estate to be administered and
distributed as one estate at the occurrence of a specific event, usually the death of the firstdying. In order to rebut
the presumption against massing to good effect, it is essential that a testamentary clause be drawn with due
regard to the abovementioned principles in order to provide for the massing; failing which the will is ultimately
nothing more than the separate wills of the respective testators, contained in a single document, in which each
disposes of his or her own, separate estate. In the third place, the manner in which the massed estate must be
distributed and the identity of the beneficiaries must be stated, as well as the nature of the benefit that must fall to
the survivor(s) on adiation. When the event occurs which the testators stipulated for the massing to take effect
(usually the death of the firstdying), massing still does not take place. At this point, the survivor (or survivors)
must decide between adiation and repudiation. Massing only takes effect when the survivor adiates. One could
say that massing is one of the cases where the doctrine of election becomes apposite. If the survivor decides to
repudiate, the massing fails and only the firstdying's estate devolves as stipulated in the will. The survivor retains
his own estate and still has full right of disposal over it. He forfeits only the benefits which would have accrued to
him if he had chosen to adiate. Therefore, if the survivor adiates, his estate is consolidated (massed) with that of
the firstdying's estate and he receives some benefit or other under the will "in recompense", so to speak, for his
adiation (discussed below). In addition, the act of [Page 66(1)] adiation results in the permanent loss for the
survivor of his capacity to revoke the joint will, since, after all, he has accepted that his own assets will devolve to
the nominated beneficiaries as part of the massing. Note, however, that massing cannot be brought about in and of
itself by adiation. A mutual will in which massing is contemplated must be drafted with sufficient clarity to ensure
that it does not fall foul of the presumption against massing. In Rhode v Stubbs 2005 (5) SA 104 (SCA) the Supreme
Court of Appeal explained the interaction between massing and adiation in a most exemplary manner. Conradie JA
(at 109GH) pointed out that adiation is indeed a necessary activity in the process (italics [Page 67] supplied) of
massing, but that it was not a necessary condition for its creation (italics supplied). On the other hand, massing on
its own has no effect beyond confronting the survivor with the need to exercise election.
In this instance the court found, upon the facts before it, that the mutual will executed by the parties could not
survive the presumption against massing and would therefore have to be regarded as two separate wills.
6.3.1 Legal institutions involved in massing, and the resulting legal relationships
Massing can be brought about with the aid of various legal institutions. The rights of the survivor, like those of the
other heirs, depend without fail on the relevant legal institution. The following are cases in point.
(a) A and B stipulate in their joint will that their massed assets must pass to their children upon the death of the
firstdying, subject to a usufruct for life in favour of the survivor. When A dies and B adiates, massing takes
place and the total massed estate goes to the children subject to the usufruct in favour of the survivor. While
this usufruct exists, the children have only the bare dominium over the assets and the legal relationship
between them and their mother is governed by the legal principles relating to usufruct.
(b) A and B stipulate in their joint will that their massed assets must pass to the surviving testator at the death
of the firstdying, and to the children at the death of the surviving testator. When A dies and B adiates,
massing takes place and a fideicommissum is established. A is the founder or fideicommittens, B the fiduciary
and the children the fideicommissaries. The legal relationship between B and the children is governed by the
legal principles that apply to fideicommissa. If the will stipulates that a certain proportion of whatever remains
of the massed estate must pass to the children at B's death, a fideicommissum residui is created and the legal
rules applicable to this form of fideicommissum applies.
(c) A and B stipulate in their joint will that their massed assets must be relegated to a trust at the death of the
firstdying, to be administered by the nominated trustees on behalf of the survivor and the children. The
survivor receives the income or a portion of the income from the trust until her death (or remarriage), while
the trust capital (the trust corpus) is ultimately be distributed among the children when they reach a specified
age. When A dies and B adiates, a testamentary trust (a trust mortis causa) is established, with A as the trust
settlor, B as income beneficiary, and the children as capital beneficiaries. The legal relationship between
the trustee(s), the survivor and the children is governed by the provisions of the trust deed, the Trust
Property Control Act (Act 57 of 1988), other applicable legislation, and the common law relating to the law of
trusts in general.
[Page 68]
6.3.2 Section 37 of the Administration of Estates Act (Act 66 of 1965)
This section has significant implications for massing and reads:
If any two or more persons have by their mutual will massed the whole or any specific portion of their joint estate and
disposed of the massed estate or of any portion thereof after the death of the survivor or survivors or the happening of
any other event after the death of the firstdying, conferring upon the survivor or survivors any limited interest in respect
of any property in the massed estate, then upon the death after the commencement of this Act of the firstdying, adiation
by the survivor or survivors shall have the effect of conferring upon the persons in whose favour such disposition was
made, such rights in respect of any property forming part of the share of the survivor or survivors of the massed estate
as they would by law have possessed under the will if that property had belonged to the firstdying; and the executor
shall frame his distribution account accordingly.
The three examples above leave the clear impression that at adiation, the survivor always receives some limited
(interim) interest or another, either in the form of a usufruct or a fiduciary right or a right as income beneficiary in
terms of a trust (however, see the remarks on the position concerning a discretionary trust below).
The effect of section 37 is that heirs who inherit the massed estate receive exactly the same rights in respect of the
survivor's contribution to the massed estate that would fall to them from the firstdying's contribution. They may
therefore claim delivery, cession or registration, depending on the type of property, of all the assets in the total
massed estate; including, therefore, the assets contributed towards the massing by the survivor. Section 37
provides that the executor who administers the estate shall be obliged to frame his liquidation and distribution
account accordingly. If the survivor is declared insolvent after the massing the assets he/she contributed towards
the massing will not fall to his/her insolvent estate because they no longer belong to him/her but to the heirs who
inherited it in terms of the joint will. (See Cronje et al. Workbook for the law of succession, 2nd edition, Butterworths
Durban 1996, 154.)
In practice, at adiation, the survivor sometimes does not receive a limited interest under the will but is entitled to
something else instead. For example, if A and B stipulate in their will that the survivor inherits the house while the
residue of the massed estate passes to their children at the death of the firstdying, the question arises whether
such a case could still be regarded as massing in light of the provisions of section 37 of the Administration of
Estates Act. This question is answered as follows by I Vorster in Cronje et al. (supra) 155:
The answer to this question is not immediately apparent. What is clear is that it does not fall within the scope of section
37 of the Administration of Estates Act and that one cannot therefore call it "statutory massing" (that is, massing as
contemplated by section 37). The survivor obtains, after all, full ownership of an asset and not only a limited interest. An
analysis of the courts' viewpoint and that of academic writers indicates that there are two approaches to this problem.
The first is that we are concerned with a "common law massing" here and that section 37 of the Administration of Estates
Act is not applicable. The second approach is that the concept of massing should be restricted to those cases which fall
within the ambit of section 37 since its commencement on 2 October 1967 and that all other situations should be seen as
a direct application of the doctrine of election.
[Page 69]
6.3.3 A diagrammatic illustration of massing
The following diagram is offered as an aid to understanding the above explanation of massing:

[Page 69]
6.4 The risks involved in massing
Marital partners frequently utilise massing. I Vorster, in Cronje et al. (supra) 152 explains as follows:
An important reason for the use of the massing of estates in a married couple's will is that the surviving spouse can be
put in control of the massed estate as long as he/she lives and would therefore be able to maintain the standard of living
to which he/she was accustomed during the marriage. If there are minor children of this marriage at the death of the first
dying the surviving spouse can educate and maintain the children at the same level as during the existence of the
marriage while the interests of the children, who are usually the eventual heirs, are protected since the surviving spouse
who adiated at the death of the first dying cannot tamper with the provisions of the mutual will. The surviving spouse is
also protected against him or herself because he/she cannot alienate the massed property in conflict with the provisions
of the mutual will. It is important to keep in mind that the mutual will becomes the will of the first dying at his/her death,
followed by the adiation of the survivor. The survivor's adiation results in his/her being bound to the provisions of the
will. If the survivor does not want to be bound in this way, he/she has the right in terms of the doctrine of election to
repudiate [Page 610] at the death of the first dying in which case he/she will not obtain any benefit from the will either.
Estate planners, who are supposed to keep a watchful eye on their clients' estate duty situation, have come to
realise the possibilities of massing as an instrument that can be utilised, depending on circumstances, to minimise
or even avoid estate duty. Although a detailed discussion of the subject falls outside the scope of this work, some
points are worthy of consideration because serious tax implications can accrue from undiscriminating use of
massing. The following simple example is a case in point.
Example
A, a relatively young person with a large estate, foresees that his estate will attract a
considerable amount of estate duty at his death. He has already utilised every possible
"estate pegging technique" available to him inter vivos but it appears that his estate will
ultimately still be subject to estate duty. B, a relatively elderly person, has a smaller
estate with no estate duty implications. A and B draw up a joint will. According to this will
they mass their separate estates at the death of the firstdying, which in the normal
course of events will be the elderly B. The massed estate devolves in favour of
nominated beneficiaries. At adiation, A as the survivor receives a limited interest or other
benefit which is so insignificant that the valuation will result in much less or no estate
duty at his own death. Since estate duty is imposed on the estate of a deceased person,
only B's estate (that is, what B has contributed to his and A's massed estate) is subject to
estate duty at B's death. Because B's estate is relatively small, no estate duty is payable
at his death. Because A is still alive and well at this stage, no estate duty is payable on
A's estate (in other words, what A has contributed to his and B's massed estate). The
effect of this scheme is that B disposes of his estate without paying estate duty by
utilising the mechanism of massing while he is still alive. He is still able to exercise
considerable control over his estate if for example a trust has been created in the joint
will and, besides being a trust beneficiary, he is also one of the trustees of the trust.
As might have been expected, SARS in due course became aware of the existence and purpose of such schemes
and therefore, when an occasion similar to that recounted above arose, intervened by applying section 58 of the
Income Tax Act 58 of 1962, read with section 55(1) of the same Act. Said section 58 reads:
58. Property disposed of under certain transactions deemed to have been disposed of under a donation.
Where any property has been disposed of for a consideration which, in the opinion of the Commissioner, is not an
adequate consideration that property shall for the purposes of this Part be deemed to have been disposed of under a
donation: Provided that in the determination of the value of such property a reduction shall be made of an amount equal
to the value of the said consideration.
Section 55(1) of the Income Tax Act defines a donation as "Any gratuitous disposal of property including any
gratuitous waiver or renunciation of a right" (emphasis added).
[Page 611]
The facts in this particular case, which was reported in 46 SATC, are briefly as follows: Two testators, a father
and son, drew up a joint will in which they stipulated that at the death of the firstdying their separate estates
(with the exception of a few assets)
... must be regarded as massed and consolidated and treated and administered as one estate.
This massed estate was bequeathed to three trusts in terms of the will. The son and his three children were the
trust beneficiaries. The will further stipulated that certain annuities were to be paid to the survivor. At his father's
death the son adiated and the Commissioner regarded the difference between the total value of the massed
assets and the benefits accruing to the son under the will as a donation in terms of section 58 of the Income Tax
Act, and levied donations tax on it.
The son appealed to the Transvaal Income Tax Special Court, which agreed with the Commissioner. Although the
appellant conceded that the value of the benefits accruing to him under the will (that is, the value of the annuities)
was much less than his contribution to the massed estate, he argued that the transfer of his assets as part of the
massed estate was a testamentary disposal and that section 58 of the Income Tax Act therefore did not apply; nor
did section 55(1), since there had been no gratuitous disposal of his assets after all, he had received something in
exchange for it, even though what he received was not substantial.
However, the court found that the son's contribution to his and his father's massed estate was in fact a
"disposition" which fell within the scope of section 58 and should obviously therefore be offset against any benefit
that the son acquired (e.g. if the son acquired assets to the value of R1 000 000 and gave up a benefit to the value
of R500 000 the net "disposition" would be R500 000).
The survivor had a choice to adiate or to repudiate. In my opinion his adiation is a disposition in terms of section 58 and
the compensation he received for it was correctly [interpreted] by the Commissioner as being insufficient. In my opinion
the Commissioner was correct in his finding that the disposition fell within the scope of s 58 of the Act (46 SATC 121).
[Translation]
The application of section 58, with due consideration of section 55(1), can be elucidated with reference to the
following hypothetical premise where a discretionary trust is presumed to have been created by the testators. (This
example is based on a real of facts.)
H and W are married in community of property. They draft a joint will, stipulating that if H dies first the joint
estate (that is, the undivided half share which each one had by virtue of the matrimonial property regime) must be
massed and passed to a discretionary trust created in the will. Their children must be the capital beneficiaries and
W the income beneficiary. H dies first and W adiates. What was a joint estate (since that the parties were married
in community of property) now becomes a massed estate. The trust deed stipulates that the trustees have a free
and unfettered discretion to pay or withhold payment of the trust income to W during the existence of the trust.
Such an arrangement is often found in trust deeds (the reason for this is irrelevant to the present discussion). Of
importance here is that such an arrangement means that W receives no vested rights in respect of the trust income
(see for example CIR [Page 612] v Sive's Estate 1955 (1) SA 249 (A)). By adiating, therefore, W relinquishes her half
share in the joint estate and receives nothing in exchange. This constitutes a gratuitous disposal of property as
contemplated in section 55(1) of the Income Tax Act and is consequently subject to donations tax. It must be
pointed out that, strictly speaking, the example above is not really a case of massing because when W, the
survivor, adiates, she receives absolutely no benefit in the form of a vested right in terms of the will. It is rather a
case where only the doctrine of election comes into play, without a massing being effected upon adiation by the
survivor. As indicated, if the surviving spouse sacrifices more than he/she receives donations tax is levied on the
difference in value between what the surviving spouse sacrifices and that which he/she receives.
The risks associated with massing as outlined above should be duly considered by everyone involved in drafting
wills and planning estates for clients. It is most undesirable to draft a massed will at the client's request without
thoroughly analysing all his financial affairs first. Massing is only beneficial to the clients in rather exceptional cases.
An executor or administrator who was not involved in drafting the will and is confronted (after the death of the first
dying spouse) with the situation in terms of which the wife will have to choose to either retain her estate (or her
half share of the joint estate where the marriage was in community of property) or to accept the consequences of
the massing, will have to be aware of the implications set out above, for instance because it may be in the
survivor's interests, depending on circumstances, to repudiate in order to avoid incurring a heavy liability for
donations tax.
A discussion on the problems associated with tax implications may also be found in 1988 (27) Income Tax
Reporter 5 and further, under the heading "Massing of Estates Recent Developments". See also: The Taxpayer
March 1989 56 and further, and PA Olivier and GPJ van den Berg Praktiese Boedelbeplanning Juta (1991) 149 and
further.
6.5 Exercising an election in writing: The certificate
Adiation and repudiation may have serious implications not only for anyone faced with the doctrine of election but
also for the other beneficiaries of the will and the administration of the estate as such. It is therefore
understandable that the Master lays down certain requirements for an acceptable adiation or repudiation
certificate, as the case may be. These requirements may be summed up as follows:
(1) the beneficiary must expressly state that he is aware of his rights to adiate or to repudiate, as the case
may be, and that he nevertheless elects to adiate or repudiate the will, as the case may be;
(2) it must be expressly stated that the testamentary stipulations which make the doctrine of election
applicable were intended by the testators;
[Page 613]
(3) where massing is at issue, the massing stipulated by the will, as well as the assets affected by such
massing, must be referred to;
(4) where massing is at issue, it must be expressly stated that the massing was intended by the testators
(this is essential because there is a strong presumption against massing, and the intention must therefore
be very clearly stated);
(5) it must be expressly stated that the survivor understands his/her legal position and is fully aware of the
effects and consequences of the election;
(6) an attorney or someone with the necessary expertise on the strength of his profession must certify, at the
end of the document containing the adiation or repudiation, under his signature that the implications and
legal consequences of the election have been explained to the person concerned, that the latter has
stated that he/she fully understands the consequences of his/her action and has nevertheless decided to
adiate or repudiate, as the case may be;
(7) the document must be signed before witnesses by the person exercising the election.
The election must be exercised within a reasonable time but the beneficiary cannot be compelled to make the choice
before he knows what material consequences will arise from his choice. The beneficiary normally acquires this
knowledge when the executor is ready to draw up his liquidation and distribution account. The beneficiary may not
exercise his choice before dies cedit.
An example of an adiation certificate appears in Annexure A19.
[Page 613]
6.6 Repudiation or renunciation of limited interests by intermediate beneficiaries
Executors of deceased estates and administrators of testamentary trusts are sometimes confronted with a
situation where the beneficiary of a limited interest, such as a fiduciary in the case of a fideicommissum, or an
income beneficiary in the case of a trust, repudiates the benefit at the death of the testator or, after adiating,
eventually renounces or waives the benefit. The question that then arises, is whether an "acceleration of benefits"
in favour of the ultimate beneficiaries can take place. The situation can be elucidated with reference to the following
typical examples:
(a) A bequeaths property to B and provides that upon the latter's death the property must go to C, D and E in
equal shares. The will further provides that if B is predeceased by any of C, D or E, his share of the
fideicommissary property must go to his children and, if childless, his share must devolve upon the remaining
fideicommissaries. The question here is the following: If B repudiates the fiduciary benefit at A's death, or if he
renounces the benefit in the course of time after adiating can C, D and E lay claim to [Page 614] their
respective shares of the fideicommissary property, notwithstanding the fact that:
. the will expressly states that the fideicommissary substitution takes place at the death of B; and
. the will contains a substitution clause in terms of which a predeceased fideicommissary heir is
substituted by his children or the remaining heirs, as the case may be?
(b) H bequeaths property to a testamentary trust, with his wife W as income beneficiary and his two sons as
capital beneficiaries. The trust deed provides that the trust capital shall vest in the sons in equal shares upon
the death of W, alternatively that W is to be substituted for his children if one or both of them predeceases
him. In light of this background the following question arises: In the event of a repudiation or waiver executed
by W, can the vesting of the capital in the two sons be accelerated regardless of the provisions of the
substitution clause and the fact that W is still alive?
These questions gave rise to a considerable body of case law, indicating a measure of divergence of approaches
adopted by the courts. A strict or literal interpretation of the will, placing the emphasis on the wording used by the
testator in creating the limited interest, and on the significance of a substitution clause as a final indication that the
ultimate beneficiaries cannot be determined unless and until the interim interest ceases by virtue of the death of the
interim beneficiary, would tend to defeat an accelerated vesting. On the other hand, a more benevolent or "liberal"
approach, where the emphasis is placed upon the underlying or "putative" intention of the testator within the
context of the will as a whole, rather than on its precise wording, may allow an accelerated vesting notwithstanding
a substitution clause, provided that there are no other clear indications in the will to the contrary: see, for instance,
Webb v Marquard NO and Another 1981 (2) SA 43 (C).
Two earlier cases illustrating these two different approaches are Ex parte Alberts 1944 TPD 187 and Ex parte
Marais 1953 (4) SA 620 (T). The former case provides an example of the strict approach based on the language
used by the testator, which resulted in the court's refusal to grant an acceleration of benefits in favour of the
ultimate beneficiaries. On the other hand, on a set of facts substantially similar to that obtaining in Ex parte Alberts,
the court did allow an acceleration of benefits in the latter instance, obviously on the basis that the underlying
intention of the testator should take precedence over a literal interpretation of the language that he used:
"When property is bequeathed to A with a fideicommissum in favour of B taking effect on A's death, the reason for the
postponement of B's rights is prima facie the anticipated life interest of A. When the reason fails because of A's
renunciation of the bequest, there is no reason to suppose that the testator intended a postponement of vesting in B
under these conditions; and even where a substitute is nominated for B, should he predecease A, there is still prima facie
no reason to suppose that the testator intended the postponement to operate for the benefit of the substitute. B would be
able to claim the bequest as of right if there is a renunciation by A unless there are indications to the contrary in the will"
(page 234 of the report of the Marais case; italics supplied).
[Page 615]
As far as trusts are concerned, the approach adopted in Marais had been followed in Emmanuel and Others v Estate
Rice 1968 (3) SA 502 (W) and a number of other cases. Two more recent decisions involving the acceleration of
benefits in the case of trusts are Louw and Others v FWKP Albrecht Trust 1998 (3) SA 1048 (C) where an application
for acceleration was granted, and Hirschsohn NO and Others v Horn NO 1990 (1) SA 769 (C) where acceleration was
refused.
An indepth discussion of the state of the law with regard to the acceleration of benefits falls outside the scope
of this work, but can be found in an excellent, scholarly article by Nathan Segal "Waiver of a life interest" in De
Rebus, March 1979 257 et seq. See also Corbett, Hahlo, Hofmeyr and Kahn The Law of Succession in South Africa,
second edition 2001 (Juta) 150 et seq. for an authoritative exposition of the relevant principles and case law.
In conclusion, it should be pointed out that a waiver of a vested limited interest by an interim beneficiary without
any quid pro quo may be subject to donations tax in view of the provisions of section 55(1) of the Income Tax Act
(Segal 259). Moreover, even where a renunciation is coupled with some form of consideration pursuant to an
arrangement between the interim beneficiary and the ultimate beneficiaries, SARS may test the quid against the quo
and invoke the provisions of section 58 of the Act if the Commissioner is not satisfied that the consideration is
adequate.
Chapter 7
How estate assets are accounted for in the estate account
7.1 Immovable assets
7.2 Movable assets
(i) Furniture
(ii) Motor vehicles
(iii) Jewellery
(iv) Firearms
(v) Livestock
(vi) Shares
(vii) Insurance policies
(viii) Members' interest in a close corporation
(ix) Outstanding salary and leave pay
(x) Cash assets
[Page 73]
It is not the intention of this chapter to discuss every possible type of asset a person may acquire in a lifetime.
Obviously, most economically active people accumulate a variety of assets during their lifetime. These assets are
included in their estates at the time of their demise. It would be an impossible task, in a work of this scope, to
discuss all the assets that could possibly make up an estate and how they should be accounted for. We will
concentrate only on those assets most likely to occur in an average person's estate and which represent an
ordinary enterprising person's attempts to "provide" for himself and eventually for his heirs.
Earlier we pointed out that when estate assets are entered in the liquidation section of the Liquidation and
Distribution (L&D) account, immovable property is entered first, followed by movable property.
Before discussing the different types of asset, we must first take a look at the vouchers or supporting documents
the Master will find acceptable in each case. At present, section 35 states that the executor is no longer obliged to
present documentary evidence with the account. This concession considerably lightens the Master's work load.
Executors should nevertheless keep vouchers on file in case the Master requires it for some reason or a beneficiary
decides to challenge the executor on the issue as to whether he has received his inheritance (or a creditor disputes
having been paid). A voucher (signed by the beneficiary) will overcome any potential problems in this regard. For
cash transfers, the proof (issued by the bank) of electronic transfer of funds, would suffice. Whether or not a
voucher is acceptable will depend on the circumstances. Usually vouchers are fairly standard and the same for all
estates. Sworn appraisals for immovable property must be submitted in a specified form. Financial institutions
usually supply certificates reflecting the balance of savings accounts or fixed deposits in a standard form. In some
cases, however, the Master may insist on further proof. In order to establish whether a voucher or supporting
document will be regarded as satisfactory, a distinction is usually drawn between best proof and discretionary (or
acceptable) proof.
Best proof is the strongest proof that can be furnished. The document required will normally fully cover the value
of the item in the account. The Master is fairly certain to insist on best proof when the estate is or may be dutiable
or where the estate is to be distributed on the basis of the value of specific assets. For example, if a testator
bequeaths his farm to his son on condition the son pays out half the value of the farm to his sister, best proof will
be required. In cases where the net value of the estate is less than R3,5 million, the Master is unlikely to insist on
sworn valuations of the estate assets, due to the fact that no estate duty is payable on such estates.
The Master will normally rely on his discretionary powers to allow discretionary proof. These vouchers are usually
readily available and often less expensive than best proof.
We will first discuss how immovable or fixed assets are accounted for in the liquidation account, and then move
on to movable assets. The kind of proof available will be indicated in each case.
[Page 74]
7.1 Immovable assets
Immovable assets must be entered in the asset section of the liquidation account and their description must be in
accordance with the title deed description. It is advisable to use the correct description (as it appears on the title
deed), otherwise the Deeds Office might raise a query upon the transfer of the fixed property. A conveyancer's
certificate will be acceptable to the Deeds Office in cases where the property description differs from the formal
description in the Deeds Office, eg 254 Church Street, Marikana could be the same property as Erf 332 Marikana,
Registration Division JR, North West and the Deeds Office would normally require the transferring conveyancer to
issue a certificate confirming that the two property descriptions (the one in the will and the one on the transfer
deed) in fact relates to the same property.
An appraisal should preferably be conducted by a sworn appraiser, since his written appraisal will be regarded
as best proof. In certain cases, however, the Master may be prepared to accept discretionary proof.
In terms of Instruction 39 issued by the Master on 30 August 1988, municipal valuations of fixed property will be
acceptable without any levy, except in the following cases:
(1) if the executor must provide security in terms of section 23;
(2) if a takeover is contemplated as a method of liquidation in terms of section 38;
(3) if the interests of minor children, absent or unspecified heirs, or persons incapable of handling their own
affairs are involved;
(4) if estate duty is payable or likely to be payable;
(5) if the estate passes in trust to trustees or curators;
(6) if the valuation of the assets serves as the basis for determining the extent of an inheritance.
Even in the abovementioned cases, the Master may under special circumstances be prepared to dispense with
sworn appraisals at the written request of the executors.
The procedure described above applies only to immovable property awarded to beneficiaries in terms of a
testamentary disposition or the law of intestate succession, and which is therefore transferred to them by the
executor.
Where immovable property is sold out of the estate, whether to discharge estate debts, or owing to a stipulation
in the will by the testator, or for whatever reason, the title deed description of the immovable property so sold must
be given. In addition, the fact that it has been sold, how it was sold and to whom it was sold must be stated. The
proceeds of the sale must be entered in the money column instead of the valuation. Since such proceeds are
deposited into the estate as cash, they must be reflected in the recapitulation statement.
Example
Erf 742 POTCHEFSTROOM Registration Division J.T., NORTH WEST
HELD in terms of Deed of Transfer T6421/2010 dated 7 May 2010
Sold by public auction to P Barker for R700 000.
Be sure to use the correct title deed description of the property. If you fail to do that, the Master may at a later
stage refuse to effect the necessary endorsements on the power of attorney for transfer. If this is not done, a
conveyancer's certificate [Page 75] would have to be issued confirming that the property mentioned in the
Liquidation and Distribution account is the same property as the one now being transferred.
Ownership of a unit in a sectional title scheme is a common phenomenon and sectional title units often form part
of the immovable property in deceased estates. What has been said above with regard to the importance of an
accurate description of immovable property, applies to an even greater extent to property that was owned by a
deceased under sectional title. This is due to the unique attribute of this form of ownership, namely that a sectional
owner enjoys individual ownership of a part of a particular building, but also obtains ownership of an undivided
share in the "common property" of the scheme, i.e. those sections of the land and buildings that are not subject to
individual ownership
For purposes of reflecting a sectional title property in the liquidation account, it is advisable to follow the
description in the title deed.
Example
A unit comprising of:
(a) Section 8 as shown and more fully described on sectional plan No. SS 102/83 in the
scheme known as GREENWILLOWS in respect of the land and building or buildings
situated at erf 465 Potchefstroom, POTCHLOKWE LOCAL MUNICIPALITY, of which
section the floor area, according to the said sectional plan is 54 (FIFTYFOUR)
square metres in extent; and
(b) An undivided share in the common property in the scheme apportioned to the said
section in accordance with the participation quota as endorsed on the said sectional
plan.
HELD by the deceased under Deed of Transfer ST 42538/2002.
Appraised value (3) R650 000,00
7.2 Movable assets
Instruction 39 mentioned in the discussion on immovable property above applies to movable property as well.
Valuations by two impartial persons are automatically accepted, except in the cases mentioned in the Instruction.
(i) Furniture Best proof in this instance is also a valuation by a sworn appraiser but in an average estate the
Master will accept discretionary proof in the form of a valuation by two independent persons who each receive a list
of the furniture for examination, inspect the furniture and value each item. In most "average" estates the
deceased's furniture may not have any commercial value and could be given a nil value in the liquidation account,
unless it is, eg antique furniture with a very high monetary value.
If the deceased was a collector of antique furniture, it is advisable to have such furniture valued by a reputable
dealer in antiques and to file his valuation certificate as documentary proof. Circumstances will dictate whether it
would be necessary to obtain a sworn appraisal or whether an inexpensive valuation would be acceptable.
[Page 76]
(ii) Motor vehicles Motor vehicles are entered in the liquidation account with a brief description, for example
"one 2012 Toyota Corolla motor vehicle". The best proof is a sworn appraisal by an appraiser but the Master usually
accepts discretionary proof in the form of a valuation by an authorised dealer in the specific make. The valuation is
furnished under his letterhead .
(iii) Jewellery In many instances, the sentimental value of jewellery is greater than its financial value and, if this
is the case, for the sake of convenience it may be left out of the estate since that would harm noone. Some people
purchase expensive jewellery on a large scale and in recent times it has become customary among wealthy people
to invest in exclusive jewellery in order to beat inflation. Instead of investing their money at interest rates often
lower than the official rate of inflation, they prefer investing in precious stones, such as diamonds, which have great
appreciation potential. Such assets must obviously be accounted for in the liquidation account, since concealment
could lead to serious prejudice. In many instances, the omission of articles such as jewellery also leads to fierce
family quarrels. Some beneficiaries are resentful and begrudge the ones receiving the jewellery. An innocent
omission could have serious consequences. For this reason it is wise to make sure that any valuable jewellery is
accounted for. The sentiment of the family should be taken into account before reaching a decision on how to deal
with the assets such as jewellery.
The only acceptable supporting document in this case would be a sworn appraisal by a duly appointed appraiser
or a valuation by a reputable jeweller. A brief description must be given of such assets.
Example
One 2 carat diamond ring set in 18 carat gold R250 000,00
(iv) Firearms The heir to whom a firearm is bequeathed or who inherits it out of a deceased estate, will have to
satisfy the authorities that he/she is proficient in the handling of the weapon. Of late, the authorities have become
increasingly strict in the granting of licenses for firearms.
One of the upshots of the Firearms Control Act, 60 of 2000 is that the mere fact that an heir or a legatee
stands to inherit a firearm from a deceased estate, whether by way of a testamentary bequest or according to the
rules of intestate succession or pursuant to a redistribution agreement, will no longer play a role in the
consideration by the authorities of such an heir's application for a firearm licence. The beneficiary (heir/legatee) will
have to make out a case that he/she is a fit and proper person to own a firearm, by, inter alia, undergoing the
training and practical tests contemplated in regulation 14 for purposes of obtaining a competency certificate,
whereafter the prescribed application procedure according to regulation 13 must be followed.
[Page 77]
It should be noted that the Act places certain limitations on the number of firearms that may be privately owned.
These limitations are connected to the intended purpose for such ownership, namely selfdefence, hunting, sports
shooting or private collection, as contemplated and detailed in Chapter 6 of the Act. The Act also places numerical
limitations upon the rounds of ammunition that may legally be possessed in respect of each category of firearm.
It should be clear from the very broad outline above that an executor of a deceased person who owned firearms
should at least have a working knowledge of the Act and Regulations. He must, however, be absolutely conversant
with the requirements regarding the safe custody and eventual disposal of firearms found in the estate, with specific
reference to the provisions of regulations 86 and 103. Regulation 103 specifically deals with the disposal of firearms
in insolvent and deceased estates and these provisions, as far as deceased estates are concerned, can be
summarised as follows:
(1) The executor bears the ultimate responsibility for the control and safe custody of all firearms in the estate
pending the finalisation of the windingup process and the ultimate disposal of the firearms pursuant to
the liquidation and distribution account. He must compile an inventory of the firearms as prescribed by
regulation 103(3)(a) and present it to the Firearms Office at the appropriate police station. The firearms,
including any ammunition, must be stored as provided in regulation 86(1), which provides as follows:
When a firearm is not under the direct personal and physical control of a holder of a licence, authorisation or
permit to possess the firearm, the firearm and its ammunition must be stored in a safe or strongroom that
conforms to the prescripts of SABS Standard 9531 and 9532, unless otherwise specifically provided in these
regulations.
(2) Regulation 103(1) provides that a person nominated as executor in the deceased's will but who has not as
yet been furnished with letters of executorship by the Master may apply to a Firearms Officer for a
temporary authorisation to possess the firearms of the deceased. In the absence of a nominated executor,
or where the deceased has died intestate, the heir, next of kin or close relative of the deceased may apply
for a temporary authorisation to possess the firearms pending the appointment of an executor in the
estate by the Master. Temporary authorisations are granted in terms of section 21 of the Act.
(3) Once the executor is formally appointed by the Master, regulation 103(2) takes effect and the executor
must take steps to ensure the safe custody of the firearms and ammunition of the deceased and store it in
a storage facility as prescribed in regulation 86. If the executor himself does not have a storage facility, eg
a firearm safe that meets the requirements laid down by regulation 86(1), the firearms may be stored with
an heir of the deceased provided that the heir is a licensed firearm holder and has the required storage
facility available. In such, a case the executor must issue a letter of consent to the heir for storing the
firearms, wherein full particulars of the firearm are set out as prescribed by regulation 103(1)(b). [Page 7
8] A copy of regulation 103 is included in the legislation section of this work.
Disposal of firearms in a deceased estate by an executor
Firearms that are not awarded to an heir may be sold to a person who is able to obtain the required
firearm licence in terms of the Act, or surrendered to the police in terms of regulation 94, destroyed in
terms of regulation 104, or deactivated in terms of regulation 105. It should be noted that the executor or
heir may under no circumstances destroy or deactivate a firearm themselves in any manner whatsoever
and doing so is a criminal offence. The procedures prescribed by the aforementioned regulations must be
strictly adhered to. Copies of these regulations are also included in the legislation section of this work.
Reflection of firearms in the liquidation account
A description of the nature and make of each firearm found in the estate, as well as the manufacturer's
serial number and the value of each firearm must be stated. The value must be supported by an evaluation
of an appointed appraiser or a registered dealer in firearms and ammunition. The Master may, in his
discretion, accept the value as reflected in the inventory without any additional proof (Bouwer, op.cit 265).
Example
Musgrave cal 308 bolt action rifle, serial number 34057, together with 50 rounds
of ammunition, appraised by Wind & Weather (Pty) Ltd at (10) R10 500
The divestment note will depend on the manner in which the firearm is to be disposed of. If the firearm is
awarded to an heir or sold out of the estate, the divestment note must be drafted accordingly. Keep in
mind that the firearm may only be handed over to the heir or purchaser after a firearm licence to own
the particular firearm has been issued to her/him. Pending the obtaining of such licence, the executor
must keep the firearm in safe custody as provided in the Act and Regulations. In this connection, the
executor must take due notice of the provisions of regulation 103(7), which imposes a duty upon him to
report back to the relevant authorities in writing on a threemonthly basis on the progress that is made
with the transfer of the firearm and the steps taken in that connection. Firearms not awarded to heirs or
sold out of the estate must be either surrendered to the police or deactivated according to the regulations,
and the divestment note drafted accordingly. No appraisal of such firearms is necessary and the value is
reflected as nil.
Example
Beretta 12 bore shotgun, serial number 1245 and 20 rounds of ammunition, surrendered
to the South African Police Services for destruction (12) Nil
The voucher will be the official receipt issued by the police against surrendering of the firearm and must be
kept available by the executor for submission to the Master if required.
[Page 79]
(v) Livestock According to Bouwer (supra) 263 the concept "livestock" is a neutral word which does not signify
anything specific. Consequently, it is not sufficient to enter the collective noun "livestock" in the liquidation account.
The word must be followed by a description of the kind of animals involved. Furthermore, the animals must be
properly classified. If some of the animals possess characteristics that make them more valuable than others, for
example registered or stud stock, these characteristics must be mentioned.
Example
100 German merino sheep (11) R140 000,00
3 German merino stud rams (12) R240 000,00
10 dry Frisian cows (13) R80 000,00
1 registered Brahman stud bull (14) R120 000,00
2 Jersey heifer calves (1 year) (15) R10 600,00
The Master is usually prepared to accept discretionary proof here unless the circumstances of the estate are such
that best proof is required. Best proof is again an appraisal by an appointed appraiser. Discretionary proof may take
different forms in this case, for example:
(a) a sworn appraisal by two farmers who, owing to their knowledge and experience, are able to determine the
current market value;
(b) an appraisal by an auctioneer.
(vi) Shares Here we must distinguish between shares in a company listed on the stock exchange and shares in
an unlisted company. In the first case only one type of proof is accepted, namely the valuation of a registered
stockbroker who undertakes the valuation according to the closing price on the stock exchange on the date of the
deceased's death. Where the shares are not listed on the stock exchange, the acceptable valuation is that of the
company's auditor.
The number of shares, the name of the company and the numbers of the share certificates must be entered in
the liquidation account.
Example
400 shares in ABC Limited, value on the JSE
(trading as at the date of death) (16) R16 000,00
Or, if the company is unlisted (it is important not to use the par value, but to have the shares valued as at the date
of death). Here it is standard practice for the deceased's accountant to perform the valuation (which is then
submitted to the Master with the Liquidation and Distribution account).
Example
400 shares in XYZ (Pty) Ltd, valuated by P Smith,
chartered accountant (17) R2 500
(vii) Insurance policies The value of an insurance policy for estate purposes is the gross value, that is the
insured amount plus all profits and benefits without [Page 710] any deductions. The name of the insurance
company is stated in the liquidation account, as well as the number and value of the policy.
Example
Old Mutual policy
Number GX254798P (18) R150 000,00
The insurance company usually deducts from the policy proceeds any premiums still owing at the date of death for
the year in question before the proceeds are paid over to the executor. The correct procedure in such a case from
the viewpoint of the estate is to reflect the gross value of the policy without the premium deduction in the assets
section of the account, and to contra the premium deducted by the company as a liability under the liability section.
A letter from the relevant insurance company is sufficient documentary proof.
It frequently happens that a person who has taken out a life policy in his or her own name, nominates a
beneficiary such as a parent or child, who will then be entitled to the proceeds of the policy upon the death of the
policy holder. In the matter of PPS Insurance Company Limited and Others v Simon Michael Makhabela (159/2011)
[2011 ZACA 119 (14 November 2011)] the Supreme Court of Appeal handed down a judgment involving such a
policy, which should be carefully noted by executors and administrators of deceased estates. The facts, in a
nutshell, were that a policy holder nominated her mother as beneficiary of the policy in the event of her death, but
reserved the right to change or cancel the nomination "at any time". Her mother died on 26 May 2007 and the policy
holder died afterwards, on 12 August 2007, without having nominated another beneficiary. The executor of the
beneficiary's estate claimed the proceeds of the policy in the High Court, which dismissed his claim and directed the
insurer to pay the proceeds to the executor of the policy holder's estate. The full court, on appeal, overturned the
court of first instance's decision on the basis that the insurance agreement between the policy holder and the
insurance company constituted a stipulatio alteri, and the benefit was capable of acceptance by the beneficiary's
executor upon the death of the policy holder. The SCA, however, whilst agreeing with the full court that the policy
holder's nomination of her mother was in fact a contract for the benefit of her mother as a third party, held that it
has erred in so far it found that the beneficiary's acceptance of her nomination (italics by the SCA) as a beneficiary
had some legal significance. The SCA consequently found that her estate had no claim to the proceeds of the policy
and that the proceeds vested in the estate of the policy holder. The gravamen of the SCA's reasoning was that it is
trite law that a nominated beneficiary does not acquire a vested right to the proceeds of a policy during the lifetime
of the policy holder, and that if the beneficiary predeceases the policy holder, such beneficiary (or his/her estate)
has no claim to the proceeds. It is suggested that practitioners study the entire judgment in order to gain a proper
understanding of the underlying legal principles as applied by the SCA.
(viii) Members' interest in a close corporation
The disposal of an interest held by a deceased member of a close corporation is governed by section 35 of [Page 7
11] the Close Corporations Act, 69 of 1984. This section prescribes the steps which the executor of the estate of a
deceased member must follow to deal with such interest in the process of winding up the estate.
Where a close corporation has more than one member, the members usually enter into an association
agreement stipulating how a deceased member's interest is to be disposed of. In such instances the executor
should therefore, as a first step, acquaint himself with the provisions of the agreement and will be bound to give
effect thereto. If there is no association agreement or the deceased was the only member of the close corporation,
the executor must cause the deceased member's interest to be transferred to a person who qualifies for
membership of a close corporation in terms of section 29 of the Act and who is entitled to it, either as an heir or a
legatee, or in terms of a redistribution agreement.
If there were more than one member of the close corporation, the remaining member or members must,
however, consent to such transfer and the executor accordingly has to direct a request to the remaining member or
members for consent. It is suggested that the request should be in writing and the date of delivery noted, because
if the consent is not given within 28 days thereafter, the executor may sell the deceased member's interest to one
of the following parties:
. the close corporation, if there is any other member or members over and above the deceased member;
. any other remaining member or members of the corporation in proportion to the interests of those members
in the corporation, or as they may otherwise agree; or
. any other person who qualifies for membership of a close corporation in terms of section 29 of the Act, in
which case the provisions of section 34(2) of the Act, which governs the disposal of the interest of an
insolvent member of a close corporation, apply mutatis mutandis in respect of such a sale. The ratio for this
provision is explained as follows by Davis et al. Companies and other Business Structures in South Africa (Oxford
University, Press 2009) 2278:
"This procedure is aimed at striking a balance between the interest of the other members of the corporation
at one hand and the creditors of the insolvent member on the other. The member's interest may be sold to
the corporation, to the other members or to an outsider who qualifies for membership. In the latter event,
the sale is subject to a right of preemption in favour of the corporation and other members. The same
procedure applies to the sale in execution of a member's interest pursuant to its attachment to satisfy a
judgment debt."
The executor of the estate of a deceased member should take due notice of the provisions of section 29(3)(c) of the
Act. In terms of this section, an executor which is not obliged or does not intend to transfer the member's interest in
the corporation in accordance with the provisions of the Act to another person within 28 days of his or her assuming
office, must within this period or any extended period allowed by the registrar upon application by him or her,
request the existing member or members of the corporation to lodge with the registrar an amended founding
statement in the prescribed form (CK2) designating him or [Page 712] her nomine officio as representative of the
corporation. Where the corporation has no other member, the executor must lodge such amended founding
statement (section 29(3)(d)). In this connection, it is submitted that regard should be had to the sensible
suggestion of Meyerowitz (op cit 1226), where the learned author points out that in view of the time taken to
advertise for creditors and the administration of a deceased member's estate, it will probably be necessary to lodge
the amended founding statement in every case .
The deceased member's interest could be reflected in the liquidation account as follows:
Example
Member's interest in XYZ CC
Registration No. CK46574/2004 (24) R150 000.00
The wording of the divestment note will depend upon the manner in which it is to be dealt with, e.g. transfer to an
heir in terms of a testamentary provision, the sale thereof or pursuant a redistribution agreement, as the case may
be.
(ix) Outstanding salary and leave pay If the deceased earned a salary before his demise, his employer may still
owe him an amount of his salary or wage, as well as an amount for accumulated leave pay up to and including the
date of his death. The employer pays such amount over to the executor and this amount forms an estate asset
which must be accounted for as such. It is by nature a cash asset which must be entered, together with any other
cash amounts, in the recapitulation statement. Most employers will pay the deceased employee's monthly salary for
the full month in which he/she passed away, but in some instances only a pro rata payment is made. This will
depend on what is stipulated in the deceased's employment contract.
Example
Outstanding salary and leave pay owing by employer ABC Limited (19) R32 980,00
Documentary proof is a letter from the employer under his letterhead in which the amount is set out, as well as a
calculation of any amounts deducted therefrom.
(x) Cash assets
(a) Balance in current bank account The balance at the date of death is the asset that must be entered in
the account. The bank where the deceased's account was held issues a balance certificate on request which sets
out the capital amount at the date of death.
Example
Credit balance in current account number 204 456 0985 at Standard
Bank Limited, Potchefstroom (20) R7 400,00
(b) Balance in savings account The Liquidation and Distribution account reflects the assets and liabilities of
the deceased at the date of death. All income [Page 713] and expenditure falling to the estate after the date of
death are accounted for in the income and expenditure account.
Savings accounts earn interest and this interest accumulates until the relevant savings account is closed and the
money deposited in the estate bank account. This usually means that interest has been included in the total
balance which accumulated after the date of death, as well as interest added to the capital amount from time to
time up to and including the date of death. In order to accurately reflect the position regarding a savings account,
the balance certificate requested from the financial institution concerned is entered in three parts, namely:
o the capital amount at the date of death;
o the interest accumulated until the date of death;
o any further interest accumulated since the date of death up to the date of withdrawal of the money and
closing of the account. This interest is accounted for in the income and expenditure account as income after
the death.
It may be difficult to obtain a balance certificate in the above form in view of the electronic format in which some
bank statements are processed nowadays. If you experience difficulties in this regard, do not waste time by
insisting on the "old" format and take the balance reflected as applicable to the date of death.
The balance certificate received from the bank is used as documentary proof in the income and expenditure account
for interest added since the date of death, as follows:
Example
Interest after date of death accumulated in savings account 405 3298 234 at
ABSA Bank Potchefstroom: (22) R122,75
Note that the income and expenditure account only deals with income collected. If the investment has not been
converted to cash when the account is being drawn up and no interest has been paid over, the executor may omit
the interest from his account and reconcile it in the heirs' receipts. This will save him the trouble of finding
documentary proof for the income reflected in the income and expenditure account. It is important to note that the
amount received from the bank will be a single amount (comprising of capital and interest). It is therefore the
responsibility of the executor to obtain and reconcile the balance certificate (as at date of death) with the amount
received from the bank (as the balance would constitute interest earned on the amount). Not all the banks issue a
certificate setting out how the amount paid out is made up (split between capital and interest).
The position set out under (b) above applies to any money market account which the deceased might have had at a
financial institution.
(c) Fixed deposits with financial institutions If the deceased held a fixed deposit for a specified period at a
banking institution, for example, and he died before the period expired, the handling of this kind of asset depends
on whether the investment will be realised or awarded to a beneficiary in specie as [Page 714] an asset. If there is
a cash deficit in the estate, it may be necessary to call up such an investment before the due date and to deposit
the cash into the estate. Some financial institutions meet the estate halfway and are prepared to pay out to the
executor the full amount of interest up to the date of withdrawal. Other institutions may pay out the capital but
penalise the estate because of early withdrawal by paying a reduced interest rate. Please note that if the interest
is paid out by the bank (i.e. the investment is not converted into the name of the surviving spouse), the interest
portion should be reflected in the Income and Expense account section of the Liquidation and Distribution account.
The procedure that applies to the balance certificate and interest after death applies to other cash assets as
well.
If a fixed deposit is reduced to cash, the asset is described exactly as above, but with a disclosure note stating
that the fixed deposit has been converted to cash and is therefore available as cash.
In annexure A20 a short summary is given of the handling of certain movable assets in an estate.
Chapter 8
How to deal with estate liabilities in the estate account
8.1 Introduction
8.2 Administration costs
8.3 Claims against the estate
8.4 Payment of claims by executor (section 35)
[Page 83]
8.1 Introduction
The sequence for entering the liabilities and debts of the estate in the liquidation account is as follows:
o Administration costs.
o Claims against the estate.
8.2 Administration costs
The following are all administration costs:
(i) Advertising costs During the administration process the estate is advertised twice in the Government Gazette
and twice in a local newspaper, which paper is to be circulated in the area in which the deceased was ordinarily
resident in the year prior to his demise. This is not the case for section 18(3) estates (estates with a value of less
than R250 000. The estate is advertised first to call upon creditors and debtors to lodge their claims against the
estate and to pay their debts to the estate, and secondly to notify interested parties that the completed Liquidation
and Distribution account is lying open for inspection. The Liquidation and Distribution account is to lie open for
inspection at the relevant Master's office (where the file was opened) as well as at the office of the Magistrate
Court in the town in which the deceased resided (if he/she did not reside in the city where the Masters Office is).
The costs for these advertisements should be reflected as a liability against the estate.
Rates for placing advertisements differ from newspaper to newspaper. Further, it is often difficult to obtain proof
of payment of advertising costs, since attorneys settle the account on the monthly statement. For this reason the
Master never insists on proof of payment of the account. It is accepted that if a newspaper is not paid for an
advertisement, no further advertisements will be placed and newspapers are therefore assured of payment. At
present, the Master accepts advertising costs in an estate as a given factor. If the costs appear exceptionally high,
he may make enquiries. It should be noted that the cost of placing advertisements in national newspapers, such as
the Sunday Times, is very high. This should be avoided if at all possible. As far as the Government Gazette is
concerned, no account is necessary, since the Master is aware of the prevailing fixed rate. Some local newspapers
are prepared to submit the advertisement to the Government Gazette on behalf of an advertiser (attorney) at an
additional cost. Please note that it is common practice to place the advertisements in the local newspapers for
publication on a Friday, as the Government Gazette is published on a Friday, unless the Friday is a public holiday (in
which case it is published on the Thursday).
[Page 84]
(ii) Master's fees Master's fees are not a form of tax, although the income obtained thus goes to the National
Treasury. Originally, these fees were paid to the Master to enable him to maintain his administration and to render
his services in respect of deceased estates .
The following remarks may be made in this respect:
(a) The Master's fees for all estates of persons who died on or after 1 January 2018 are calculated as follows:
(i) Value of estate is more than R250 000 but less than R400 000, Master's fees of R600 is payable
(ii) Value of the estate is more than R400 000 Master's fees of R200 for every completed R200 000 up to a
maximum of R7 000.
(b) If the deceased was married in community of property, Master's fees are payable in respect of the joint
estate, since the joint estate must, from the nature of the case, be administered as a whole.
(c) Master's fees are payable on the gross value of the estate as at the date of death. Fees are not payable on
income accruing to the estate after the deceased's death, nor on property a person possessed as fiduciarius
and which devolves to the fideicommissarius after his death.
(d) In the case of a fideicommissum residui, the Master does levy Master's fees.
On the executor's account, Master's fees are shown as follows:
Example
Master's fees on R1 500 000 R1 800
With regard to estates of persons who died on or after 1 January 2018, the Master's fees have been significantly
increased. Whereas the maximum amount of Master's fees has been R600 for many years, the current formula is as
follows:
Estates with a value of lower than R250 000 No Master's fees are payable
Estates between R250 000 and R400 000 R600 Master's fees are payable
Estates above R400 000 R600 plus an amount of R200 for every completed R200 000 in the
estate up to a maximum value of R7 000
Since the gross value of the estate is known when the account is drawn up, the executor makes provision for
Master's fees in the account. No voucher is required. The Master issues an assessment and the executor pays the
amount due to SARS (at any one of the commercial banks) with the correct reference number, of course. This
payment can also be made electronically .
(iii) Executor's remuneration The executor is entitled to remuneration for the work involved in winding up the
estate. The will may stipulate the executor's remuneration. If no stipulations exist or if the estate is distributed
intestate, the executor's remuneration is calculated according to a prescribed tariff and assessed by the Master.
The tariff is laid down in regulation 7 and amounts to a [Page 84(1)] maximum of 3,5% of the gross value of the
assets, subject to a minimum remuneration of R350. If the executor feels that the prescribed amount is insufficient
in a specific case (due to the fact that the administration of that specific estate required more input from him as
executor than is warranted by the fee, which could often be the case in the very small estates), he is entitled to
apply to the Master to increase his remuneration. On the other hand, the Master is also entitled to reduce an
executor's remuneration if he believes that the remuneration, even calculated according to the fixed tariff, is
excessively high in view of the volume of work involved and other factors, such as the way in which the windingup
process was handled. Assume the deceased's only asset is an investment of R10 million with a financial institution
and he stipulates in his will that his assets must pass to his only son. In reality, all the executor has to do is to have
the investment transferred into the name of the heir. According to the fixed tariff he would be entitled to R350 000
for this task. In such a case, the Master is most likely to reduce the remuneration.
The following should be noted in this respect:
(a) The payment of executor's fees is normally one of the last actions in the administration process of an estate.
The Master may, however, by way of exception and for sound reasons, agree that the executor receive his
remuneration at an earlier stage.
[Page 85]
(b) In the past, professional fees in addition to executor's remuneration were not allowed. An amendment to
section 39 of the Administration of Estates Act stipulates that an executor of an estate, who is at the same
time a practising conveyancer, is entitled to remuneration for any conveyancing required in the estate. If the
attorney acts as the executor's agent, he was and still is entitled to remuneration for conveyancing costs.
(c) The executor's remuneration is allinclusive, and additional fees may not be charged for consultations or any
other tasks performed in the administration of the estate.
(d) If an executor fails to perform his duties regarding the estate, or performs them in an unsatisfactory way, the
Master has the authority to withhold his executor's remuneration in total or in part.
(e) If the executor appoints an agent to administer the estate on his behalf, this does not entail additional costs.
The executor must pay the agent from his own remuneration; he may not lodge a claim for agent's fees
against the estate. If the executor requires specialised professional services, for example an auditor to draw
up financial statements, this would be recognised as a claim against the estate. VAT can only be claimed on
the executor's fee if the executor is a registered VAT vendor in terms of the VAT Act. If the executor, who is
not a registered VAT vendor (eg the surviving spouse) appoints a registered VAT vendor (eg a bank or an
attorneys' firm) to administer the estate on his/her behalf, such agent will not be entitled to claim VAT on the
executor's fee out of the estate. The fees so earned by the VAT vendor will, however, attract VAT and
therefore the bank/attorney will be obliged to pay over VAT to SARS, but will not be entitled to claim it from
the estate.
(f) The executor's remuneration, as approved by the Master, is an administration charge.
(g) If the executor also happens to be a creditor of the estate in his personal capacity, it means that he is to be
the judge in determining whether his claim should be allowed or not.
In Grobbelaar v Grobbelaar 1959 (4) SA 719 (A) the Appellate Division had to deal with an application to remove
an executor where the executor filed a disputed claim against the estate. The court ordered the removal of
the executor. This does not mean that an executor should necessarily be removed in all similar instances, but
an executor who claims as creditor against the estate in his personal capacity must prove his claim on a
balance of probability. A claim for maintenance by a surviving spouse, who is also the executor of the estate,
is a good example of a claim which should not be disputed especially where there is actuarial proof of the
amount so claimed.
When the account is lying open for inspection, there will be enough time for involved parties to dispute the
claim.
[Page 86]
(iv) Appraisement costs The account rendered by an appraiser for an appraisement of estate assets is a liability
against the estate and is entered as follows:
Example
Appraisement costs J Adams (12) R4 500
Appraisement costs P Herman (13) R3 500 R8 000

The accounts rendered serve as vouchers. In terms of section 6(5) of the Administration of Estates Act, every
appraiser is entitled to a reasonable remuneration for every appraisement he undertakes, calculated according to a
prescribed tariff of fees. Only when there is a dispute about the accuracy of the account will he submit an account to
the Master for assessment.
(v) Transfer costs of fixed property to a beneficiary Where an heir inherits fixed property from an estate, it
must be transferred to him from the estate in terms of the provisions of the Deeds Registries Act, which transfer is
effected in the relevant Deeds Office (normally where the property is situated) and in accordance with the relevant
Deeds Office practice and tariffs. Provision for these costs is made beforehand by drawing up an account according
to the prescribed tariff, by having it certified as correct by a conveyancer, and showing the amount of the account
as a liability.
The conveyancer must certify that the account has been drawn up in accordance with the provisions of regulation
85 of the Deeds Registries Act. Since an executor is obliged to transfer to an heir only at the expense of the estate,
transfer costs in respect of other persons (for example in terms of a donation or in the case of a section 38 take
over) are not allowed as a claim against the estate. The certified account serves as documentary proof.
Example
Provision for transfer costs for Erf 347 POTCHEFSTROOM to heir
M Jackson (14) R9 240
(vi) Bank charges Ledger fees debited by the bank to the bank account opened in terms of section 28 in the
name of the estate are also allowed as administration fees. The bank statement on which the entry appears serves
as documentary proof. Sometimes the executor pays over large amounts to heirs and then the banking charges
may be considerable. In that case, claim the full bank commission and keep a copy of the banking statement or a
certificate from the bank in respect of the commission as documentary proof.
It has become customary for estate administrators to claim an amount for postage and sundry costs as
administration costs. Since this practice, which has no legal or statutory basis, can easily get out of hand, the
Master has intervened and usually does not allow any additional charges (other than those set out above), except
with the Master's express written permission (which is normally quite difficult to obtain).
(vii) Funeral expenses These expenses are allowed as a claim against the estate and also fall under
administration costs. If funeral expenses are fully covered by a funeral policy, or paid for through the generosity of
the heirs, it is not necessary even to refer to them. The Master will most certainly not enquire [Page 87] who was
responsible for paying these expenses. If the cost of the funeral is excessive, the Master might disallow a portion of
the funeral expenses. If the cost of the funeral is only partially covered by the funeral policy, it is entered as follows:
Example
Account Sleepeasy Funeral Undertakers (15) R12 000
Less paid by funeral policy (16) R5 000
R7 000

or
Example
Account Sleepeasy Funeral Undertakers (17) R12 000
T he costs of a tombstone will be allowed as a claim against the estate, but again, the Master may raise an
objection if the amount claimed is deemed to be excessive.
8.3 Claims against the estate
All claims against the estate must be submitted to the executor. The period for submitting such claims is prescribed
by section 29 of the Administration of Estates Act. If a creditor fails to lodge his claim, his position is governed by
section 31, which reads as follows:
31. Late claims.If any person fails to lodge his claim against any deceased estate before the expiry of the period
specified in respect of that estate under subsection (1) of section 29, he shall
(a) if he lodges his claim thereafter and does not satisfy the Master that he has a reasonable excuse for the delay, be
liable for any costs payable out of the estate, in connection with the reframing of any account or otherwise, as a
result of the delay; and
(b) whether or not he lodges his claim thereafter, not be entitled in respect of his claim to demand restitution from any
other claimant of any moneys paid to such other claimant at any time or before he lodged his claim, as the case
may be, in pursuance of a valid claim against the estate.
It is important to note that the fact that a claim against a deceased estate is not lodged within the statutory period
of 30 days does not ipso facto or ipso jure render it inadmissible or invalid, provided that it is not prescribed in terms
of section 11 of the Prescription Act 68 of 1969. It is submitted that the following situations with regard to "late"
claims should be distinguished:
o The claim is lodged after the statutory period of thirty days but before the executor has drawn the liquidation
and distribution account. Even if the creditor cannot satisfy the Master that he has a reasonable excuse for
the delay as contemplated in section 31(a), he can obviously not be held responsible for any costs in
connection with the reframing of the account as such. The subsection does however allude to costs
"otherwise" than that connected with the reframing of the liquidation and distribution account, which may
entitle the executor to claim other "wasted costs" that he was obliged to incur pursuant to the claim and
which are payable out of the estate.
[Page 88]
o The claim is lodged after the liquidation and distribution account was drawn up and submitted to the Master
but before payment of the claims of other creditors and the distribution of the estate assets to the heirs and
legatees. In such event the creditor will be liable for the costs in connection with the reframing of the account
as well as the costs for readvertising the account for inspection, if applicable, together with any incidental
costs, if any, that the executor can prove that he was reasonably obliged to incur and pay out of the estate
as a result of the delay (see the reference to costs "otherwise" above).
o The claim is lodged after the liquidation and distribution account had been submitted to the Master, had lain
for inspection, the claims of creditors had been paid and all the distributable assets in the estate had been
handed over or paid out to the heirs and legatees, but the executor had not been officially discharged in
terms of section 56(1) of the Administration of Estates Act. Can the executor refute the claim on the basis that
the liquidation process had already been completed in terms of section 35 of the Act? Our courts have held
that the socalled plea of plene administrativit ("the administration is already completed") raised by an
executor under these circumstances is a foreign concept not well established or welldefined in South African
law and should accordingly not be recognised as a substantive defence available to a South African executor
(see the fullbench decision in Visser v Schmidt NO 2001 (3) SA 810 (T), followed in Tolstrup NO v Kwapa NO
2002 (2) SA 73 (W)). In the result, a creditor lodging a late claim under the above circumstances will be
entitled to participate in distribution of any further assets that may be discovered at a later stage. The full
bench of the Transvaal Court (as it then was) in Visser v Schmidt confirmed the correctness of and
consequently applied Estate Stanford v Kruger 1942 TPD 243 where it was held that a creditor cannot
participate in or lay claim to assets that had already been distributed. This implies that if there are still assets
in the "finalised" estate which for some reason have not yet been duly distributed to the beneficiaries, the
creditor will be entitled to share in the eventual distribution of such assets. It is important to note that the
creditor has no claim against creditors who had already been paid by the executor he may only claim against
heirs a n d legatees or against the executor in his official capacity. The executor could then still claim any
o v e r p a y m e n t s t o h e i r s a n d l e g a t e e s b y m e a n s o f a condictio indebiti ( s e e W o u t e r d e V o s
Verrykingsaanspreeklikheid 3rd edition, Juta and Company, 173 et seq.)
o The claim is lodged under the same circumstances as above, but the executor had been formally discharged
from his duties by the Master in terms of section 56(1) of the Act. The fact that the executor is functus officio
when the claim is lodged, does not affect the position of the creditor as set out above, but a new executor
must be appointed to deal with the distribution of further assets subsequently discovered or any other
undistributed assets.
Section 56(2) provides that no legal proceedings may be instituted against any person who has been discharged as
executor in terms of section 56(1) in respect of any claim against the deceased estate or any benefit out of the
estate. Section 56(2) does not, however, exempt an executor who had been discharged in terms of section 56(1)
from personal liability in respect of any fraudulent dealing in connection with the estate or the liquidation process.
[Page 89]
In view of the duty of an executor to properly examine the validity of all claims lodged against the estate, he
should always be mindful of the relevant provisions of the Prescription Act. An extract from the Act is included in the
legislation section of this work. Section 13(g) and 13(h) deals with the delaying of the completion of prescription of
the claims of creditors against the estate of a deceased debtor.
The executor must verify the claims and decide whether there is sufficient proof to acknowledge them. The
procedure for verifying claims was set out as follows in Wood v Estate Thompson 1949 (1) SA 607 (D) 614:
I am not aware of any rule of our law or of any practice of our Courts which requires that, merely because a claim is one
made against a deceased's estate, it must on that account be proved with a special degree of cogency, and I do not
believe that any such rule exists. If it did, it would no doubt work for the protection of estates of deceased persons
against fraudulent claims, but on the other hand, it might work considerable injustice against honest claimants against
such estates. It seems to me that such a principle, if it existed, would obviously cut both ways, and, on the whole, I do
not think the cases are really authority for more than the principle that the Court must examine with a very cautious eye
uncorroborated evidence given in such cases, but I do not appreciate that the Court should do more in that respect than
it is wont to do in all cases where interested evidence is given ex parte against someone who is not in a position to
answer it.
It appears therefore that proof of a claim should be sufficient to convince the executor, as a reasonable man, of its
validity. It is suggested that the executor should consult the nextofkin of the deceased to determine whether they
are aware of such a claim. Usually they are well informed about the deceased's activities. If the executor is
convinced that a claim is acceptable and no objection is lodged, the Master will rarely intervene.
If the claim is queried, the executor must act in terms of section 32 of the Administration of Estates Act, which
reads:
32. Disputed claims.(1) If an executor disputes any claim against the estate, he may, by notice in writing
(a) require the claimant to lodge, in support of his claim, within a period specified in the notice, an affidavit setting
forth such details of the claim as the executor may indicate in the notice; and
(b) with the consent of the Master, require the claimant or any other person who may in the opinion of the Master be
able to give material information in connection with the claim, to appear before the Master or any magistrate or
Master nominated by the Master, at a place and time stated in the notice, to be examined under oath in connection
with the claim.
(2) At an examination under paragraph (b) of subsection (1), the person concerned may be questioned by the
magistrate or Master before whom the examination takes place, and by the executor and any heir or the agent acting on
behalf of the executor or any heir.
(3) If any claimant fails without reasonable cause to comply with any notice under subsection (1), or having appeared
in answer to any such notice, refuses to take the oath or to submit to examination or to answer fully and satisfactorily
any lawful question put to him, his claim may be rejected by the executor.
(4) Any magistrate or Master before whom any such examination takes place shall take or cause to be taken a record
thereof and shall, at the request of the executor or of the claimant and at the expense of the estate, or of the claimant,
as the case may be, furnish the executor or claimant with a copy of such record.
[Page 810]
Should the executor decide that a claim is not justified, section 33 comes into play. The section reads as follows:
33. Rejected claims.
(1) If any executor rejects any claim against the estate, he shall forthwith notify the claimant in writing by registered
post and shall state in the notice his reasons for rejecting the claim.
(2) Any Court by which any claim against a deceased estate is adjudged in favour of a claimant may decline to grant
the claimant his costs against the estate if the Court is satisfied that the information given by the claimant to the executor
was insufficient or that the executor was justified in rejecting the claim under subsection (3) of section 32.
(i) Sundry creditors The name of the creditor and the amount of his claim with a brief reference to the nature of
the claim are entered in the account as follows:
Example
P Stevens, pharmacist, for medicine (18) R450
H Ivy, for money lent and advanced to deceased (19) R1 000
(ii) South African Revenue Service (SARS) The South African fiscal year extends from 1 March to 28 February
for individual taxpayers. Companies are free to determine their specific year end, which is not necessarily 28
February. If a person dies in the course of the fiscal year, for example on 15 June, it means that SARS will have a
claim against his estate for income tax due over the period 1 March to 15 June of the year of his demise. It is the
executor's duty to furnish SARS with a completed tax return for the relevant period to enable him to prepare a tax
assessment and lodge a claim against the estate. Any outstanding taxes in respect of previous tax years are
obviously also payable. If the executor is tardy in furnishing the tax return, SARS may issue an estimated
assessment, which is usually higher than an assessment based on a return. This would prejudice the estate and
ultimately the heirs as well.
The claim is entered in the account as follows:
Example
South African Revenue Service (Income tax payable i r o the
20XX tax year) (20) R1 330
If the deceased was not a registered taxpayer (eg if his salary or wage was lower than the prevailing threshold), or
if his income tax has already been paid for that year, a tax exemption certificate should be obtained from SARS and
the situation accounted for as follows:
Example
South African Revenue Service (Income tax payable i r o the 20XX tax year) (21) Nil
No amount appears in the money column.
(iii) Mortgage bonds on fixed property Fixed property in an estate is often bonded in favour of a financial
institution. In fact, in a typical estate of a typical man in the street who over time has acquired his own home, a first
mortgage bond in favour of some financial institution or another is usually the rule rather [Page 811] than the
exception. Such mortgage bond is a liability against the estate and is reflected in the liabilities section of the
account, with the following details:
(a) the name of the bondholder;
(b) the number of the title deed;
(c) the capital owing at the date of death;
(d) the interest due at the date of death.
The mortgage bond is entered in the estate account (under liabilities) as follows:
Example
Homebase Bank:
Amount due under bond 1246/2005
Capital R1 666 422
Interest at date of death (25) R1 122 R1 667 544

The supporting document is in the form of a certificate issued by the mortgagee reflecting the capital and interest at
the date of death, stating the number of the title deed and/or a description of the property to identify the mortgage
bond.
Financial institutions often make insurance a condition of granting mortgage bonds. In such a case redemption of
the mortgage bond debt occurs at the death of the mortgagor. In this case only the asset is reflected without any
contra liability.
(iv) Bank overdrafts Just as the man in the street referred to above is rarely able to purchase his own home
without the assistance of a financial institution, so he is often also dependent on the bank to make ends meet with
regard to everyday living expenses. The financial assistance he receives from the bank in this way naturally
materialises in an ordinary right to claim in favour of the latter, which forms a liability against the estate if any of his
bank accounts are overdrawn as at the date of his death.
The bank would have to submit a claim to the executor like any other creditor. For overdraft facilities, unless of
minimal value, most banks would require some form of security. The procedure followed in these cases is often that
the borrower cedes one or more life insurance policies to the bank. A bank may also take a covering bond over fixed
property as security for its claim or may have a policy ceded to the bank as security for the overdraft facility. The
executor should, therefore, always establish whether the bank where the deceased held his account holds any
security for overdraft facilities. In practice, the bank usually informs the executor of the nature and extent of the
security held for his claim when he lodges his claim against the estate.
The bank's claim for the amount due on the overdraft is accounted for in the estate account as follows:
Example
Nedbank Limited: overdraft on current account
Capital R3 500
Interest accrued up to date of death (26) R250 R3 750

[Page 812]
Interest accumulated from the date of death until the date of payment is accounted for in the income and
expenditure account, unless it was paid before the account was drawn. The supporting document is a balance
certificate from the bank, showing the following:
(a) capital outstanding at date of death;
(b) interest accumulated up to and including the date of death;
(c) any interest from the date of death until the date of payment.
8.4 Payment of claims by executor (section 35)
After the first and final Liquidation and Distribution account was advertised and it has been kept open for inspection
for the prescribed period of 30 days (at the Master's office and, if required, the magistrates' court in the district
where the deceased ordinarily resided as at the date of his or her death and no valid objections were received, the
executor may proceed with paying all creditors and other liabilities against the estate. Normally the executor
commences payment of liabilities as soon as he has sufficient cash available in the estate, even if the account has
not yet lain open for inspection. The court has on occasion found that an executor acting thus did not act irregularly
but that he nevertheless ran the risk of being held accountable for any damage suffered by anyone as a result of
an erroneous payment in this regard. However, the advantages of early payment exceed any possible
disadvantages, particularly if the executor has made very sure that the estate is solvent. In exceptional cases the
executor should not commence payments before he has made very sure that there are no problems, for example
the deceased may have signed surety for someone.
It is advisable, in the case of an attorney acting on behalf of an executor, that the attorney request the executor
to verify each account (or list of accounts) before payment. In this way he will ensure that accounts where any
uncertainty may exist are checked first, and that accounts that have already been paid are not paid again.
Nowadays most such requests are made electronically (by means of emails or SMS communication) and the
amounts are paid electronically rather than by means of a cheque. Such electronic payments should never be made
before the creditor has confirmed the amount outstanding (in writing) and the proof of payment should be
submitted to the Master. In such circumstances it would not be necessary to obtain a receipt from the creditor, as
proof of payment has already been secured.
Note that section 28 stipulates that all payments by cheque must comply with certain requirements. The cheque
must be drawn to order (i.e. no cash cheques are to be given to beneficiaries) and the reason for payment must be
stated on the cheque.
Chapter 9
Estate duty
9.1 Introduction
9.2 What constitutes an "estate" for purposes of estate duty?
9.3 Property of the deceased
9.3.1 Assets in the liquidation account
9.3.2 Fiduciary interests, usufructs and other similar interests vested in a
person immediately prior to his death
9.3.3 Meaning of "annual value of the right of enjoyment of the property"
9.3.4 Meaning of "at 12 percent over the expectation of life of such
person"
9.3.5 Annuities
9.4 Property deemed to be property of the deceased
9.4.1 Life insurance policies
9.4.2 Payments by a fund on or as a result of a member's death
9.4.3 Property donated by the deceased in terms of a donatio mortis causa
9.4.4 Property of which the deceased was competent to dispose of during
his lifetime
9.4.5 Claims for accrual in favour of a deceased estate in terms of the
Matrimonial Property Act 88 of 1984
9.4.6 Summary
9.5 Determining the net dutiable estate
9.5.1 The assets of the deceased accounted for in the liquidation account
9.5.2 Rebates
9.6 Rebates allowed for fiduciary, usufructuary and similar rights
9.7 Rebates in respect of life insurance policies and payments by a fund
9.7.2 Payments by a fund
9.8 The net dutiable estate and the dutiable amount
9.9 . . . . . .
9.10 Apportionment of estate duty between the estate and other parties
9.11 The section "estate duty" in the liquidation and distribution account
9.12 Completing and submitting revenue form 267
9.13 Some tips on estate duty
9.14 Capital gains tax and deceased estates
9.14.1 Introduction
9.14.2 What is a "capital gain"?
9.14.3 The rate at which capital gains tax is levied
9.14.4 The effect of capital gains tax upon deceased estates
9.14.5 Estate duty and capital gains tax
[Page 93]
9.1 Introduction
In terms of regulation 5(1)(h), promulgated under section 103 of the Administration of Estates Act 66 of 1965, the
liquidation and distribution account for a deceased estate must contain a subsection entitled "Estate duty". The
said regulation prescribes that calculations to determine whether estate duty is payable, and the amount of estate
duty payable, must be specified under this heading. A further requirement is that the apportionment of estate duty
in respect of persons liable for such duty in terms of the Estate Duty Act 45 of 1955 must be set out. The
deceased's estate may not be liable for the total amount of estate duty payable, since other persons may be liable
for the payment of a portion thereof. This aspect is briefly explained later in this chapter.
In practice, regulation 5(1)(h) means that every executor or administrator is duty bound to ascertain the position
regarding estate duty in the particular estate he is administering. His calculations in this respect form an integral
part of the first and final liquidation and distribution account which he must submit to the Master in terms of section
35(1) of the Administration of Estates Act. Apart from the regulation 5(1)(h) prescriptions, an executor of a
deceased estate is required also to render, in terms of section 7(1) of the Estate Duty Act, a return on the
prescribed revenue form 267, disclosing certain information about the deceased's property and the alleged dutiable
amount of the estate for purposes of estate duty.
It is clear, therefore, that anyone who accepts responsibility for the administration of a deceased estate should
have at least a rudimentary knowledge of estate duty in order to perform his function effectively. Estate duty
consists of a wealth of technical and finer details. Large estates with a wide variety of assets can become extremely
complex, so that specialised knowledge may be essential in order to address the problems that may arise. The
intention of this chapter is not to discuss all aspects of estate duty. The provisions of the Estate Duty Act, like those
of the Income Tax Act and most other fiscal measures, are designed to cover virtually any possible situation that
may be encountered. It is highly unlikely, though, that an administrator of deceased estates would be faced with
these complex situations in the normal course of events. If this does happen, however, there are several
specialised books to consult, or the assistance of a chartered accountant or estate duty expert may be enlisted.
Although estate duty is an interesting subject, highly specialised knowledge is not essential for the administration
of the kind of estates most administrators encounter in the normal course of their work. The information given
below includes only the most important steps in the administration of average estates.
The Estate Duty Act 45 of 1955 In South Africa, estate duty is levied in terms of the Estate Duty Act 45 of 1955,
as amended. This Act provides for the imposition of estate duty on the estate of every person who died on or after
1 April 1955.
The Estate Duty Act is administered by the Commissioner of the South African Revenue Service ("SARS"), whose
office is responsible for the collection of [Page 94] estate duty. To enable this Office to perform this function
efficiently, the Estate Duty Act has conferred wide powers thereon, particularly as far as control is concerned. They
carefully examine all returns submitted to them and keep an eye on the values allocated to estate assets. In this
respect section 5 of the Estate Duty Act is particularly important, since it describes how a deceased's property must
be valued for purposes of the Act and what monetary value must be attached to these assets. If SARS is not
satisfied with the value attached to a particular estate asset, they may increase the value to an amount they
consider realistic. If a liquidation and distribution account is submitted to the Master and it appears that the estate
planning the person undertook before his death is so complex and imaginative (with the obvious purpose of
evading or minimising estate tax) that disputes may arise concerning the alleged dutiable amount, the Master will
first submit the accounts to SARS for their comments before he finally examines it and allows the executor to lay the
liquidation and distribution account open for inspection in terms of section 35(5) of the Administration of Estates Act.
In terms of the Revenue Laws Amendment Act 46 of 1996, important measures were introduced to the Estate
Duty Act in order to strengthen SARS's hand towards more efficient administration of estate duty. Section 8bis of the
Act was substituted by sections 8A, 8B, 8C, 8D, and 8E which provides for the following:
o furnishing of information, documents or things by any person (section 8A);
o obtaining of information, documents or things at certain premises (section 8C);
o authorising the Commissioner for Inland Revenue or an appropriate officer to conduct an inquiry for purposes
of the Act (section 8D);
o search and seizure by an appropriate officer upon authority of a warrant issued by a judge pursuant to an ex
parte application by the Commissioner or the aforementioned officer (section 8E).
Section 28 of the Estate Duty Act is also amended to complement the powers of SARS towards more effective
implementation of its powers in terms of the Act.
The Taxation Laws Amendment Act 30 of 1998 empowers the Commissioner to publish the names and particulars
of persons who have been convicted of certain offences with regard to estate duty. These provisions are deemed to
have come into operation on 11 March 1998, with the result that it applies to everybody convicted of the relevant
offences on or after this date.
The executor of the estate is held accountable by the Administration of Estates Act for the submission of the
prescribed estate duty return referred to above, as well as for the payment of the estate duty assessment issued
to him in the name of the estate by SARS. The executor does not receive his discharge from the Master before
estate duty has been paid and he may not pay out inheritances or legacies to beneficiaries unless the estate duty
has been paid or guaranteed to the satisfaction of SARS.
If the Estate Duty Act is studied carefully, two things stand out: firstly the scope of the Act is so wide that
virtually every item of earthly goods (which is of commercial, rather than just sentimental value) that was
possessed by the deceased or in which he had an interest during his lifetime, comes into play for estate duty
purposes. [Page 95] This somewhat frightening state of affairs was achieved by the legislator by giving the
concepts "estate" and "property" a very broad meaning. These two concepts, as far as estate duty is concerned,
constitute much more than is normally understood by them. This aspect is explained in greater detail immediately
below. Secondly, the Act makes relatively generous allowances in the form of exclusion of certain assets for estate
duty purposes, reduction in the value of certain assets, and deductions. This aspect is also briefly discussed below.
It could be mentioned here that the Minister of Finance, Mr Pravin Gordhan, in one of his Budget Speeches
delivered in Parliament, reiterated that the Revenue Authorities are considering a major revamp of (and possibly the
abolishment of) Estate Duty. The following paragraph is included in the 2010 Budget Review, which review sets out
the details of the changes and amendments that might be expected in the next couple of years.
Taxes upon death
Both estate duty and capital gains tax are payable upon death, which is perceived as giving rise to double taxation. The
estate duty raises limited revenue and is cumbersome to administer. Moreover, its efficacy is questionable: many
wealthy individuals escape estate duty liability through trusts and other means. Taxes upon death will be reviewed.
Since the above statements were made, Judge Dennis Davis has been instructed to perform a complete review of
the legislation and other legislative provisions applicable to Estate Duty and other applicable taxes levied on
deceased estates. It seems unlikely that Estate Duty will be abolished any time soon. To sum up, one could say
that the underlying principle of the Estate Duty Act is the imposition of estate duty in respect of a deceased estate
and the collection thereof, in order to create a source of revenue for the state. However, it now seems as if the
Revenue Authorities are acutely aware of the fact that, due to sophisticated estate planning tools (available only to
the rich), the cost associated with collecting estate duty is disproportionately high when compared to the amount of
revenue collected for the fiscus. Section 2(1) of the Act stipulates:
There shall be charged, levied and collected in respect of the estate of every person who dies on or after the first day of
April, 1955, a duty to be known as an estate duty.
Section 2(2) further stipulates:
Estate duty shall be charged upon the dutiable amount of the estate calculated in accordance with the provisions of this
Act and shall be levied at the rate set out in the First Schedule.
9.2 What constitutes an "estate" for purposes of estate duty?
It was pointed out above that, for purposes of estate duty, the concept "estate" has a much wider meaning than is
normally understood by it. For that reason section 3(1) of the Estate Duty Act is of great importance to an
administrator of estates. An estate is described as follows:
For the purposes of this Act the estate of any person shall consist of all property of that person as at the date of his death
and of all property which in accordance with this Act is deemed to be property of that person at that date.
It appears, therefore, that an estate for purposes of the Estate Duty Act consists of two categories of property and
that the Act "extends" the ordinary concept "property" to include considerably more than merely the possessions of
the [Page 96] deceased. The word "property" referred to in section 3(1) is defined in section 3(2) as:
any right in or to property, movable or immovable, corporeal or incorporeal, and includes [own emphasis]
(a) any fiduciary, usufructuary or other like interest in property (including a right to an annuity charged upon
property) held by the deceased immediately prior to his death;
(b) any right to an annuity (other than a right to an annuity charged upon any property) enjoyed by the deceased
immediately prior to his death which accrued to some other person on the death of the deceased.
In terms of section 3(2)(c)(h) certain property of a deceased situate outside the Republic is excluded from the
definition of "property" and not included for purposes of estate duty. The subsections mentioned above also affect
persons who were not ordinarily resident in the Republic at the date of their death. It is stipulated that if a person
was not ordinarily resident in the Republic at the time of his death, the following would not form part of his dutiable
estate:
(i) any right in immovable property situate outside the Republic;
(ii) any right in movable property physically situate outside the Republic;
(iii) any debt not recoverable or right of action not enforceable in the courts of the Republic;
(iv) any goodwill, licence, patent, design, trade mark, copyright or other similar right not registered or enforceable
in the Republic or attaching to any trade, business or profession in the Republic;
(v) any stocks or shares held by the deceased in a company, provided any transfer whereby any change of
ownership in such stocks or shares is recorded is not required to be registered in the Republic;
(vi) any rights to any income or proceeds derived from any property referred to in (iii), (iv) and (v) above.
For persons who ordinarily resided in the Republic at the date of their death, estate duty is imposed on all their
property, wherever in the world it may be situate, and in the case of persons who normally resided outside the
Republic at the date of death, estate duty is imposed on all their property situate in the Republic.
The property referred to in section 3(1) as "property which is deemed to be property" and described in detail in
section 3(3), may be summed up as follows:
(i) the proceeds from all "domestic policies" on the life of the deceased, regardless of whether such proceeds
have been paid into the estate of the deceased or to another person;
(ii) payments as a result of the death of the person by a pension fund, retirement annuity or any other fund;
(iii) donations mortis causa made by the deceased;
(iv) any accrual claim acquired by the estate of the deceased in terms of section 3 of the Matrimonial Property Act
88 of 1984 against the deceased's spouse;
(v) any consideration paid or given by the deceased in any way in respect of shares allotted to him by any family
company;
[Page 97]
(vi) property of which the deceased was immediately prior to his death competent to dispose of for his own
benefit or for the benefit of his estate.
Benefits which are due and payable as a result of the membership of a pension or provident fund (or the like) are,
however, excluded from the definition of an "estate" in section 3(3)(i).
In summary it could be said that for purposes of the Estate Duty Act, an estate consists of two kinds of property.
One kind is the property of the deceased as defined in section 3(2) of the Estate Duty Act quoted above, which
simply means
(i) all the assets of the deceased accounted for in the liquidation account;
(ii) all fiduciary rights, usufructs and similar rights with which the person was vested before his death;
(iii) annuities which cease or pass to another person on the death of the deceased.
The second kind of property involves that property which, in terms of section 3(3) of the Estate Duty Act, is deemed
to be the property of the deceased on the basis of a legal fiction, and which was explained above in simple terms.
Collectively, these two categories or kinds of property are called the "dutiable estate" of the deceased and it is
clear from the discussion above that the dutiable estate is so broadly covered by the Estate Duty Act that it may
even include property which, strictly speaking, did not even belong to the deceased! This state of affairs, which to
the layman may appear to be some form of repression by the state of its subjects, is mitigated by several measures
which exclude certain property from the dutiable estate, or whereby the value of certain property is reduced, or
whereby certain deductions from the gross value of certain property are allowed. This means that the dutiable
estate referred to above is only the gross dutiable estate and that this gross dutiable estate can, by means of
allowable exclusions, reductions in value and deductions, be toned down to a net dutiable estate, in respect of
which a further considerable reduction is allowed in terms of section 4A of the Estate Duty Act. Estate duty in
respect of that balance, which is called the dutiable amount, is payable only if a balance remains (which only
happens in the case of aboveaverage estates). This dutiable amount is calculated according to a "reduction
process" with the gross dutiable estate as the point of departure. The exclusions, reductions and deductions
referred to above, as set out fully in section 4 of the Act, are set off against the gross dutiable estate in order to
arrive at the net dutiable estate. The latter is then further reduced by a rebate of R3 500 000 in terms of section 4A.
This reduction is a general reduction which is allowed for all deceased estates and the amount which remains (if
any) is the dutiable amount of the estate on which a fixed rate of 20 per cent is levied. If a reduction of R3 500 000
exceeds the net dutiable estate, no estate duty is payable. This is usually the case with an average estate which
estate administrators normally deal with. As from 1 March 2018, estates with a dutiable amount of more than
R30 000 000 (thirty million rand) attracts estate duty at an increased rate of 25%.
[Page 98]
Section 4A of the Estate Duty Act has recently been amended, with effect from 1 January 2010 and applies in
respect of the estate of a person who dies on or after that date; it now reads as follows:
"4A. Dutiable amount of an estate.(1) Subject to subsections (2) and (3), the dutiable amount of the estate of any
person shall be determined by deducting from the net value of that estate as determined in accordance with section 4, an
amount of R3,5 million.
(2) Where a person was the spouse at the time of death of one or more previously deceased persons, the dutiable
amount of the estate of that person shall be determined by deducting from the net value of that estate, as
determined in accordance with section 4, an amount equal to the amount specified in subsection (1)
(a) multiplied by two; and
(b) reduced by the amount deducted from the net value of the estate of any one of the previously deceased
persons in accordance with this section.
(3) Where a person was one of the spouses at the time of death of a previously deceased person, the dutiable amount
of the estate of that person shall be determined by deducting from the net value of that estate, as determined in
accordance with section 4, an amount equal to the sum of
(a) The amount specified in subsection (1); and
(b) The amount specified in subsection (1) divided by the number of spouses, reduced by the amount deducted,
in accordance with subsection (1), from the net value of the estate of the previously deceased person by
the number of spouses of that previously deceased person.
(4) The amount contemplated in subsection (2)(b) or (3)(b) shall not exceed the amount specified in subsection (1).
(5) Subsections (2) and (3) shall not apply unless the executor of the estate of that person submits, at the time and in
the manner and form prescribed by the Commissioner, to the Commissioner a copy of a return submitted to the
Commissioner in terms of section 7 in respect of the previously deceased person.
It is important to note that this portability of the unused portion of the first dying spouse's R3,5 million abatement
came into operation on 1 January 2010 and it provides further relief from the potential burden of estate duty. The
consequence of this is that the combined value of the estates of the two spouses need to exceed R7 million before
any estate duty would be payable. In practice, therefore only the large estates (currently those with a dutiable
amount of R7 million) will be subject to estate duty. For a practical example of how this is implemented by SARS,
please see Appendix A34.
We may now proceed with a more indepth analysis of the different categories of property referred to above.
Next we will discuss how the gross dutiable estate is composed, how the net dutiable estate is calculated, what the
reduction in terms of section 4A entail and how the estate duty addendum is finally presented in the Liquidation and
Distribution account in terms of regulation 5(1)(h).
[Page 99]
9.3 Property of the deceased
9.3.1 Assets in the liquidation account
The first component of "property" in terms of section 3(2) of the Estate Duty Act involves property, with which the
executor deals as estate assets, and which are therefore accounted for in the liquidation account. This is also
referred to as the deceased's "personal estate". The values attached to the assets in the account apply also when
calculating estate duty, except where SARS exercise the powers vested in them in terms of section 8 of the Estate
Duty Act and orders an adjustment if he is not satisfied with the value allocated.
If an asset is sold out of the estate while the liquidation of the estate is in progress, the amount it is sold for, in
other words the proceeds from the sale as reflected in the liquidation account, is the value for purposes of estate
duty. This rule does not apply, however, when shares in an unlisted company are sold. In such a case the market
value of the shares as determined by an independent appraiser (usually the company's auditor), is taken for
purposes of estate duty, and not the proceeds from the sale.
9.3.2 Fiduciary interests, usufructs and other similar interests vested in a person immediately prior to his
death
These limited (interim) interests also form part of the deceased's "property" in terms of section 3(2) of the Estate
Duty Act and include the rights of a fiduciary which arise from a fideicommissum mortis causa, usufructs, usus,
habitatio, grazing rights, as well as the vested interests of an income beneficiary under a trust which terminates at
the death of the income beneficiary. The words "held immediately prior to his death" are intended to mean up to
and including the date of death of the person. Consequently, if such a limited interest terminates before death, the
interest does not form part of the dutiable estate.
Section 5(1)(b) of the Estate Duty Act prescribes how a limited interest must be valued for purposes of estate
duty. The point of departure of the formula laid down in this subsection is that, although the right terminates at the
death of the person vested therewith (life interests such as these invariably cease at the death of the holder
thereof), the right to further enjoyment passes to somebody else. The right to enjoyment of a property encumbered
b y a fideicommissum passes to the fideicommissarius at the death of the fiduciarius, and similar interests of a
usufructuary at his death pass to the owner, who previously, being a nude owner, had to be content with only the
nuda proprietas of the res ususfructuaria. Keeping to the example of a usufruct, this means that the owner of the
property encumbered by the usufruct benefits as a result of the death of the usufructuary, since he now has the
right to enjoyment of the property for the rest of his life, unencumbered by the usufruct, which has fallen away. It is
the value of this benefit, which forms part of the deceased usufructuary's dutiable estate, that must be calculated
according to the formula laid down in section 5(1)(b)) of the Act.
[Page 910]
The section stipulates that the said value is determined by capitalising at 12 per cent the annual value of the
right to enjoyment of the property in which the deceased held the usufruct (or one of the said limited interests)
over the expectation of life of the person who became entitled to it in consequence of the death of the
usufructuary. If this person is to hold the right for a shorter period than his own life, it stands to reason that
capitalisation does not take place over his expectation of life but over such shorter period. When there is
uncertainty as to whom the interest must pass to at the death of the usufructuary (for example when the passing is
subject to some suspensive condition or another), a period of 50 years is taken for purposes of capitalisation. The
socalled "one year usufruct", which was used as a succession planning tool, has been done away with and cannot
be used anymore in the planning of an estate. The same applies where the successive beneficiary is not a natural
person but a body corporate. It must be emphasised that what is being valuated here is not the benefit which the
deceased enjoyed during his lifetime in respect of the property, but the benefit which accrues to someone else in
consequence of his death, a benefit which will therefore be enjoyed by that person henceforth. This principle is
important and must not be lost sight of. Before the practical application of the formula laid down by section 5(1)(b)
is illustrated by an example, some concepts used in the section by the legislator must be briefly explained.
9.3.3 Meaning of "annual value of the right of enjoyment of the property"
If someone is entitled to the right of enjoyment of a particular property, one would justifiably be inclined to base the
annual value of that right on the income which a person so entitled earns from the property during each year. It is
after all logical and selfevident.
However, if reliable and exact figures are not available at the death of the entitled person, it would be virtually
impossible to determine the exact annual amount of income he derived from the property. Obviously, he is no longer
there to supply the answers. As emphasised above, for purposes of estate duty, we are not interested in the
income derived from the property in the past in any event, since the future income accruing to the successive
beneficiary forms the basis of valuation. However, the problem lies in the fact that it is virtually impossible to say
beforehand exactly how much income the beneficiary would receive from the property each year and consequently a
valuation in this respect would inevitably be based on guesswork. The legislator solved this problem by simply
ordering an arbitrary fixed objective criterion in section 5(2), which states that the annual value of the right of
enjoyment of a property means an amount equal to 12 per cent upon the fair market value of the full ownership of
the property at the death of the entitled person. The legislator also made allowance for the possibility that the
property may not always yield an annual income return of 12 per cent of the fair market value. Consequently, a
proviso was added to section 5(2) allowing SARS to fix the annual return at such lower amount which they consider
to be reasonable in a particular case. SARS readily apply this proviso in practice and an estate administrator should
always, when it appears that a calculation of the annual value at a rate of 12 percent would be [Page 911]
unreasonably high and therefore unfair in a particular case, request SARS to exercise their discretionary powers in
terms of this subsection and to fix the annual value at a lower percentage. It is selfevident that the executor or
estate administrator would have to submit sufficient and authentic reasons to SARS in support of his application. For
example, where A enjoys a lifelong usufruct in respect of shares in a company and at A's death it is apparent that
the average annual dividend declared during the existence of the usufruct amounted to only 5,5 percent, SARS
would most probably be prepared to accept that percentage, or another adjusted figure considerably lower than 12
percent, as the annual value.
9.3.4 Meaning of "at 12 percent over the expectation of life of such person"
It should be clear at this point that the value of the benefit, which at cessation of the type of limited interest
applicable here and which passes to someone else at the death of the entitled person, is dutiable in the estate of
the firstmentioned: it forms part of his dutiable estate. For example, A holds a usufruct in respect of B's farm. A
dies and the benefit accrues to B in consequence of A's death. This benefit entails that B now has full use and
enjoyment of his farm for the rest of his life, something which he had to forgo during the life of the usufructuary A.
As in the case of the annual value of the right of enjoyment referred to above, a determination of this value which
passes to B for the rest of his life would also be based on guesswork, since noone knows how long B is going to
live his "expectation of life" mentioned in section 5(1)(b) is after all uncertain. Moreover, the legislator prescribes
that the annual value of the interest that passes to B over this expectation of life must be capitalised. In other
words, the total capital value of that which B will derive annually from the property for the rest of his life, must be
determined as at the date when he became entitled to the interest, that is, A's date of death. This adds a further
speculative element to the conundrum, since even if B's expectation of life at the death of A was known, we can
only guess what the eventual value of a particular capital sum, at current values, will ultimately be worth by the
time B dies, say in 30 years' time. Again, the legislator set an objective criterion in the form of "age factors",
contained in table A of the regulations promulgated in terms of section 29 of the Estate Duty Act. The age factor
indicated in this table for the different ages of males and females is a combination of the expectation of life of the
sexes at a particular age calculated by actuaries, and the current monetary value of R1 per annum for life,
capitalised at 12 percent over the term of the life expectancy of males and females of various ages.
The table mentioned above consists of three columns, divided as follows:
The first column, under the heading "Age", indicates age in years, beginning at nil and ending at 90 years.
The second column indicates the expectation of life for males and females corresponding with each age in the
first column.
The third column indicates the present value of R1 per annum for life, again for males and females separately.
[Page 912]
Data for males and females are indicated separately because the expectation of life differs for the two sexes
(typically women live longer than men and therefore the calculation differs).
All the principles described above may be illustrated with a simple example. Assume Mrs B has a usufruct for life
in terms of the will of her deceased spouse over a farm which has been bequeathed to her son in the same will. The
son was born on 12 July 1961. Mrs B dies on 1 April 1991 and consequently her usufruct over the farm terminates.
The value of the usufruct which terminates thus and passes to her son is "property" in terms of section 3(2) of the
Estate Duty Act and hence forms part of her dutiable estate. In terms of section 5(1)(b), the future value of the
usufruct which terminates, must be calculated by capitalising the annual value over the expectation of life of her son
A. In terms of the said subsection, the annual value of her right is equal to 12 percent of the value of the farm on
the date of her death on 1 April 1991. Thus the farm must be valued. Assume the valuation amounts to R5 000 000,
then the annual value of Mrs B's right is 12 percent of this amount, which is R6 000. This amount must now be
capitalised over the expectation of life of the son A, which is done by multiplying the amount of R600 000 by A's age
factor on his birthday following B's death. Since B died on 1 April 1991, A's next birthday is on 12 July 1991, when
he turns 30 years old. According to the table referred to above, the age factor of a 30yearold male person is
8,22694, being the present value of R1 per annum over the assumed duration of A's life. Thus: The capitalised value
of B's usufructuary right, which terminates and passes to A, is R600 000 × 8,22694 = R4 936 164,00. This amount is
considered "property" in B's gross dutiable estate in terms of section 3(2)(a) of the Estate Duty Act.
Cases may occur where capitalisation is not over A's assumed life span as illustrated above, but over the shorter
term mentioned in section 5(1)(b). The section provides that, if the beneficiary to whom the benefit passes in
consequence of the death of the entitled person will enjoy that benefit for a specific period only which is shorter
than his expectation of life, capitalisation must take place over such shorter period and not over his assumed
expectation of life. Such a case may be illustrated by slightly altering the facts in the example above. Assume the
testator did not bequeath the farm to his son A, but to his granddaughter C, subject to a usufruct for life in favour
of his spouse B, and at the death of B subject to a further usufruct in favour of son A until he reaches the age of 60.
A was born on 12 June 1952. His mother B dies on 1 April 1992. Consequently A's usufruct extends from 1 April
1992 to 12 June 2012, in other words over a period of twenty years, two months and some days. The right to the
usufruct which A receives at his mother's death will therefore be enjoyed by him for this period only and not over
the rest of his life. When the value of B's usufruct, which terminates at her death and passes to A, has to be
calculated for purposes of estate duty, it is not calculated over A's assumed expectation of life, but over the shorter
period of twenty years over which his usufruct extends.
In some cases, there are good reasons to make use of a "term usufruct". However, the whole concept of "term
usufructs", especially the socalled "one year usufruct" is treated with suspicion by SARS as it has been abused by
many estate planners merely for purposes of increasing the estate duty deduction [Page 913] (with no other
commercial reason). In the 2009 annual budget, the Minister paid specific attention to this estate planning tool.
Table B is used for this purpose, which, like table A, is contained in the regulations in terms of section 29 of the
Estate Duty Act. Whereas table A is used to calculate the present value of the relevant benefit in a case where the
beneficiary enjoys the benefit for life, table B is used to determine such value where the period of the beneficiary's
enjoyment extends over a fixed, specified or determinable period, for example a period of 15 years, until a certain
age is reached, and so forth. Since the assumed expectation of life does not play a role here, table B consists of
two columns only, namely a column for years and one for factors reflecting the present value of R1 per annum
capitalised at 12 percent for the fixed terms in the years column, which extend from one to 100 years. When using
this table, parts of a year are not taken into account. Applied to the facts above, the calculation of the value of B's
usufruct which passes to A will look like this
Example
Market value of farm at B's date of death on 1 April 1992 = R5 000 000
Annual value: 12% of R5 000 000 = R600 000
B's usufruct which terminates at her death, passes to A and extends
to age 60 years, i.e. from 1 April 1992 to 12 June 2012, being = 20 years
his 60th birthday (rounded off)
Factor for period of 20 years according to table B = 7,469 4
Thus: value of B's usufruct which passes to A,
is R600 000 × 7,469 4 = R4 481 640
The amount of R4 481 640 forms part of B's dutiable estate in terms of section 3(2) of the Estate Duty Act.
Regard should also be had to possible implications involving valueadded tax (VAT) if the particular farm is
subject to this form of tax.
Before continuing any further, attention must be drawn to three provisos to this subsection.
The first proviso makes provision for a concession in cases where a person purchases property subject to a
limited interest, for example a usufruct in favour of someone else, and the usufruct terminates at the death of the
usufructuary. As explained above, the owner of the property subject to the usufruct (the purchaser in this case)
benefits from the termination of the usufruct because he will now have the full right to enjoyment of his property
(the proprietas plena) for the rest of his life. The price the purchaser paid for the farm plus 6 percent interest may,
however, be deducted from the value of the usufruct in terms of the first proviso. The value of the usufruct must be
calculated according to the formula in terms of section 5(1). This reduced value is then reflected in the deceased
usufructuary's dutiable estate, and not the full value as per the formula.
[Page 914]
The practical effect of this first proviso may be illustrated with the following simple example. Assume A sells his
farm "The Willows" to B on 10 January 1980, but reserves usufruct for life over the farm for himself. A is therefore
actually selling only the bare ownership (nudum dominium) to B, who pays an amount of say R5 000 000. When A
dies on 14 January 1992, the calculations for purposes of his dutiable estate concerning the termination of the
usufruct are as follows:
Example
Assume value of The Willows at A's death is
(diminished, due to the amount of land R300 000
claims in the area)
B's age at his next birthday is 42 years
B's age factor according to table A is 7,978 44
Thus the capitalised value of the usufruct which

terminates is
R287 223,84

Less Purchase price paid by B 50 000,00
237 223,84
Less Compound interest on the purchase price @ 6%
per annum from 10 January 1980 to 14 January
1992 89 542,50
Value at termination of usufruct is R147 681,34

The intention with the second proviso is to prevent the nude owner of a farm to which a usufruct is attached in
favour of someone else from having to pay estate duty at termination of that usufruct at a usufructuary value which
is greater than the difference between the fair market value of the farm as at the time he obtained full ownership
thereof (in other words at termination of the usufruct), and the value of the nude ownership at the time he
obtained the nude ownership when the usufruct was created. Thus, where A, to keep to the example of a usufruct,
bequeaths his farm in his will to B, subject to a usufruct for life in favour of C, A has full ownership (proprietas plena)
of the farm, and at his death the farm is taken up in his dutiable estate at a specified value. This means that estate
duty is calculated on his estate at the time of A's death on the value of his full ownership. When his will comes into
force at his death, this full ownership is divided into two components, namely nude ownership (nuda proprietas or
dominium minus plenum) on the one hand and the right of enjoyment (the usufruct or ususfructus) on the other
hand. The firstmentioned right passes, in terms of the relevant testamentary provision, to B as nude owner and in
the lastmentioned right to C as the usufructuary. At C's death after several years, the usufruct terminates and B
becomes full owner of the farm, the value of which has since increased considerably. The legislator does not want
the imposition of estate duty on an amount which may be more than the value which B has just received, namely
the difference between the present value of the full ownership of the farm, and the value of the nude ownership
which he received at A's death.
[Page 915]
The practical effect of this second proviso may be illustrated as follows
Example
A bequeaths his farm The Willows to his son B, subject to a usufruct for life in favour of
his wife W. At A's death on 1 October 1977 the farm is valued at R200 000. W was born
on 10 March 1930 and B on 18 February 1960. W dies on 2 July 1992 and on this date the
farm is valued at R300 000. The usufruct value, which passes to B (who was bare owner
up to this point) at W's death, is calculated as follows
W died on 2 July 1992
B was born on 18 February 1960
Thus B's age on his next birthday after W's death: 33 years
The value of the usufruct at W's death when the farm was valued at
R300 000, is thus: R36 000 x 8,18836 = R294 780,96
To check whether the second proviso is applicable to section 5(1)(b) of the Estate Duty Act, the value of the nude
ownership (bare dominium) at the time the usufruct was established (that is, at A's death on 1 October 1977) is
calculated
Verification
A died on 1 October 1977
W was born on 10 March 1930
Thus W's age on her next birthday after A's death: 48 years
The value of the usufruct vested in W at A's death on 1 October 1977 when the farm was
valued at R200 000 is thus:
R24 x 8,000 26 = R192 006,24
Value of the bare dominium accruing to B is thus 7 993,76
R200 000,00
Value of The Willows at A's death R300 000,00
Less Bare dominium as calculated 7 993,76
Thus value at termination of usufruct is R292 006,24

In accordance with the second proviso to section 5(1)(b), the amount of R292 006,24 will be taken up in C's dutiable
estate under section 3(2) of the Estate Duty Act and not the greater amount of R294 780,96. In cases where a
usufruct or similar right to property terminates and full ownership to that property passes to someone else while
the property has increased in value in the interim, it is essential that every executor or estate administrator should
always do the verification calculation as illustrated above to ascertain whether the second proviso is perhaps
applicable to the particular case. If this is not done, the deceased's dutiable estate may be larger than it should be,
and this may result in the payment of unnecessary estate duty. It is important to note that the second proviso is
applicable only to usufructs and similar interests. It does not apply to fiduciary rights vested in the deceased,
since in the case of fiduciary rights there can be no question of nude ownership.
The third proviso to section 5(1)(b) makes provision for a case where such limited or interim right is terminated,
but it is impossible at that stage to establish [Page 916] the person or persons, or some of the persons, to whom
the right must pass. It may be that he or they are not yet born (in other words not yet in esse). In such a case it
would be impossible to calculate the right that terminates in the "customary" manner as explained earlier in this
chapter, since the dates of birth, and therefore the expectation of life of those to whom the right must pass, are
unknown. The third proviso therefore stipulates that capitalisation of the annual value of the right concerned must
be over 50 years, unless the executor of the estate and SARS agree to such shorter period as may be reasonable
under the particular circumstances. Table B is used in this case to determine the value.
9.3.5 Annuities
The third category of property which forms part of the dutiable amount of an estate in terms of section 3(2) of the
Estate Duty Act is annuities. The section provides for two kinds of annuity, namely any right to an annuity charged
upon property held by the deceased immediately prior to his death (section 3(2)(a), and any right to an annuity
(except a right to an annuity charged upon any property) enjoyed by the deceased immediately prior to his death
and which accrued to some other person at the death of the deceased (section 3(2)(b)).
Unfortunately, "annuity" is not defined in the Estate Duty Act but, according to Meyerowitz (6th edition The
Taxpayer CC Cape Town (1989)) 27.7, an annuity may be identified by the following characteristics:
(i) It is a fixed annual payment, even when divided into instalments;
(ii) It is recurrent, in other words, it is payable annually for a period of more than one year;
(iii) It is obligatory and chargeable against property or is an obligation upon a person it is therefore never
merely a voluntary or arbitrary payment.
The two kinds of annuity provided for by sections 3(2)(a) and 3(2)(b) respectively differ in that one places an
obligation on the person who is liable for payment (it does not matter where he obtains the money to meet his
obligation), while the other one, the one charged upon property, has to be deducted from that property or from a
fund to meet the obligation to pay. The purpose of an annuity is to provide a beneficiary with a fixed regular income
and any of the two kinds of annuity may be used. They should always be clearly differentiated for purposes of
estate duty, however, since the consequences are different for each.
(i) Annuities charged upon property (section 3(2)(a)) For purposes of estate duty, this kind of annuity is

classified, together with fiduciary rights, usufructs and other similar rights to property, as property of the deceased.
There are several ways of creating such an annuity in practice, but it is always characterised by a liability on a
particular property. For example, a testator bequeaths a block of flats or a business centre to his son and connects
this benefit with an obligation on the part of the son to pay a certain amount out of the rental income from the
building to his mother annually for the duration of her life so that she is taken care of financially. This kind of annuity
may also be created when a testator bequeaths a large capital sum to his son on condition that he puts it on fixed
[Page 917] deposit at a financial institution and that he pays an annual amount of R10 000 from the interest to his
retarded sister as long as she lives, before putting the rest of the interest earned in his own pocket. A testator may
also provide for the continuation of the annuity when the first beneficiary dies, so that it is paid to someone else
until he or she dies. An annuity is also created when a testator sets up a trust in his will and orders his trustee to
pay annuities from the income of the trust assets or the trust fund to nominated persons. It is essential to
emphasise again that this kind of annuity is always a liability against a particular property or against a
particular capital fund: if that is not the case, we are dealing with another kind of annuity.
Where a person receives an annuity in terms of section 3(2)(a) and dies, the value of the annuity which ceases
after his death or must be paid to someone else and consequently passes to the latter, is part of such deceased's
dutiable estate, being property in terms of section 3(2). The value for estate duty purposes is calculated by
capitalising the value of the annuity (that is, the amount which was payable annually) at 12 per cent over the
expectation of life of the beneficiary. The beneficiary is the person who benefits from the cessation of the annuity or
from the passing of the annuity at the death of the person who received it up to that point. This means that the
beneficiary could be one of two people, depending on whether or not the annuity continues. The son in the example
above, who has to pay his mother an annuity from the rental income from his block of flats, would be the beneficiary
himself when his mother dies, because his obligation ends and he is no longer obliged to pay anyone. He may now
put the annuity which his mother had to receive during her lifetime in his own pocket, together with the rest of his
rental income, because his property is now exempt from the annuity obligation. However, when an annuity does not
end at the death of the person entitled to it, but must be paid to someone else, this other person becomes the
beneficiary, being the person who benefits from the cessation of the deceased's right to the annuity. The fact that
the beneficiary, at the death of a person who received an annuity, is either the owner of the encumbered property
or the consecutive receiver of the annuity, is obviously important as far as the calculation of the value of the annuity
according to the formula mentioned above is concerned. In each case it must be clear over whose life expectancy
capitalisation must occur.
The calculation process itself is similar to the process described for fiduciary rights or usufructs. Table A is used
when the annuity is payable over the expectation of life of the beneficiary. When the annuity is payable over a fixed
period only, for example for ten years or until the beneficiary has reached a specified age, table B is used as
illustrated above for fiduciary rights, usufructs and similar interests. When calculating the value of an annuity, it is
obviously not necessary first to calculate the annual value as in the case of other limited rights to property, since
such value is already known, being a specified amount. For the sake of absolute clarity, calculation of the present
value of an annuity for the duration of a beneficiary's life (table A), and for a specified period (table B), are
illustrated separately and the relevant principles briefly repeated.
(a) A testator bequeaths an amount of R50 000 to his son A, stipulating that the money must be invested and
that A must pay his mother B an annual amount [Page 918] of R1 000 out of the interest for as long as she
lives. The testator further stipulates that, at the death of B, his daughter C must receive the said annuity of
R1 000 for the rest of her life. After B has received the annuity for a number of years, she dies and her
daughter C, who is 38 years and seven months at that stage, becomes entitled to the annuity. The right to
the annuity that accrues to C, is B's property in terms of section 3(2)(a) of the Estate Duty Act and forms part
of B's dutiable estate. This right is valued for purposes of estate duty by capitalising the annual value at 12
per cent over the expectation of life of C, as this is the period over which C will receive the annuity. The
calculation looks like this
Example
Annual value of B's annuity, that is the amount she received

annually in terms of the testator's instruction = R1 000,00
C's age on her next birthday following the date on which her

right to receive the annuity further was vested = 39 years
Age factor of a female person of 39 years according to table A = 8,19866
Thus the value of the right to the annuity is: R1 000 × 8,19866 = R8 198,66
(b) Assume, however, that the testator in the example above instructed that C must receive the annuity only for
a period of ten years after her mother's death. In that case the calculation is as follows
Example
Annual value of B's annuity = R1 000,00
Factor for period of 10 years according to table B = 5,6502
Thus the value of the right to annuity is: R1 000 x 5,6502 = R5 650,20
(ii) Other annuities (section 3(2)(b)) In contrast to the case where an annuity is charged upon property and
the property is therefore encumbered with it, an annuity may also be phrased in such a way as to place an
obligation on the person charged with the payment of the annuity. A testator may, for example, bequeath his farm
to his son and instruct him to pay a specific annual amount to his mother, brother or sister. As in the case of an
annuity charged upon property, the testator may also place a personal obligation on someone by instructing that
the annuity be paid to someone else at the death of the receiver (the first annuitant).
Apart from a testamentary bequest, this kind of annuity may also take the form of a retirement annuity, which is
purchased from an insurance company and by means of which the insured makes provision for his retirement. A
retirement annuity policy must not be confused with membership of a pension fund a pension fund falls under the
provisions of section 3(3) of the Estate Duty Act and is discussed below.
[Page 919]
We mentioned above that annuities upon which property is charged (section 3(2)(a)) and annuities which place a
personal liability on the payer (section 3(2)(b)), must be clearly distinguished, since the consequences regarding
estate duty differ for each. In contrast to the firstmentioned kind of annuity, the value of the right to the last
mentioned does not form part of the receiver's dutiable estate when the annuity ceases at the death of the
receiver. There are two requirements for determining whether the right to an annuity not charged upon property,
but which places a personal liability on the payer of the annuity, is the deceased's "property" for purposes of
section 3(2) of the Estate Duty Act. Firstly the person must have held the right to the annuity immediately prior to
his death, and secondly the right to receive the annuity further must have passed to someone else in consequence
of his death. If one of these requirements are absent, the right to the annuity is not the property of the deceased
in terms of section 3(2) of the Estate Duty Act. However, when the right to the annuity passes to someone else
after the death of the receiver, the value of the right does form part of the deceased's dutiable estate, and for
purposes of estate duty it is valued in the same manner as set out above for the other kind of annuity.
Before we end our discussion on annuities, it is necessary to point out that annuities paid out by a pension fund
or a retirement annuity fund as defined in section 1 of the Income Tax Act 58 of 1962 d o not form part of a
deceased's dutiable estate. This matter is discussed below.
9.4 Property deemed to be property of the deceased
Section 3(3) of the Estate Duty Act may be seen as a deeming provision in that it prescribes that certain items are
deemed to be property of a deceased, whereas according to the strict rules of jurisprudence this cannot be so. We
are in fact dealing with a legal fiction in order to avoid thwarting the intention of the legislator. The discussion below
centres on this kind of property.
A person who takes out a policy on his own life may make various arrangements concerning the proceeds of such a
policy. For example, when he takes out the policy, he may designate someone as a beneficiary, such as his wife or
one of his children, in the policy contract. When he dies the proceeds of the policy are paid out directly to such
beneficiary. The proceeds of the policy are consequently not reflected as an asset in the liquidation and distribution
account. If, however, the insured himself is the "beneficiary" in that he takes out the policy in his own name without
designating a beneficiary, the proceeds from the policy at his death are paid out to his executor. The executor must
account for these proceeds as if it forms part of the corpus of the deceased estate and consequently treats it as an
asset in the liquidation and distribution account. A policy may also [Page 920] be ceded to someone else, for
example when a person obtains overdraft facilities from a commercial bank and then cedes one or more of his life
policies to the bank in securitatem debiti.
The general rule is that the proceeds of all domestic life policies form part of the policy holder's dutiable estate,
irrespective of whether the proceeds are paid into his estate or to someone else as a beneficiary or as a person
entitled to the proceeds (for example, in the case of a cession). It is property which at his death is deemed to be his
property. The concept "domestic policy" may, in broad terms, be described as a policy of which the proceeds are
payable within the Republic and in South African currency.
There are two exceptions to the general rule. The full proceeds of policies paid out to a spouse or a child in terms
of a registered antenuptial contract, as well as the proceeds of a socalled keyman policy, do not form part of the
deceased's dutiable estate and are not subject to estate duty. A keyman policy is often used in the business world
where a business enterprise insures the life of a person who performs valuable and specialised work in its service.
He is a key man in the enterprise or industry concerned, hence "keyman policy". A businessman in partnership with
someone else may insure the life of his partner, so that at the partner's death a cash sum will be available to take
over his share in the partnership and to pay out the widow. With such a policy, the partner whose life is insured, is
the insured life, and the partner who takes out the insurance, is the beneficiary in terms of the policy contract. In
the Revenue Laws Amendment Act 92 of 1983 the situation regarding life policies which business partners take out
on each other's lives was placed on firmer ground by the addition of a new section 3(3)(a)(iA) to the Estate Duty
Act. This enactment means that the proceeds from a life policy taken out on the life of a deceased by someone else
who was a partner at the deceased's death, or who held shares or a member's interest in a company or a close
corporation in which the deceased also held a share or member's interest, will not form part of the deceased's
dutiable estate if SARS is satisfied that the policy was taken out with the sole purpose of obtaining the deceased's
interest in the partnership or his member's interest or his shareholding, as the case may be, as well as a claim by
the deceased against the company or close corporation (for example his loan account).
It is important to note that this kind of policy does not qualify for the exclusion from a dutiable estate if the
policy:
(i) was taken out by the deceased and ceded to another person afterwards;
(ii) remained in force after the partnership or joint shareholding or member's interest concerned stopped
functioning, while the person whose life was insured was still alive at that stage.
For a keyman policy to be considered for exclusion from the concept "property" for purposes of the Estate Duty Act,
insurance in general must meet three requirements.
(i) The person whose life was insured in terms of the policy must not have acquired it himself or have requested
the insurance;
[Page 921]
(ii) The person whose life was insured must not have been responsible for payment of the policy premiums, or
have been in any way liable for compensating the person who paid the premiums;
(iii) The insured's estate, any of his relatives or dependants or any company that may be regarded as a family
company in respect of the deceased, may not in any way benefit from the policy. The concepts "relatives" and
"family company" are defined in section 1 of the Estate Duty Act.
9.4.2 Payments by a fund on or as a result of a member's death
Section 3(2)(i) of the Estate Duty Act reads as follows:
"(2) Property... does not include
(i) so much of any benefit which is due and payable by, or in consequence of membership or past membership
of any pension fund, pension preservation fund, provident fund, provident preservation fund or retirement
annuity fund as defined in the Income Tax Act, 1962 (Act No. 58 of 1962), on or as the result of the death of
the deceased.
From the above, it is clear that such payments are excluded from the dutiable estate of the deceased.
9.4.3 Property donated by the deceased in terms of a donatio mortis causa
Property donated inter vivos is no longer deemed to be property of the donor for purposes of section 3(3) of the
Estate Duty Act if the donor died on or after 16 March 1988. From this date only mortis causa donations are deemed
part of a deceased donor's dutiable estate. For this reason it is important for purposes of estate duty to distinguish
between donations inter vivos and donations mortis causa. Both of these donations are made by means of an
agreement between the donor and the donee and it is not always clear which one you are dealing with. The
distinction lies mainly in the intention of the donor, so the intention of the donor must always be examined to
determine whether you are dealing with a donatio inter vivos or a donatio mortis causa. The latter is linked to the
death of the donor and his offer of a donation must comply with the formalities prescribed for a valid will. No
formalities are required for a donatio inter vivos, except that it must be in writing where delivery of the promised
donation has been deferred and does not occur at the time of the conclusion of the donation agreement. A donor
may recall a donatio mortis causa at any time before his death, whereas a donatio inter vivos cannot be recalled after
acceptance by the donee. On this basis it may be said that an important difference between the two forms of
donation also lies in the fact that the rights of the donee in the case of a donatio mortis causa are established only
at the death of the donor, whereas the donee's rights in the case of a donatio inter vivos are established at
acceptance of the promised benefit. Consequently, the intention of the donor, namely whether the donee must
receive a vested right before or after the death of the donor, must always be examined before it can be said with
any degree of certainty which [Page 922] one of the two kinds of donations applies in a particular case. In some
cases it may still be difficult to determine which of the two are being dealt with, for example when a person makes a
donation during his life with the intention that an ownership must pass to the donee, subject to a resolutive
condition that if the donor is still alive at a specified time or when a specified event takes place, the donation will fall
away. Where there is serious doubt about the actual intention of the donor, the courts are inclined to regard a
donation as inter vivos.
9.4.4 Property of which the deceased was competent to dispose of during his lifetime
The last category of property deemed to be property of a deceased in terms of section 3(3) involves property which
did not belong to the deceased, but which he was competent to dispose of immediately before his death, whether
for his own benefit or for the benefit of his estate. With this provision the legislator obviously intended to include
any property or transaction not already covered by a specific other prescription or section of the Estate Duty Act
and which is of such a nature that the legislator's objectives could be thwarted if that property or the proceeds of
that property is not included in the dutiable estate of a deceased. An example of a situation where this section may
be applicable is when, for example, a person had full control over the assets of a trust before his death, of which he
was a trust beneficiary and the only trustee, having wide powers in terms of the deed of trust to appropriate or
dispose of the trust assets, or where he held the controlling share in a company. If section 3(3)(d) is read with
section 3(5), one gains the unhappy impression that someone, somewhere may be in for an unpleasant surprise
concerning estate duty.
The section is not of any great importance for practical purposes of estate administration and should be
regarded as a somewhat vague and unfortunate provision in the Estate Duty Act. We will not attempt to analyse it
any further. Moreover, no reported case law seems to exist concerning the section. This section is, however, of the
utmost importance for estate planners, who should exercise great care not to create situations in their estate
planning schemes where SARS might invoke this section.
9.4.5 Claims for accrual in favour of a deceased estate in terms of the Matrimonial Property Act 88 of 1984
If a deceased was a married person and the marriage was subject to the accrual system in terms of chapter I of the
Matrimonial Property Act, the executor of the deceased estate must do the necessary calculations to determine
what the situation would be in terms of section 3(1) of the Act regarding claims for accrual between the deceased's
estate and the surviving spouse. Section 3(1) provides that when such a marriage is dissolved by the death of one
or both spouses, the spouse whose estate stante matrimonium showed no accrual or a smaller accrual than that of
the other spouse, has a right to a claim against the other spouse or his/her estate an amount equal to half of the
difference between the accrual of the [Page 923] estates of the respective spouses. If the estate of the deceased
shows no accrual, or a smaller accrual than that of his/her surviving spouse, the amount of the accrual claim in
favour of the deceased's estate is included in his/her dutiable estate as property deemed to be property in terms of
section 3(3) of the Estate Duty Act.
9.4.6 Summary
The gross dutiable estate of a deceased consists of different kinds of property as valued in accordance with the
provisions of section 5 of the Estate Duty Act, and, in terms of section 3(1), involves the following
o all property owned by the person at his death
o all property deemed to be property of the person at his death.
In terms of section 3(2) property of the deceased consists of
o the assets accounted for by the executor in the liquidation account, except the proceeds from life insurance
policies
o any fiduciary, usufructuary or similar interests
o certain annuities.
In terms of section 3(3), property deemed to be property of the deceased includes
o the proceeds of all insurance policies on the life of the deceased, irrespective of who received such proceeds
but with exclusion of policies of which the proceeds accrue to the spouse or a child of the deceased in
accordance with an antenuptial contract, as well as keyman policies and policies taken out by partners or co
shareholders with the sole purpose of acquiring a partner's or copartner's interest at the death of the latter
[Page 925]
o the value of all mortis causa donations
o property which did not actually belong to the deceased but which he was competent to dispose of for the
benefit of himself or of his estate immediately prior to his death.
As pointed out in the beginning of this chapter, the gross dutiable estate is eventually watered down to a net
dutiable estate as a result of certain accommodating measures. These measures occur in various forms, namely
through the exclusion of certain property, reduction in the value of certain property, and through specific
deductions. For purposes of the discussion that follows, these measures will be referred to simply as "rebates". The
net dutiable estate is determined by means of these rebates, for which provision is made mainly in section 4 of the
Estate Duty Act.
9.5 Determining the net dutiable estate
9.5.1 The assets of the deceased accounted for in the liquidation account
These assets are also called the deceased's "personal estate" and represent, as explained above, the gross value
of assets reflected in the liquidation account less the proceeds of any policy on the life of the deceased paid directly
into the estate and which the executor shows as an asset. Such policies are not taken into account here because
all life policies, whether paid to the estate or not, are not property in terms of section 3(2) but are property deemed
to be property in terms of section 3(3).
9.5.2 Rebates
Several rebates are allowed in respect of the gross personal estate, the most important being
(i) the value of an asset situate in a foreign country which the deceased acquired before he became ordinarily
resident in the Republic for the first time (section 4(e));
(ii) the value of an asset situate outside the Republic which the deceased acquired through an inheritance or
donation to him by a person (not a company) not ordinarily resident in the Republic (section 4(e));
(iii) property situate outside the Republic when it can be proved that the deceased acquired it out of the profits of
property mentioned in (i) and (ii) above (section 4(e));
(iv) the surviving spouse's half of the net joint estate where the deceased was married in community of property
and is survived by his/her spouse. Only the deceased's half of the joint estate after deduction of the debts
and other allowable claims are taken into account for purposes of estate duty.
[Page 926]
In this connection it is important to note the following
(a) When calculating the surviving spouse's half, the proceeds from life insurance policies paid to the estate
and therefore entered in the liquidation account are not taken into account, since all life policies
expressly fall under section 3(3) as property deemed to be property and therefore play no role where
property in terms of section 3(2) is involved, irrespective of whether the proceeds were paid to the
estate or not.
(b) Funeral expenses are calculated only against the deceased spouse's half of the joint estate when
determining the survivor's net half. Although all debts incurred stante matrimonium by the joint estate
and all administration costs are liabilities against the joint estate and therefore borne equally by both
spouses, funeral expenses are only a claim against the deceased spouse's half share of the joint
estate, since they were incurred after the community of property ended in consequence of the death of
the first dying.
(c) The fact that half of the net joint estate is excluded for purposes of estate duty, is not actually a rebate
in terms of the Estate Duty Act and is only dealt with here for the sake of completeness. It would in fact
be unnecessary to include a provision in the Estate Duty Act to this effect, since the Act in any case
provides that estate duty be imposed on the property of a deceased person, as well as property
deemed to be his property. In the case of a marriage in community of property, the joint estate belongs
to the two spouses in equal shares, so only half of it is the deceased's property. It is selfevident,
therefore, that the surviving spouse's half share in the joint estate cannot be subject to estate duty,
since it is not the deceased's property.
(v) Any income accruing to a person's deceased estate after his date of death, such as interest accumulated on
an investment from the date of death until it is realised by the executor, is not considered part of the dutiable
estate and is therefore excluded.
(vi) All reasonable funeral and deathbed expenses, administration costs and estate debts, as well as all
expenditure which the Master of the High Court allows, may be deducted from the gross dutiable estate
(section 4(a)(d)).
An interesting question is, under precisely what circumstances the liability of a deceased person who had
bound himself during his lifetime as surety and coprincipal debtor for the indebtedness of another, will
constitute an allowable deduction in terms of section 4(b). This section provides that all debts due by the
deceased to persons ordinarily resident within the Republic which are proved to the satisfaction of the
Commissioner have been discharged from property included in the estate may be deducted from the gross
dutiable estate. This question had to be dealt with by the Gauteng Income Tax Special Court (ITC 1773) within
the context of the following facts: The deceased had bound himself during his lifetime as surety and co
principal debtor to A in respect of amounts due to A [Page 927] by B. Certain life assurance policies had been
ceded to A in securitatem debiti and after his death the executor of the deceased estate instructed A to use
the proceeds of the policies to pay the amounts owing to A pursuant to the suretyship. The executor
deducted these amounts from the gross value of the estate, contending that it was a debt due by the
deceased as contemplated in section 4(b) and that since the right of recourse of the surety against B only
arose after the deceased's death, the right did not constitute an asset in his deceased estate.
The Special Court, upholding the disallowance of the deduction by SARS, found that the liability of the
deceased towards A was essentially based upon his suretyship and that such liability was subject to the
conditions precedent that the principal debt was indeed due and payable and that A as creditor elected to
claim the amounts due from the deceased estate (italics supplied).
In view of the fact that the executor effected payment of the debt owing by B to A mero motu and not
pursuant to a claim by A directly against the estate, the Special Court found that it could not be argued that
the payment had been in respect of a debt owed by the deceased within the contemplation of section 4(b).
This decision (reported in the South African Tax Cases Reports Vol 66 part 5) is discussed in Butterworths
LexisNexis Taxgram, July 2004.
(vii) Debts due by the deceased to persons ordinarily resident outside the Republic which have been discharged
from property included in the deceased's estate. SARS must be satisfied, however, that the amount of such a
"foreign debt" exceeds the value of any assets the deceased held outside the Republic not forming part of his
"South African estate" (section 4(f )).
(viii) The value of property accruing to a public benefit organisation ("PBO") as contemplated in section 30 of the
Income tax Act 58 of 1962, or to entities that are exempted from tax is an allowable deduction in terms of
section 4(h) of the Estate Duty Act. According to the Taxation Laws Amendment Act 30 of 2002 the deduction
was only allowable pursuant to a testamentary bequest of property to a PBO or to the exempted entity in
question. In the result, donations mortis causa were seemingly excluded until the words "by way of bequest"
were scrapped from section 4(h), which means that the value of property thus donated also qualifies for this
deduction (see De Rebus January/February 2003).
A copy of section 30 of the Income Tax Act is included in the legislation section of this work and practitioners
would be well advised to study this section carefully, as it departs substantially from the previous
dispensation with regard to "charitable bequests".
(ix) An important rebate in respect of the value of property forming part of the deceased's estate is allowed in
terms of section 4(i ) of the Estate Duty Act. When an heir, who stands to inherit certain property in terms of
the will of a deceased person, effects improvements to such property at his own [Page 928] expense during
the deceased's lifetime and with the latter's consent, by which the value of the property is considerably
enhanced, such enhanced value may be deducted from the gross value of the property, provided the heir is
able to furnish acceptable proof of the improvements. For example, a farmer allows his son to start farming on
one of the farms he has bequeathed to him in his will. With his father's consent, the son gradually makes
improvements at his own expense and turns the farm into a thriving enterprise, with the result that it is worth
considerably more at the father's death than it would have been if the improvements had not been made. If
the son is able to furnish acceptable proof, the amount by which the value of the farm as a whole has
increased owing to the improvements, may be deducted for purposes of estate duty from the value of the
farm at the time of the deceased's death. Therefore, if for example the son spent R100 000 out of his own
pocket on improvements to the farm, and, at the death of the testator a sworn appraiser values the farm,
under section 5(g) of the Estate Duty Act, at R850 000, but indicates in his appraisal that he would have
valued the farm at R750 000 prior to the improvements as indicated to him by the son, the rebate will amount
to R100 000, being the amount by which the value of the farm increased as a result of the improvements
made by the son.
(x) If the deceased was a married person and his marriage was subject to the accrual system in terms of section
3 of the Matrimonial Property Act of 1984, precisely the same principles apply mutatis mutandis as explained
above in respect of an accrual claim between the deceased's estate and that of his surviving spouse. This
means that if, at the death of the deceased, the estate of the surviving spouse shows no or a smaller accrual
than that of the deceased, the amount of such claim is allowed as a deduction from the gross dutiable estate
of the deceased (section 4(1A)).
(xi) The value of certain books and objects of art that belonged to the deceased and which the deceased lent to
the state, a local authority, or certain other institutions for a period of at least 30 years in terms of a notarial
deed, is a deduction in terms of section 4(o) if the deceased died during the said period.
(xii) Section 4(p) provides for a deduction in respect of shares in an unlisted company in which the deceased was a
shareholder, or the value of a member's interest in a close corporation of which the deceased was a member
during his lifetime. If such shares were included in the deceased's estate as property, and were valued in
terms of the provisions of section 5(1)(f )bis of the Estate Duty Act without the value of property deemed as
property of the deceased in terms of section 3(3) being reduced by any of the deductions allowed by section
4, the value of the deemed property may be reduced pro tanto to the extent to which it is accounted for at the
valuation of the shares or a member's interest in a close corporation. Huxham and Haupt, in their very useful
annual notes on South African income tax (H & H Publications Roggebaai (1992)) 456, give a good example of
the practical application of section 4(p).
[Page 928(1)]
Example
A is awarded 51 shares in an unlisted company. The total capital issued after the award
of the shares is 100 shares of R1 each. A paid R50 051 for the shares. At the time of A's
death, the Company is worth R250 000 and R50 000 of this amount consists of the share
premium which A paid when awarded the shares.
The value that will be included in A's estate is:
Company shares: 51% × R250 000 = R127 500
Deemed property: = 50 000
= 177 500
Section 4(p) deduction: 51% × R50 000 = 25 500
Section 4(p) deduction: 51% × R50 000 = R152 000

(xiii) Section 4(q)
1. The value of any property in the deceased's estate accruing to his surviving spouse is allowed as a
deduction in terms of section 4(q). Such "accrual" to the surviving spouse may occur in various forms. It
includes the value of any inheritance or legacy which the deceased bequeathed to his spouse in terms
of his will, as well as any other benefit which may be defined as "property" in terms of the Estate Duty
Act. If for example the deceased took out a life insurance policy on his life, nominating the surviving
spouse as his beneficiary, the policy proceeds paid out to the spouse at the deceased's death qualifies
for a rebate in terms of section 4(q).
2. The term "spouse" is defined as follows in section 1 of the Estate Duty Act:
"spouse" in relation to any deceased person, includes a person who at the time of death of such deceased
person was the partner of such person
[Page 929]
(a) in a marriage (both samesex and heterosexual) or customary union recognised in terms of the laws of
the Republic;
(b) in a union recognised as a marriage in accordance with the tenets of any religion; or
(c) in a samesex or heterosexual union which the Commissioner is satisfied is intended to be permanent:
Provided that a marriage or union contemplated in paragraph (b) or (c) shall, in the absence of proof to the
contrary, be deemed to be a marriage or union without community of property.
The terms "customary law" and "customary marriage" are defined in section 1 of the Recognition of Customary
Marriages Act 120 of 1998. Section 2 of the Act provides for the recognition of customary marriages and
section 3 sets forth the requirements for validity of customary marriages.
The extended meaning ascribed to the concept "spouse" by the Estate Duty Act is obviously an embodiment
of the values enshrined in sections 9 and 15 of the Constitution. Meyerowitz is of the opinion that the
extended definition of "spouse" for purposes of section 4(q) of the Estate Duty Act has retrospective effect in
that it is deemed to have come into operation on 27 April 1994 (The Taxpayer May 2001 100 and January 2002
20). It is submitted that the learned author's reasons for saying so are sound. It is further submitted that the
extended definition of "spouse" places a professional responsibility upon an executor or administrator in an
estate of a deceased person who is survived by someone who may be a "spouse", to have due regard to the
nature and duration of the relationship between the deceased and such survivor, in order to determine
whether or not the estate would qualify for a section 4(q) deduction. The ratio decidendi of the decision in
Langemaat v Minister of Safety and Security and Others 1998 (3) SA 312 (T) provides a good example of the
approach of courts towards constitutional values with regard to, for instance, samesex relationships. This
approach may also be relevant for purposes of section 4(q).
3. It frequently occurs that a testator, after providing for legacies to specific beneficiaries, bequeaths the residue
of the estate to his surviving spouse, which bequest then qualifies for a deduction in terms of section 4(q).
According to the construction placed by the Commissioner for Inland Revenue upon the section since its
introduction by the Revenue Laws Amendment Act of 1985, the value of the deduction must, where the estate
in question is dutiable, be reduced by the amount of the estate duty for which the estate is liable. The latter
amount, however, cannot be calculated without determining the value of the residue, which value depends
upon the amount of estate duty payable. This "chicken and egg" situation was solved in practice by means of
an algebraic formula. The application of this formula, which is explained by Meyerowitz in previous editions of
his authoritative work on administration of estates and estate duty, reduced the deduction contemplated by
section 4(q) by increasing the "net value" of the estate by regarding the estate duty as a liability in the
process of determining the "net value". Although it was mooted shortly after the introduction of the section
that the legislature could not have intended such a result, and Meyerowitz himself eventually came to the
[Page 930] conclusion that there is no basis for such a practice in the Estate Duty Act (see par 30.5 of the
later editions of his work and especially his exposition in The Taxpayer January 2001 89), the formula was
applied by SARS until judicially challenged by the executor of the estate of the late WE Frith. The deceased,
after bequeathing certain legacies to various beneficiaries, which legacies totalled R2 989 000 (including
R25 000 bequeathed to a charity), left the residue of his estate to his surviving spouse. Whilst it was common
cause that the bequest of the residue qualified for a deduction in terms of section 4(q), the dispute between
the executor and the Commissioner involved the quantification of the deduction. The total value of the
property in the estate was R13 560 363,33 and the total liabilities, including administration costs, amounted
to R280 411,90. The executor contended that, upon a proper construction of section 4(q), the value of the
residue should be determined without reducing the value thereof by the amount of the liability for estate
duty. He therefore calculated the dutiable amount and the estate duty payable as follows:
Total assets R13 560 363,00
Less liabilities R280 412,00
R13 279 951,00
Less bequest to charity: section 4(h) R25 000,00
R13 254 951,00
Less bequest to surviving spouse: section 4(q) R10 290 951,00
R2 964 000,00
Less abatement in terms of section 4A R1 000 000,00
Dutiable amount therefore R1 964 000,00
Estate duty thereon at 25% (applicable rate at the time) R491 000,00
(Rate has since been reduced to 20% and the section 4A abatement
has since been increased to R3,5 million, so currently there would
have been no estate duty payable if the testator died on or after 1

January 2010. Also note that, with effect 1 March 2018, estates with
a dutiable amount of R30 million and higher, attract estate duty at
an increased rate of 25%)
The Commissioner disagreed and issued an estate duty assessment based upon the formula, in terms of
which the section 4(q) deduction was calculated as R9 636 248,00, resulting in a dutiable amount of
R2 618 666,00, on which estate duty of R654 666 was payable. The executor's formal objection to this
assessment was unsuccessful and he consequently appealed to the Special Tax Court, which found in his
favour (ITC 1681 62 SATC 365). The Commissioner appealed against this decision, which appeal led to the
landmark decision of the Supreme Court of Appeal in Commissioner, South African Revenue Service v Executor,
Frith's Estate 2001 (2) SA 261 (SCA). The case against the formula, brilliantly engineered by the executor, JW
Frith, the son of the deceased, was upheld in a majority decision of the Supreme Court of Appeal, with the
result that the formula and the resulting "tax on tax" situation was finally laid to rest. The gravamen of the
executor's attack on the formula was that the "step by step" method of computation in terms of the formula
increased the estate duty ultimately payable to an effective rate in excess of the promulgated rate provided
for in the Estate Duty Act (see articles by JW Frith in Accountancy SA September [Page 930(1)] 2001 3 et seq
and De Rebus September 2001 10 et seq). Although estate planning as such falls outside the scope of this
work, it should be noted that Frith undertook thorough and meaningful research on the "tax on tax" situation,
indicating that it not only affected deceased estates where a surviving spouse or a charity was the residuary
heir, but that it manifests itself in all deceased estates. Appropriate proactive planning therefore remains
essential in order to ensure that an estate is only taxed at the promulgated rate. It is accordingly submitted
that estate planners and drafters of wills should take due notice of Frith's views, which he expounds and
explains in his abovementioned articles.
The decision of the Supreme Court of Appeal in Estate Frith is discussed in Butterworths Taxgram March 2001
811, De Rebus March 2001 5758 and in TSAR 2001 4 819827.
4. In conclusion, the practical effect of the decision in Estate Frith for purposes of drafting an estate duty
addendum in a dutiable estate with a surviving spouse or a public benefit organisation as residuary heir, is
that the algebraic formula no longer applies and that the addendum must be drawn and the estate duty
calculated accordingly (section 265DF of the report). See also Annexure A23 in the relevant section of this
work.
5. The proviso to section 4(q) places two limitations on the rebate allowed:
(i) if the surviving spouse is required in terms of the deceased's will to dispose of an asset to any other
person or trust, the rebate is reduced by the value of such disposal; and
(ii) the value of property bequeathed by the deceased to a discretionary trust which he established for the
benefit of his surviving spouse is not allowed as a rebate.
These two provisos, which were added to the wording of the section in 1987, are intended to qualify the application
of a section 4(q) deduction where the testator uses a testamentary trust to provide for a surviving spouse instead
of a direct bequest, a situation seemingly not reckoned with by the legislature when section 4(q) was introduced
into the Estate Duty Act in 1985. The ratio behind the introduction of the provisos is neatly put in The Taxpayer
December 1989 at 231:
The first proviso was intended to prevent the situation where ostensibly the bequest or accrual is to the surviving spouse,
but the real destination of the bequest or accrual is to some other party such as the children.
The second proviso had the intent that the deduction should not be claimable where the right of the surviving spouse to
the bequest could be defeated through the exercise of the trustees' discretion.
The wording of both provisos created problems of construction, which are fully canvassed in The Taxpayer (supra).
See also Davis, Beneke and Jooste Estate Planning, Lexis Nexis Butterworths Durban par 2.5.16.
As far as the trustees' discretion as contemplated in the second proviso is concerned, it should be borne in mind
that discretionary powers may be twofold. Firstly, trustees may have an unfettered discretion to select income
beneficiaries from a class of persons designated by the testator, which may include the [Page 930(2)] latter's
surviving spouse. Secondly, the trustees may be obliged by the provisions of the trust deed to pay trust income
only to the surviving spouse to the exclusion of any other party, but may nevertheless have an unfettered
discretion to pay out or withhold such payments or to determine the extent thereof. In the first instance it is
obvious that no section 4(q) deduction will be allowed. The second instance is slightly more complex. Inexact
drafting of a trust clause such as "If my trustee at any time contemplates a distribution of the income of the trust,
such income shall only be payable to my wife X as income beneficiary" may lead to a disallowance of the deduction.
It is therefore submitted that, upon a proper construction of the second proviso, no section 4(q) deduction will be
allowable unless a surviving spouse nominated as income beneficiary has some vested interest in the trust income
that is capable of being valued according to section 5 of the Estate Duty Act. In the normal discretionary trusts,
however, beneficiaries do not acquire vested rights or interests in the trust property nor income. The important
question as to how such interest should be valued within the context of the provisions of section 5 presented itself
in Commissioner for the South African Revenue Service v Klosser's Estate 2000 (4) SA 993 (C), pursuant to an appeal
against a judgment of the Cape Income Tax Special Court. The facts were briefly that the deceased created a
testamentary trust and instructed his trustees to pay the net income from the trust assets to his wife until her
death. It was common cause between the parties that the bequest of the trust income constituted a benefit which
qualified for a deduction in terms of section 4(q), but the dispute turned on how this deduction should be valued.
The parties accepted the Special Court's reasoning that the benefit accruing to the surviving spouse did not
constitute a usufruct in the sense of a real right over the trust property, but a "usufructuarylike interest" as
contemplated in sections 3(2)(a), 5(1)(b) and 5(1)(f) of the Estate Duty Act. The executors of the estate calculated
the value of the deduction in terms of section 5(2) of the Act on the basis that the annual value of the surviving
spouse's right to the trust income amounts to 12% of the value of the trust capital. The Commissioner, whilst
accepting that section 5(2) was applicable, exercised his discretion in terms of the proviso to the section and
reduced the yield to 2,5 percent per annum on the basis that the property forming the subject of the surviving
spouse's interest (a large amount in shares and some cash) could not reasonably be expected to yield 12 per
percent annum. In the result, the value of the section 4(q) deduction was substantially reduced, with a concomitant
substantial increase in the estate duty payable. The Special Court ultimately found that neither section 5(1)(b) nor
section 5(1)(f) was applicable for purposes of evaluating the surviving spouse's entitlement and that her interest
fell to be valued in accordance with the provisions of section 5(1)(g) of the Estate Duty Act. This finding of the
Special Court is alluded to in 1000EH of the CPDreport and is based upon its decision that, firstly, the interest
under consideration had been created pursuant to the will of the deceased and therefore only came into existence
after his death, rendering section 5(1)(b) inapplicable. Secondly, because the matter under consideration was not
one where the bare dominium of any property formed part of the deceased estate, section 5(1)(f) did not apply
either. The Special Court seemingly indicated that because no real right in the form of a usufruct over the trust
capital was created [Page 930(3)] in favour of the surviving spouse and she could only exercise a personal right
against the trustees, there was no specific provision in the Estate Duty Act according to which such an interest
could be valued. It can consequently only fall within the ambit of section 5(1)(g) of the Act.
The finding of the Special Court was reversed by a full bench of the Cape Provincial Division of the High Court,
which found that what was to be valued was indeed a "usufructuarylike interest" of the surviving spouse that falls
within the ambit of section 5(1)(b) read with the first proviso to section 5(2) of the Estate Duty Act and that the
Special Court had erred in its finding that the value of the section 4(q) deduction should be determined according to
the provisions of section 5(g). In arriving at this decision, the court lent considerable weight to the decision of the
Appellate Division in Sekretaris van Binnelandse Inkomste v Boedel Snyman 1972 (1) SA 1 (A), where it was held that
the valuation contemplated in section 5(1)(b) and 5(1)(f) of the Act applies to the valuation of property included in a
deceased estate as well as the valuation of property for purposes of a section 4(q) deduction. It was further held
that the burden of proof to show what the annual yield of these assets would be had not been discharged by the
executors and that the Commissioner was entitled to use the historical yield of the shares and the cash as basis for
his evaluation.
9.6 Rebates allowed for fiduciary, usufructuary and similar rights
The rebates allowed for this kind of property are set out in sections 4(g), 4(j) and 4(m):
(i) If the deceased enjoyed a fiduciary, usufructuary or other similar right donated to him and which at his death
reverts to the person who donated it, the value of such a right is deductible in terms of section 4(g) from the
total value of all property which forms the deceased's dutiable estate in terms of section 3. An annuity
charged upon property which terminates at the death of a person, so that the owner of the property no
longer has to pay the annuity as a result of the death, is also allowed as a rebate in terms of this subsection.
(ii) If the person to whom the benefit accrues at the termination of the right concerned in consequence of the
death of the holder of the right, has with the consent of the latter made improvements to the property in
which the right was vested, the amount by which the value of such right increased owing to the
improvements is deductible as a rebate in terms of section 4(j). An example of the calculations where this
rebate features, appears in the addendum to the estate duty account of the estate in annexure A23.
(iii) Section 4(m) provides that the value of a usufruct or other similar right to property and of any right to an
annuity charged upon property created in a predeceased spouse's estate, must be excluded from the dutiable
estate [Page 930(4)] of the deceased. To qualify for this rebate in terms of section 4(m), three requirements
must be met, namely
(a) the usufruct or similar right must have been created by the deceased's predeceased spouse;
(b) the assets subject to the right concerned must have formed part of the predeceased spouse's estate;
and
(c) a r e b a t e i n t e r m s o f section 4(q) m u s t n o t h a v e b e e n a l l o w e d a t t h e d e a t h o f t h e d e c e a s e d ' s

predeceased spouse in respect of the usufruct, or other similar right or annuity in the dutiable estate of
the predeceased spouse. This third requirement, which was added to section 4(m) in 1987 should be
looked at more closely against the background of the rebate in terms of section 4(q), which commenced
in 1985 and is discussed above. Take the following example:
[Page 931]
Example
H bequeaths his farm to his son B, subject to a usufruct for life in favour of his spouse,
W. H dies on 10 June 1992 and the farm is valued at R800 000. W was born on 13 May
1928. The value of the usufruct accruing to W is calculated as follows:
Annual value: 12% of R800 000 = R96 000,00
W's age on next birthday = 65 years
Age factor of 65yearold female = 6,841 61
Section 4(p) deduction: 51% × R50 000 = 25 500
Thus value of usufruct accruing is:
6,84161 × R96 000 = R656 794,56
The application of section 4(m ) to the facts above if it were not for the provisions of section 4(q)
The value of the usufruct in favour of W as calculated above, forms part of her dutiable estate at W's death
because it is "property" in her estate in terms of section 3(2) of the Estate Duty Act. In terms of section 4(m)
the amount of R656 794,56, however, qualifies as a rebate in her estate because requirements (a) and (b)
above were met: the farm was the property of W's predeceased spouse and the usufruct was created by him
in his will.
How do the provisions of section 4(q) affect the situation?
The value of a bequest or accrual in favour of a surviving spouse is allowed in terms of section 4(q) a s a
deduction in the dutiable estate of a predeceased spouse. For purposes of estate duty, the value of the
usufruct in favour of W in the set of facts above could qualify twice for a rebate: first in H's dutiable estate in
terms of section 4(q), since as a bequest in terms of H's will, it accrues to the surviving spouse W, and then
again at the eventual death of W in terms of section 4(m) in W's dutiable estate, since it is the value of a
usufruct over her predeceased spouse's property which he created in her favour under his will. When the
legislator placed section 4(q) on the statute book, section 4(m) was initially left unchanged, with the result
that the impression was created that the legislator had in fact left room for a double rebate. On whether the
legislator had indeed overlooked the provisions of section 4(m) when he enacted section 4(q) can only be
surmised. It does appear as if he was rather remiss, as section 4(m) was only adjusted in 1987 by providing
that no rebate is allowable at the death of the predeceased spouse in terms of section 4(m) when a rebate
has already been allowed in terms of section 4(q).
Although there is no longer any doubt that section 4(q) and 4(m) cannot be used consecutively to effect a
rebate in the estates of both H and W in the example above, the question arises whether the two sections
cannot be used as alternatives. In other words: does H's executor at H's death have a [Page 932] discretion
to abandon the rebate in terms of section 4(q) so that the deduction in terms of section 4(m) is available at
the death of W? The estate duty situation at H's death on 10 June 1992 and the projected estate duty
situation at W's eventual death, say 15 years later, may be of such a nature that it would be more beneficial
to claim the section 4(m) r e b a t e a t h e r d e a t h a n d t o a b a n d o n t h e section 4(q) rebate at H's death.
Meyerowitz (supra paragraph 28.22) believes that where an accrual to a surviving spouse does in fact qualify
for a rebate in terms of section 4(q), the rebate at the death of the predeceased spouse must be claimed and
that there is no choice in this respect. He apparently bases his viewpoint on the intention of the legislator as
is evident from the wording of section 4(q). In principle his viewpoint appears to be correct, although the
wording of section 4(q) may leave room for doubt as to the precise application of the enactment in practice.
This element of doubt was the crisp question before the Income Tax Special Court in a recent appeal by an
executor of a deceased estate where a deduction in terms of section 4(q) was purposely not claimed in view
of the fact that the section 4(m) deduction upon the eventual death of the surviving spouse would be
substantially greater than the deduction in terms of section 4(q) which was allowable in the estate of the first
dying spouse. The dutiable estate of the first dying spouse was in any event not large enough to attract
estate duty and a formal claim for a section 4(q) deduction would have had no effect upon the nondutiable
status of the estate.
The Commissioner refused to allow the section 4(m) deduction claimed in the estate of the surviving spouse
and contended that, upon a proper construction of the Act, a section 4(q) deduction cannot be "skipped" for
purposes of a more beneficial deduction in terms of section 4(m) at the death of the surviving spouse. It was
submitted on behalf of the executor that as no deduction in terms of section 4(q) as contemplated in section
4(m)(ii) had been "allowed" (ie not claimed), there is nothing standing in the way of the deduction claimed in
casu. The court found in favour of the executor and stated that the wording of the Act may indeed create a
measure of uncertainty as to the precise intention of the legislature. The court also invoked the contra fiscum
rule in arriving at its final decision.
Any uncertainty regarding section 4(m) a n d 4 (q) was subsequently removed by section 14(1) o f t h e
Taxation Laws Amendment Act 30 of 1998 in terms of which section 4(m) has been amended. This amendment
is summarised as follows on page 7 of the 8th issue of the Butterworths Taxgram (August 1998):
In order to remove any uncertainty in this regard, section 4(m) is amended to provide that where a deduction in
terms of section 4(q) was allowable, whether or not such deduction was claimed or actually allowed for estate duty
purposes in the estate of the predeceased spouse, the section 4(m) deduction would not apply to the estate of the
surviving spouse.
Section 4(m) would therefore only apply in respect of an estate where such usufructuary or other like interest is
included in the estate of a person who acquired such usufructuary or like interest from a predeceased spouse who
died before section 4(q) came into operation.
[Page 933]
In all other instances the estate of the predeceased spouse would automatically qualify for the section 4(q)
deduction where such usufructuary or other interest accrues to the surviving spouse which would have the effect
that section 4(m) would not apply to the estate of such surviving spouse.
(iv) The first proviso to section 5(1)(b) of the Estate Duty Act provides for a rebate for purposes of estate duty
which is based on the same point of departure as the rebate in terms of section 4(j), as briefly discussed in (ii)
above.
(v) Section 20 of the Estate Duty Act confers authority upon an executor, who had to incur any expenditure in
respect of property subject to any of the limited interests under discussion here, to recover such expenditure
from the persons liable. It is not a rebate and is only mentioned here for the sake of completeness.
9.7 Rebates in respect of life insurance policies and payments by a fund
Apart from the total exclusion of certain policies referred to earlier, the gross value of the proceeds of all policies
may be reduced if the person entitled to the proceeds of the policy is able to prove that he paid the premiums, or
part of the premiums on the policy. In this respect the rebate amounts to the amount of the premiums thus paid,
together with interest calculated at 6% per annum from the date of each premium payment up to and including the
date of death of the policy holder.
9.7.2 Payments by a fund
If any fund makes a payment in consequence of a member's death and the beneficiary has paid any contributions or
considerations which can be proved to the satisfaction of the Commissioner for Inland Revenue, such payments,
together with interest calculated at 6% per annum from the date of payment of the consideration or contributions,
may be deducted from the proceeds of the fund for purposes of estate duty. The same kind of rebate granted for
insurance policies where the beneficiary contributed to the payment of premiums, is also allowed in respect of the
payment of premiums.
As far as payments by a fund are concerned, we must again refer to the provisions of the Revenue Laws
Amendment Act 102 of 1979. If the fund making the payment is a pension fund or retirement annuity fund as
defined in section 1 of the Income Tax Act 58 of 1962, only the lumpsum benefit paid is taken into consideration for
purposes of estate duty, while the periodic payments payable to the beneficiary by means of an annuity are not
taxable. All payments by another fund are taxable.
Section 3(3)(a)bis of the Estate Duty Act, which provides for the deductions from proceeds of a fund for estate
duty purposes as set out above, was amended by section 13 of the Taxation Laws Amendment Act 30 of 1998. The
purpose of the amendment is to cover the situation where a fund purchases a benefit from an [Page 934]
insurance company in the name of a retiring employee. The amended section now also refers to past membership of
any fund (italics supplied).
9.8 The net dutiable estate and the dutiable amount
The gross dutiable estate of a deceased consists of all his "property" as provided in section 3(2) and 3(3) of the
Estate Duty Act. When all the rebates as explained above have been accounted for against the gross estate value,
including the amount payable in respect of capital gains tax (if any), we refer to the net dutiable estate. Against
this net dutiable estate a "final" deduction is taken into consideration in terms of section 4A, which at present
amounts to R3 500 000 (three million five hundred thousand rand), as well as the "unused" portion of the
deceased's spouse who predeceased him/her (if applicable). If a balance remains after all these deductions, this
balance represents the dutiable amount on which estate duty is payable at a rate of 20%. If the rebate in terms of
section 4A exceeds the value of the net dutiable estate, no estate duty is payable. In the 2018 Budget Speech, the
then Minister of Finance, announced that estates with a dutiable amount of more than R30 000 000 (thirty million
rand), the applicable rate of estate duty will be 25%. This amendment was made effective from 1 March 2018.
9.9 . . . . . .
9.10 Apportionment of estate duty between the estate and other parties
At the beginning of this chapter it was pointed out that the amount of estate duty payable in a particular deceased
estate does not necessarily have to be borne by the deceased's estate. APJ Bouwer explains this in Die
Beredderingsproses van Bestorwe Boedels (1978) 364
Although the entire process of estate duty revolves around the deceased's estate, and the full amount of estate duty is
assessed in the name of the estate, this does not mean that the deceased's personal estate must bear the brunt of the
full estate duty liability. In this connection the Estate Duty Act, 1955, as amended, contains provisions which mean that
each kind of property discharges its own estate duty. Consequently, the part of the estate duty which the executor
attributes to the personal estate from the estate assets, will be paid like any other estate liability, while each other
beneficiary of property involved outside the personal estate must, for purposes of estate duty, discharge his proportional
part of the duty himself. [Translation]
The underlying principle is that someone who benefits from the death of a deceased because he is going to enjoy a
benefit which accrues to him as a result of the deceased's death must bear a pro rata portion of the estate duty
brought about in the deceased's estate by the property on which the benefit is based. It must be emphasised that
this is not a matter of property in the deceased's personal estate accruing to an heir or a legatee under the will it
is a [Page 935] matter of fiduciary, usufructuary and similar rights which terminate at the death of the deceased,
and the benefits which accrue to some person. In the case of mortis causa donations, the proceeds of life policies
paid directly to the beneficiary at the death of the deceased, and annuities payable to someone at the death of the
deceased, responsibility for the estate duty devolves on a pro rata basis upon the beneficiary concerned.
This aspect is governed by sections 11 and 13 of the Estate Duty Act and boils down to the fact that the
beneficiary's share in the estate duty due is calculated by means of the following formula
The practical application of this formula in a concrete case is illustrated in the estate duty division account in
annexure A21.
9.11 The section "estate duty" in the liquidation and distribution account
To begin with, it must be borne in mind that the amount of estate duty payable in a deceased estate, if any, must
be reflected as a claim against the estate in the liabilities section of the liquidation account. Naturally, this means
that the estate administrator cannot begin preparing his liquidation and distribution account before he knows
exactly what the position is regarding estate duty. The estate's liability for estate duty may be so extensive that
some of the assets may have to be realised to settle this liability. This could play a decisive role when deciding on
the method of liquidation. An important principle is evident here: the administrator cannot proceed with the final
account before he has a complete picture of the entire estate in all its facets. It is true that with the majority of
estates it is possible to establish almost immediately whether estate duty will be due or not: a deceased with a
gross estate value of say R1 000 000 and a liability of R200 000 who has been married in community of property is
not exactly a proposition as far as the Commissioner of the South African Revenue Service is concerned!
A procedure for preparing the estate duty account in accordance with regulation 5(1)(h) is illustrated in annexure
A23.
9.12 Completing and submitting revenue form 267
Apart from his calculations to determine the estate duty payable in accordance with regulation 5(1)(h), the executor
of a deceased estate is also expected to submit a return on the prescribed form in which he states what he
considers to be the taxable amount in respect of the relevant estate, together with full particulars on:
(i) the property of the deceased at his date of death;
[Page 936]
(ii) property deemed to be property of the deceased at his date of death;
(iii) all liabilities and rebates claimed in terms of section 4.
These particulars must be furnished on revenue form 267 issued by the Master of the High Court to the executor or
estate administrator. In practice, the form is usually sent to the Master together with the completed liquidation and
distribution account. The executor must attest the return and the same principles and other matters discussed in
this chapter are applicable to the form it is essentially nothing more than the account in terms of regulation 5(1)
(h), although in a more formal form.
The liability to pay capital gains tax forms part of the liabilities of the estate.
9.13 Some tips on estate duty
Anyone dealing with the administration of deceased estates would do well to take heed of the following advice:
o It is always a good idea to keep the latest version of the Estate Duty Act close at hand.
o Make use of the services of other specialists if circumstances demand in a particular estate. Where the
deceased was involved in various commercial transactions, business enterprises or companies, his chartered
accountant or bookkeeper would normally have kept financial statements on a regular, periodic basis. It can
be a great help to examine such statements and consult with the people responsible for keeping them up to
date, not only in view of estate duty but also for the efficient and hasslefree finalisation of the administration
process as a whole. Where an estate is exceptionally complex, it may even be wise to ask an accountant to
do the calculations for estate duty in accordance with regulation 5(1)(h). This is no reflection on the
administrator's ability. On the contrary, it indicates commonsense on his part in the handling of the estate
with which he is charged.
o The minister of finance usually announces certain amendments to estate duty in his annual budget speech.
These amendments usually come into effect during the relevant year and would, therefore, be applicable to
deceased estates of all persons who die on or after the date thus announced. Obviously, estate
administrators should make a point of keeping abreast of adjustments on estate duty announced by the
minister in his budget speech, and take note of the date of their commencement.
9.14 Capital gains tax and deceased estates
9.14.1 Introduction
Capital gains tax (CGT) was introduced in terms of section 26A of the Income Tax Act 58 of 1962. This new form of
tax therefore forms part of an individual [Page 937] taxpayer's taxable income and is levied upon capital gains
resulting from the disposal of certain assets by a taxpayer during a particular year of assessment. A new Schedule
8 had been added to the Act, setting out in detail how a capital gain is to be calculated for purposes of including the
same in the taxable income of a particular taxpayer. CGT took effect on 1 October 2001 and although CGT as such
falls outside the scope of this work, executors and administrators of deceased estates should take due cognisance
thereof as it also affects deceased estates as briefly indicated below. A copy of Schedule 8 is included in the
legislation annexures to this work.
9.14.2 What is a "capital gain"?
Stripped to its barest essentials, a capital gain is the difference between the base cost of an asset as calculated in
terms of Part V of Schedule 8 and the proceeds derived from the disposal of that asset (for example by selling it).
Base cost essentially relates to the expenditure actually incurred by a taxpayer in acquiring the property. Certain
assets, such as a primary residence and personaluse items, for example furniture and motor vehicles for personal
use (as opposed to those used for business purposes) are excluded from CGT.
There is also an annual exclusion of R10 000 in respect of natural persons. Should a person die during a
particular tax year, the exclusion is in respect of that year R50 000. It must be reiterated that the exclusions alluded
to above are not the only exclusions there are more of them but they are not taken into account for purposes of
this cursory overview the exclusions are all detailed in Schedule 8.
9.14.3 The rate at which capital gains tax is levied
In the case of a natural person, his or her taxable gain in respect of a particular year of assessment is 33,3%, but it
is important to bear in mind that this percentage is not the effective rate at which such a taxpayer will eventually be
assessed for Capital gains tax. The effective rate is linked to the personal marginal tax rate ("tax bracket") of the
particular taxpayer, subject to a maximum of 13% for those at the top of the scale (presently 40%). (This effective
rate of 13% is arrived at when multiplying the 40% with 33,33%.)
9.14.4 The effect of capital gains tax upon deceased estates
As from 1 October 2001, deceased estates are also brought within the CGTnet, mainly in terms of paragraph 40 of
Schedule 8. The salient points and practical effects of this paragraph can be summarised as follows:
(i) A deceased natural person is deemed to have disposed of his or her assets to his or her deceased estate on
the date of death at the market value of the assets as calculated in terms of paragraph 31 of Schedule 8. In
other words, the proceeds of such disposal by the deceased to the estate will be an amount equal to that
market value. CGT will accordingly be levied on the difference between the base cost of the assets and the
[Page 938] market value thereof as calculated in paragraph 31, the latter amount being the proceeds of the
deemed disposal by the deceased to the estate. Such CGT constitutes a liability against the estate and the
amount payable accordingly reduces the net value of the estate for estate duty purposes.
(ii) The deceased estate is deemed to have acquired the assets from the deceased at the market value thereof
as calculated in terms of paragraph 31. In other words, the market value of the assets is regarded to be the
proceeds of the disposition of the assets to the estate on the one hand, and the market value is regarded as
the base cost at which the estate acquires the assets, on the other hand.
(iii) Upon the eventual distribution of the assets to the heirs and legatees, either in terms of a will or according to
the rules of intestate succession, the beneficiaries are deemed to have acquired the assets at the base cost
of the deceased estate as set out above, and the heir or legatee is treated as having acquired the assets at
a cost equal to the base cost of the deceased estate in respect of those assets. In other words, the base
cost at which the deceased estate acquires the assets as set out above and the base cost at which the
beneficiaries acquire the assets upon distribution, will be the same amount (paragraph 40(2)(b) of Schedule
8). These principles also apply to testamentary bequests to a trust except a special trust as set out below.
(iv) Where a beneficiary is a surviving spouse, a public benefit organisation or a special trust, the general rule that
the deceased is deemed to have disposed of his or her assets at the market value contemplated in paragraph
31 of Schedule 8 does not apply. A special trust is a trust that had been created for the sole purpose of caring
for a mentally or physically disabled person who is incapable of maintaining him or herself. All the afore
mentioned disposals are therefore not taken into consideration for CGT purposes in terms of paragraph 40 of
Schedule 8.
(v) In the event of liquidity problems arising in a deceased estate subject to CGT and the executor of the estate
is required to sell off an estate asset to pay the tax, paragraph 41 of the Schedule 8 provides that an heir or
legatee, who would have been entitled to that asset had there been no liability for CGT, may elect to have
that asset distributed to such heir or legatee upon the condition that the amount of tax which exceeds 50%
of the net value of the estate as calculated in terms of section 4 of the Estate Duty Act, shall be paid by him or
her within a period of three years as stipulated in the paragraph.
9.14.5 Estate duty and capital gains tax
In view of the additional tax burden imposed upon deceased estates by CGT, provision was made for a measure of
relief by reducing the estate duty rate from 25% to 20% with effect from 1 October 2001. The "interaction" between
estate duty and CGT is illustrated below.
[Page 939]
Assume that X, a widower with no children or liabilities, dies after 1 October 2001. His personal marginal income
tax rate for the year of his demise is 32%. His assets consisted of:
o the house in which he resided during his lifetime, valued at R750 000;
o a motorcar valued at R200 000;
o personal assets valued at R650 000;
o a seaside property valued at date of death at R4 500 000 and which had been valued on 1 October 2001 for
CGT purposes at R1 000 000.
CGT
The primary residence, motorcar and other personal use items are excluded, but the capital gain resulting from the
increase in the value of the seaside property is subject to CGT. The position with regard to CGT and estate duty is
therefore to be determined as follows:
CGT payable
Proceeds (paragraph 31 of Schedule 8) R4 500 000,00
Less base cost R1 000 000,00
R3 500 000,00
Less exclusion: year of death R50 000,00
R3 450 000,00
CGT: 33.3% × R3 450 000 × 32% R368 000,00
Estate duty payable
Less CGT R276 000,00
R5 824 000,00
Less rebate in terms of section 4A R3 500 000,00
Dutiable amount R2 324 000,00
The CGT payable (R276 000,00)
Estate duty hereon at 20% R464 800,00
The total tax liability of the estate would, therefore, amount to R740 800,00. The CGT payable is payable to SARS
with the following income tax return of the deceased (submitted for the period 1 March 20XX to date of death).
9.15 Valueadded tax (VAT) and deceased estates
In terms of the ValueAdded Tax Act 98 of 1991 the deceased estate of a natural person as well as the deceased
estate of a relative as defined in section 1 of the [Page 940] Income Tax Act or any trust fund in respect of which
the deceased estate of such relative is or may be a beneficiary is a "connected person" for purposes of the Act. VAT
falls outside the scope of this work, but an executor or somebody else who is involved with the administration of a
deceased estate should have due regard to the fact that some estates may be affected by the provisions of the
VAT Act. Attention is therefore drawn to a very handy guide on VAT and deceased estates which is available on the
website of the South African Revenue Service, which can be visited at www.sars.gov.za. The guide is reflected on
the website as VAT 413: DECEASED ESTATES and may be downloaded free of charge. The purpose of this
document is to explain:
o which estates will be directly affected by the VAT system;
o how the administration of such estates is affected by the requirements of the Act;
o the VAT treatment of various transactions that may take place during the administration of the estate;
o the duties imposed on certain executors by the Act; and
o the VAT implications for the executor and other parties who may be affected by the administration of the
estate.
VAT on the Executor's fee
For the purposes of calculating the executor's fee, it is important to note that the executor is only entitled to add
VAT to his/her fee if the executor appointed by the Master is registered as a VAT vendor in terms of the VAT Act. If,
therefore, the surviving spouse is nominated as executor (in the will of the deceased) and is appointed by the
Master, but requests a firm of Attorneys (VAT vendors) to administer the estate on her behalf (as her agents), such
firm of attorneys will not be entitled to charge VAT on the executors fees and will be limited to 3,5% of the gross
value of the estate. This is the case, as the agent is not entitled to a larger fee than the appointed executor would
have been able to charge.
Chapter 10
The liquidation and distribution account
10.1 The heading
10.2 The money column
10.3 The liquidation account
10.4 The recapitulation statement
10.5 The distribution account
10.6 The income and expenditure account
10.7 The fiduciary assets account
10.8 The estate duty addendum
10.9 The executor's certificate
[Page 103]
The administration process revolves around the liquidation and distribution account, since it reflects a deceased's
estate in its totality. The account is the end result of the executor's work, and although the submission of the
account is not the end of his duties, if the account that he has submitted, is prepared in terms of the relevant
legislation and regulations he has performed his primary and most important function. Once the Master has
approved the account, the remaining steps are usually a mere formality and few problems are encountered before
the estate is finally settled. As indicated before, the process is concluded when the Master issues a "filing slip".
In this chapter we are mainly concerned with the structure or method of preparing the liquidation and
distribution account. The various aspects of preparing the account are contained in regulation 5(1) of the
regulations under section 103 of the Administration of Estates Act (see annexure D). According to these regulations
an estate account must consist of:
o The heading
o The money column
o The liquidation account
o The recapitulation statement
o The distribution account
o The income and expenditure account
o The fiduciary assets account
o The estate duty addendum
o The executor's certificate.
Note that the Master requires that all these components appear in the liquidation and distribution account. If for
example there are no fiduciary assets in an estate, you cannot merely omit that subsection. You have to state that
there are no such assets.
Note also that the Master expects you to follow the regulations meticulously in the process of preparing the
account. If the Master is satisfied that noncompliance with any of the requirements mentioned in subregulation (1)
is not material, he may waive compliance therewith. Since the regulations are set out clearly and compliance is not
difficult, we recommend that you keep to the regulations as strictly as possible. An administrator could be greatly
embarrassed if the Master insists on compliance with provisions which the administrator may perceive as immaterial.
This would naturally inconvenience the heirs as well since they would have to wait longer to receive their
inheritances.
Each of these subsections are discussed below. Annexures A22 and A23 to this work contain examples of
liquidation and distribution accounts on the basis of which this discussion can be followed.
[Page 104]
10.1 The heading
The account must be given a heading which describes it as a liquidation and distribution account and which reflects
the ordinal number of the account.
In most instances, the account will reflect all the assets and liabilities of the deceased and the distribution of the
assets to his heirs and legatees. The account will therefore rank as a "first and final liquidation and distribution
account" and its heading will describe it as such. There may, however, be circumstances where another type of
account has to be presented that cannot be ranked as "first and final". These are listed and explained as follows by
APJ Bouwer Die Beredderingsproses van Bestorwe Boedels, second edition (1978), JP van der Walt en Seun (Edms)
Bpk at 481:
(a) A First Liquidation Account, which is a first interim account in which only a part of the estate assets and
liabilities are accounted for and in which a credit balance is distributed between the beneficiaries. Contrary to
a first and final liquidation and distribution account in terms of which the windingup process is completed, a
first liquidation account is an interim account which precedes a first and final account.
(b) A First Supplementary Account reflects further assets of the deceased that are discovered after the first
account has been submitted to the Master. If yet further assets are subsequently discovered, second, third
and fourth supplementary accounts will follow without being entitled "final".
(c) An Amended Account is a liquidation and distribution account submitted to the Master to replace an account
that has already been advertised. If the latter has not yet been advertised, the substituting account does not
constitute an amended account, but a redrafted account replacing the one previously submitted to the Master.
The full name, surname and date of death of the deceased must be stated, as well as his/her identity number.
Although not prescribed in the regulation, the place where the deceased died, his last address and his
occupation are usually mentioned under the heading. By providing this detail, the administrator of the estate makes
it easy for the Master's official inspecting the account to ascertain certain facts, e.g. whether the L&D account has
lain open for inspection at the correct magistrate's court.
The deceased's marital status at the time of his/her death must be mentioned. If he/she was married, it must be
stated whether the marriage was in or out of community of property, and if the marriage was in community of
property, the full name of the person to whom the deceased was married must be given as well, including the
surviving spouse's identity number and maiden name, if applicable. If the marriage was out of community of
property, it must be stated whether it was subject to the accrual system in terms of the Matrimonial Property Act or
not.
The Master's reference number must also be mentioned in the heading.
[Page 105]
10.2 The money column
Since an estate account consists of a list of the deceased's assets and liabilities, with money values and amounts
forming an integral part, this aspect requires no further comment.
10.3 The liquidation account
The liquidation account basically consists of a list of estate assets. Each asset appears against its specific value in
the money column, together with a list of all liabilities and claims against the estate, which in turn appear against
the values.
The asset section of the liquidation account is divided into two subsections. Immovable assets in the estate are
entered first against their various values, followed by movable assets. Assets (immovable and movable) which are
subject to a fideicommissum are not entered in the liquidation account but in the fiduciary assets account, which is
discussed below.
Just before the money column, provision is made for an additional column in which the consecutive number of
each item in the liquidation and distribution account must appear. Each item entered in the liquidation account must
be provided with vouchers and supporting documents as proof of the existence of the asset or liability, as the case
may be, as well as the value of each. These supporting documents must be numbered in numeric or alphabetical
order and these are the consecutive numbers which must appear in the column mentioned above. This column is
not really a "column" in the literal sense, but the consecutive number of each voucher is placed in parentheses next
to the money column of the account (see regulation 5(1)(c)(iii)).
In the money column the value of each asset or the amount produced by that asset if the executor sold it (in
other words, its realisation value) is entered opposite the asset.
Below each asset, apart from cash or assets in the estate which have been realised, a socalled disclosure note
must be attached, indicating how the executor intends disposing of each asset. In other words, the executor gives
an indication in the liquidation account, by means of a disclosure note, of how he intends allocating the particular
asset in his distribution account. This note may also be referred to as a divestment note. ("E.g. awarded to the
surviving spouse in terms of clause 2.3 of the will of the deceased dated 12 January 2004" or "awarded to the
surviving spouse in terms of section XX of the Intestate Succession Act, 81/1987".)
The second subsection of the liquidation account sets out the liabilities of the estate, each one accompanied by a
supporting document provided with a serial number entered in the serial number column opposite the liability it
refers to. The fixed order in which liabilities are entered is:
[Page 106]
(i) administration costs involved in the administration of the estate, such as advertising costs, appraisal costs,
Master's fees, executor's remuneration, and so forth;
(ii) the name of each creditor and the amount of his claim against the estate;
(iii) amounts owing in respect of estate duty if the estate is subject to estate duty.
Once the liquidation account has been completed, that is, after all assets and liabilities have been entered and
accounted for, the total value of the liabilities is subtracted from the total value of the assets in order to determine
the net value of the estate; that is, the balance available for distribution. This net value is transferred to the
distribution account for distribution among the beneficiaries.
10.4 The recapitulation statement
The purpose of the recapitulation statement is to determine the cash position of the estate in a nutshell, so to
speak. In the statement all cash assets; that is, all cash moneys in the estate and/or all assets realised for some
reason or another (for example, an estate asset sold out of the estate) are entered on the credit side and all
liabilities in the liquidation account, as well as cash bequests, on the debit side. If it appears that there is a cash
deficit in the estate, the executor supplies a brief explanation of how the deficit will be made up.
10.5 The distribution account
The distribution account opens with the balance available for distribution (which amount is calculated by deducting
the liabilities and the administration costs from the value of the assets in the estate). The following particulars are
given:
(i) the full names of the heirs to whom each asset or group of assets are awarded, with mention of whether the
heirs are majors or minors. If an heir is a minor, his/her date of birth and identity number must be specified;
(ii) the marital status of the heir (as well as whether he/she is married in community of property or not), must be
mentioned. If the heir is married in community of property, full names of the spouse (of the relevant heir) are
also required. In cases where the property is left to the surviving spouse, the marital status of the surviving
spouse is given as "unmarried" unless he/she has remarried;
(iii) the assets included in every award and the reason for every award. This means that the executor must
explain what each award is composed of, for example Rx in cash, Ry in furniture and Rz in shares; and on
what basis this has been done, for example in terms of the will, according to intestate succession, or
according to a redistribution agreement, and so on. In cases where the deceased has left a lengthy will, it is
good administrative policy to quote the exact clause of the will here in order to relieve the administrative
burden on the officials in the Master's Office.
[Page 107]
10.6 The income and expenditure account
In the income and expenditure account all income collected subsequent to the death of the deceased and any
expenses paid from such income must be specified. This usually consists of interest accumulated on cash
investments after the date of death, rental collected after the date, and so forth.
If there is a surplus of income, the balance is divided among the heirs as in the distribution account. If no income
was collected subsequent to the death, this must be stated under this heading the section cannot merely be
omitted. Executor's remuneration of 6% on income collected after the date of death is allowed.
10.7 The fiduciary assets account
If the deceased, as fiduciarius held fiduciary assets pursuant to any will or other instrument, such assets must be
reflected under this heading in the same way as the estate assets were reflected in the liquidation account. The
precise origin of that fiduciary interest in such assets, in other words whether it was created by someone's will, by a
deed of trust, and so forth, must be specified. The Master's reference number for the estate, will or document in
terms of which such interest was created must also be stated.
Further, any liabilities and administration costs which are chargeable against such fiduciary interests must be
stated, and if applicable, also any income derived from the interest.
The procedure used to transfer assets from the deceased's estate, for example to a successive fiduciarius or
fideicommissarius, must also be stated in the distribution account under this heading.
In accordance with regulation 5(1)(g) of the regulations promulgated in terms of section 103 of the Estate
Administration Act, the fiduciary asset account forms a subsection of the first and final liquidation and distribution
account in the estate of someone who, for example, being the fiduciarius, was the owner of the relevant asset(s)
which now has to be handed over to the fideicommissarius at his death. Refer to Annexure A23 for an illustration of
a fiduciary asset account.
In terms of the provisions of section 51(3)(c) of the Administration of Estates Act, the Master may, where a
deceased held a limited interest in property which terminated at his death (as in the case of a fideicommissum),
direct that the executor's remuneration be paid, partially or as a whole, by the successive beneficiary (for example
by a fideicommissarius). The Master will use his discretion in terms of this subsection if no other assets are available
from which the executor's remuneration can be recovered. If the estate of the fiduciarius has sufficient assets for
recovering the executor's remuneration, as well as any other costs involved in the process of transferring the
fiduciary asset to the successive beneficiary, these costs are not legally recoverable from this beneficiary, unless
[Page 108] the person who created the particular fiduciary interest stipulated otherwise. This is particularly
relevant in the case of a fideicommissum mortis causa. It is a fundamental feature of a fideicommissum mortis
causa that the fiduciarius is obliged to restore the fiduciary property in full ownership to the fideicommissarius (see
Joubert CP 1951 THRHR 181, as well as 1953 THRHR 245).
Where the fiduciary asset accounted for in the fiduciary assets account was subject to a fideicommissum and is
transferred to the fideicommissarius as a result of the death of the fiduciarius, no Master's fees are payable.
10.8 The estate duty addendum
The estate duty addendum contains calculations to determine whether or not the estate is subject to estate duty.
The calculation method was explained in the previous chapter.
10.9 The executor's certificate
The liquidation and distribution account is concluded with the executor's certificate, signed and dated by him, in
which he declares that the account is to the best of his knowledge and belief a true and proper account of the
administration and distribution of the estate and that all the assets and income collected subsequent to the death
of the deceased to the date of the account have been disclosed therein. If it is not a final account, the certificate
must furnish full particulars of all debts due to the estate and still outstanding, as well as all assets, stating the
approximate value of each asset still unrealised, including an explanation why such debts and assets have not
been collected or realised. An estimated time for collection or realisation of such assets (if realistically available) is
often also included in this section, together with the steps already taken by the executor to realise same.
Chapter 11
Finalisation of the estate
11.1 Documents accompanying the liquidation and distribution account
11.2 Final requirements after permission to advertise
[Page 113]
11.1 Documents accompanying the liquidation and distribution account
Once the account has been prepared and set out as described in the previous chapter, it must be sent to the
Master, accompanied by the following documents:
(i) proof of advertisement in a newspaper which was circulated in the area in which the deceased resided just
prior to his/her demise (lately most Master's Offices also require proof of advertisement in the Government
Gazette);
(ii) a supplementary inventory (if the account reflects assets not shown in the inventory submitted during the
reporting stage);
(iii) the antenuptial contract if the deceased was married out of community of property;
(iv) a nextofkin statement if the deceased died without leaving a valid will intestate (this statement indicates
the name of blood relatives of the deceased in cases of intestate succession). This would be submitted in all
instances where the deceased bequeathed certain assets (or the residue of his estate) to his "four children"
without providing their names in the will;
(v) a redistribution agreement where applicable (this would typically occur in cases where the allocation of assets
as is set out in the will, is not practical or is not acceptable to the heirs, eg where the estate is to be divided
between two major heirs in equal shares. In such a case, it makes much more sense to draw up a
redistribution agreement in terms of which individual assets are distributed to the individual heirs and the
assets are not held in undivided half shares;
(vi) a revenue form 267 signed by the executor;
(vii) a preliminary bank statement;
(viii) certified copies of the birth certificates of minor heirs (if the Department of Home Affairs has issued a passport
to the minor heir, a certified copy of the passport would also suffice);
(ix) an adiation/repudiation certificate signed by the surviving spouse in cases where the deceased and the
surviving spouse made a joint will. This adiation/repudiation certificate has to be in the form of an affidavit.
Supporting documents and vouchers pertaining to assets and liabilities no longer have to be submitted to the
Master's Office. However, they must be kept on file for submission to the Master if it is required.
It is a good idea to bring certain information to the attention of the Master in an accompanying letter, such as:
(i) why certain assets reflected in the inventory do not appear in the account. You may have determined
(subsequent to drawing up the inventory) that some assets did not belong to the deceased but to someone
else or that he/she had disposed of it before his/her demise;
[Page 114]
(ii) why certain amounts are exceptionally high, for example funeral expenses. Mention that the deceased died
during a holiday in George, for example, and that the body had to be flown to Pretoria for burial. If you do not
inform he Master of such aspects, he will raise a query about this issue and this could delay the process.
Please note that, in September 2003, the Master (in Pretoria) introduced a new system of inspection of Liquidation
and Distribution accounts in certain estates. In estates where the sole beneficiaries are the surviving spouse
and/or major children of the deceased, where no estate duty is payable and where no minors are involved, the
examination of the account is fasttracked. The executor (or agent) is given permission to advertise the Liquidation
and Distribution account and comply with a few outstanding requirements. This permission is granted within 10
(ten) days of the accounts' being lodged. This procedure could work well, but the administrative workings in some
Master's offices seem to be far from optimal, resulting in delays being experienced in the winding up of deceased
estates generally. As many estates fall within this category, it could lead to accounts being dealt with more
expeditiously. See Annexures 14(1) and 14(2) for an example of the Master's query sheet. To date, this method has
not been adopted in all Master's offices countrywide.
11.2 Final requirements after permission to advertise
The following final documents must be submitted before the estate can be finalised:
(i) proof of advertisement in a newspaper to announce that the account is lying open for inspection (an example
of such an advertisement appears in Annexure A24);
(ii) proof of payment of Master's fees (currently a maximum amount of R7 000, which is paid at any of the
commercial banks either physically in the branch or electronically, as SARS has abolished its cash halls);
(iii) a certificate by a conveyancer as proof of transfer of immovable property (see Annexures A25 to A30 for
guidelines in this respect);
(iv) receipts from heirs acknowledging receipt of their inheritances or an affidavit by the executor that all heirs
have been paid;
(v) the final bank statement (indicating a nil balance);
(vi) receipts from creditors if the Master requires that they be submitted.
Proof must also be given of the transfer of shares. A statement in a covering letter to the Master that this has been
done is sufficient.
At submission of the final documents required, you are entitled to a filing slip signed by the Master to confirm that
the estate has been settled to his satisfaction. If he is specifically requested to do so, he will also at this stage
grant the [Page 115] executor his discharge, in which event he may require the letters of executorship to be
returned to him. This is not always done, however and the executor can finalise the administration process if he/she
had complied with all the queries raised in the query sheet issued by the Master. As indicated in earlier chapters, it
might be more practical not to request a formal discharge, as assets only discovered at a later stage, can be
transferred by the executor (who has finalised the administration of the estate, but who has not been formally
discharged). Should the executor have been formally discharged, he (or another executor) would have to be
appointed (or reappointed) in order to deal with such an asset .
Chapter 12
An overview of the accrual system in terms of the Matrimonial Property Act
12.1 Declaration by the spouses of the commencement value of their estates
12.2 Some aspects to bear in mind
12.3 Indexation of excluded assets
[Page 123]
If the marriage of the deceased was subject to the accrual system as contemplated in section 2 of the Matrimonial
Property Act 88 of 1984, the executor must compare the nature and extent of any growth in the deceased estate
and that of the surviving spouse that might have taken place during the marriage for purposes of calculating the
value of a possible accrual claim in terms of the Act. Such a claim may either lie in favour of the surviving spouse or
in favour of the deceased estate, depending in which of the two estates the growth had been greater. The purpose
of the Act was to introduce an additional matrimonial property regime in terms of which spouses can share in the
material benefits of their marriage without the disadvantages of a traditional marriage in community of property
(e.g. the sequestration of the joint estate upon the insolvency of one of the spouses). A marriage out of community
of property (without accrual) where the estates of the spouses remain totally separated after the dissolution of the
marriage by death may nevertheless also be detrimental to one of the spouses in various respects, which are not
discussed here. The accrual system, as far as the proprietary rights of the spouses are concerned, is essentially a
combination of a marriage in community of property and a marriage out of community of property in the sense that
the estates of the parties are separated during the marriage but that the "fruits" of the marriage are shared upon
termination of the marriage (either by death or by divorce). For the duration of the marriage, however, the spouses
remain in full control of their individual estates. Please note that, should the estate of the one spouse be
sequestrated, it has no bearing on the other spouse's estate, provided that he/she is able to prove that he/she
built up such estate from monies received from other sources than that of the now insolvent spouse. The accrual
system can, therefore, be described as a type of "postponed community of profit" (see DSP Cronje and Heaton
South African Family Law, LexisNexis Butterworths, second edition, par 7.4.3 at 98).
Stripped to its essentials, the accrual system provides that the spouse whose estate shows the greatest growth
is obliged to pay the spouse whose estate shows the lesser growth half of the difference between the two
"accruals" when the marriage is dissolved (either by death or divorce). This may be explained by means of a very
simple example. Say, at the commencement of their marriage, the estate of H amounts to R4 million and the estate
of W amounts to R2 million. At the dissolution of the marriage by the death of H, his estate amounts to R12 million
and that of W amounts to R6 million. (In this example, H's accrual was R8 million and W's accrual R4 million). W will
thus have an accrual claim against her late husband's estate in the amount of R2 million, being half of the difference
between the two accruals:
H: 12 m 4 m = 8 m; W: 6 m 2 m = 4 m
.. . 8 m 4 m = 4 m ÷ 2= 2 to W .
It must be reiterated that the above is a very basic example solely for purposes of illustrating the underlying
principle of the accrual system. There is more to it as will appear from what follows.
[Page 124]
Section 4(1) of the Act provides that the accrual of a spouse is the amount by which the net value of his estate
at the dissolution of his marriage exceeds the net value of his estate at the commencement of the marriage. For
purposes of determining the value of such accrual, the following assets of the spouses do not form part of their
respective accruals:
1. Any amount received by a spouse during the subsistence of the marriage in respect of nonpatrimonial
damages, such as an award for defamation or an award in respect of general damages for pain, suffering and
loss of amenities of life, e.g. as a result of a road accident.
2. Assets excluded from the accrual system in terms of the antenuptial contract between the spouses, which
implies that the executor must obtain and check the antenuptial contract.
3. An inheritance, legacy or donation which accrues to a spouse during the subsistence of the marriage, as well
as any asset acquired by virtue of his or her possession or former possession of such inheritance, legacy or
donation (e.g. the spouse purchases a fixed property with money he/she inherited) unless the testator has
stipulated otherwise, or a contrary arrangement was made by the spouses in their antenuptial contract.
4. Donations between the spouses, other than a donation mortis causa.
12.1 Declaration by the spouses of the commencement value of their estates
This aspect is regulated by section 6 of the Act, which provides for the declaration by a spouse of the net
commencement value of his or her estate in the antenuptial contract or by way of a notarised statement within six
months after the date of the marriage. In terms of section 6(4)(b) of the Act the commencement value of a spouse's
estate is deemed to be nil if the liabilities of that spouse exceed his or her assets at the commencement of the
marriage or if no commencement value was declared in the antenuptial contract or a notarised statement. The
commencement value of the estate of a spouse, except where it is deemed to be nil according to section 6(4)(b),
must be adjusted to make allowance for the effect of inflation affecting the monetary value of the spouses'
respective estates between the commencement of the marriage and the termination thereof. For this purpose the
weighted average of the Consumer Price Index (CPI) that is published from time to time by Stats SA in the
Government Gazette is used as prima facie proof of the fluctuation in the value of money.
[Page 125]
Example
1. H and W were married in December 1995 subject to the accrual system. According
to their ANC (antenuptial contract), H's net estate was R20 000,00 and W's net
estate was R10 000,00 (in December 1995). The CPI of December 1995 was 20,8. H
died in May 2018 and the CPI for that month was 132,6. The respective
commencement values of the spouses' estates at the time of H's death are adapted
in terms of section 4(i)(iii) of the Act according to the following formula:
H: (132,6 ÷ 20,8) × R20 000,00 = R127 500,00
W (132,6 ÷ 20,8) × R10 000,00 = R63 750,00
2. At the death of H in 2018, his net estate amounts to R5 000 000,00
3. At the death of H, the net estate of W amounts to R1 000 000,00 and she will
accordingly have an accrual claim against H's deceased estate, which is calculated
as follows:
Deceased estate:
Net value at date of death R5 000 000,00
Less: CPIadjusted commencement value R127 500,00
Accrual therefore amounts to R4 872 500,00
W's estate:
Net value at date of death R1 000 000,00
Less: CPIadjusted commencement value R63 750,00
Accrual therefore amounts to R936 250,00
Because the accrual of W's estate is smaller than that of H's estate, W will have a
claim against the deceased estate for half of the difference between the respective
accruals:
Accrual deceased estate H R4 872 500,00
Accrual W R936 250,00
Difference R3 936 250,00
Half of the difference, constituting W's claim against the estate: R1 968 125,00
12.2 Some aspects to bear in mind
1. An accrual claim by a surviving spouse against the estate of a deceased spouse takes precedence over a
testamentary disposition, a donatio mortis causa or to an inheritance according to the rules of intestate
succession (section 4(2) of the Act). In view of the fact that the accrual claim of the surviving spouse is a
liability of the deceased estate and such spouse actually becomes a creditor of the estate, problems may be
experienced with the administration process in estates where the surviving spouse is not the sole [Page 12
6] beneficiary. The legislature was alive to this contingency and provision is made in section 10 of the Act to
the effect that a person against whom an accrual claim lies (such as an executor of a deceased estate) may
apply for a court order for deferment of the claim upon such terms and conditions as the court may impose.
The problem may be solved by the surviving spouse's abandoning his or her accrual claim or a part thereof,
but the provisions of section 55(1) of the Income Tax Act, according to which any gratuitous renunciation of a
right may attract donations tax, should be kept in mind.
2. The calculation of the accrual claim by the executor should be submitted to the Master together with the
Liquidation and Distribution account. If the surviving spouse is the sole heir, it may be argued that an accrual
claim is only of academic interest and that it is not really necessary to reflect such a claim (see LA Kernick
Administration of Estates and the Drafting of Wills third edition par 10 at 19). Kernick points out that some
examiners at Masters' offices adopt this attitude and it may be advisable to obtain a ruling from the relevant
Master's office before submitting the estate account in order to save time and effort.
3. The amount of an accrual claim payable to a deceased estate by a surviving spouse constitutes deemed
property of the deceased for estate duty purposes in terms of section 3(3)(cA) of the Estate Duty Act.
Conversely, the value of an accrual claim payable by a deceased estate to a surviving spouse is an allowable
deduction from the gross value of the estate in terms of section 4(lA) of the Estate Duty Act.
12.3 Indexation of excluded assets
Section 4(1)(b)(i) a n d 4(1)(b)(ii) of the Act contains no reference to the indexation of excluded assets or assets
which were acquired with the proceeds of excluded assets. It is, therefore, not quite clear whether the value of
such assets should also be CPIadjusted as contemplated in section 4(1)(b)(iii). This problem is canvassed in some
depth by Cronjé and Heaton (supra) at 102103.
Whatever the position regarding other types of property may be (ie, that indexation is probably not required), it
is submitted that the value of cash legacies and cash donations received by a spouse during the marriage should
be indexed for purposes of calculating the end value of the estate of the legatee or donee.
Example
Say that H, in the above example, inherited an amount of R100 000,00 from his favourite
uncle and that, on 10 July 2010, H received a cheque for this amount from the executor
of his uncle's estate. The CPI of July 2010 was 100,8. The value of the legacy is,
therefore, adjusted as follows for purposes of its exclusion from H's estate: 132,6 ÷
100,8 ´ R100 000 = R131 547,62.
Annexures
A1 Duties of the administrator or executor (or his agent)
A2 Death notice
A3 Inventory
A4 Acceptance of trust as executor
A5 Questionnaire
A6 Memorandum regarding the winding up of a deceased estate
A6A An overview of how to administer an estate
A7 Letters of executorship
A8 Special power of attorney
A9 Notice to debtors and creditors (section 29)
A10 Valuation
A11 Letter to financial institution
A12 Request for a specified claim
A13 Covering letter for payment of claim
A14(1) Standard form of query sheet issued to executor after Liquidation
and Distribution has been approved
A14(2) Query sheet issued in expedited estates authorising executor to
complete the process
A15 Application for endorsement
A16 Nextofkin affidavit
A17 Power of attorney to pass bond
A18 Redistribution agreement
A19 Adiation
A20 Dealing with movable property in a deceased estate
A21 Calculation of estate duty: an outline
A22 Liquidation and distribution account
A23 Liquidation and distribution account
A24 Notice of liquidation and distribution account lying for inspection
A25 Deeds office practice: Documents in support of estate transfers
A26 Application for endorsement in terms of section 45 of Act 47 of 1937
A2730 Power of attorney to transfer
A31 . . . . . .
A32 Illustrative example: Estate duty
A33 Application to the Master for extension of the period for submitting
the liquidation and distribution account
A34 SARS: Estate Duty Notice
[Page ANX1]
Annexure A1
Duties of the administrator or executor (or his agent)
1 Report the estate to the Master by forwarding the Death Notice, Death certificate (or certified copy thereof),
Inventory, Will (if applicable) and the form for Acceptance of Executorship (in duplicate) to his office. Other
documents which must be lodged are referred to in Chapter 1. Request the appointment of an executor
(testamentary or dative) for the estate in question. If the total value of the assets in the estate is less than
R250 000, the procedure as set out in section 18(3) must be followed.
2 Ascertain the value of all the assets in the estate. Keep all vouchers safely and properly filed.
3 Assess the value and extent of the liabilities in the estate.
4 Open an estate bank account if the cash in hand is R1000 or more.
5 Determine a suitable method of liquidation for the estate. If there is a cash deficit, consult the beneficiaries.
6 Establish a suitable procedure for administration of estate. If there is a cash deficit, consult heirs.
7 Pay all liabilities only after ensuring that there is no cash deficit and that the estate is solvent. Please note
that many solvent estates experience significant cash shortfalls.
8 If the estate is insolvent, act in terms of section 34 of the Administration of Estates Act.
9 Draw up the liquidation and distribution account and submit it to the Master.
10 Obtain permission from the Master to advertise that the account is lying open for inspection.
11 Pay all creditors if it has not been done as yet and pay, cede, deliver or transfer, as the case may be, the
legacies and inheritances to the beneficiaries.
12 Pay Master's fees.
13 Pay estate duty, if applicable.
14 Attend to the Master's final requirements as per his query sheet.
15 Obtain the Master's release or "filing slip" (please note that currently not all Master's offices still issue "filing
slips", so proof of submission of the final outstanding requirements need to be retained.
NB Executor's remuneration may only be claimed after the estate had been distributed in terms of the relevant
provisions of section 35 of the Administration of Estates Act, 1965. (See section 51 of the Act.)
[Page ANX2]
Annexure A2
Death notice
(In terms of section 7 of the Administration of Estates Act, 1965)
1. Surname of deceased: SMITH
2. First Names: JOHN FRANK
3. Identity Number: 380224 5045 089 4. Race: WHITE
5. Nationality: SOUTH AFRICAN 6. Occupation: PENSIONER
7. Ordinary place(s) of residence during the 12 months prior to death: 243 MELVILLE
ROAD, ILLOVO, JOHANNESBURG, 2000
8. Date of birth: 24 FEBRUARY 1938 9. Place of birth: CAPE TOWN, SOUTH
AFRICA
10. Date of death: 24 AUGUST 2012 11. Place of death: JOHANNESBURG
12. Has the deceased left a will? YES
13. Marital status at time of death: UNMARRIED (WIDOWER)
14. If married, place where married: N/A
15. Full names of surviving spouse and his/her occupation: N/A
16. State whether marriage was in or out of community of property: N/A
17. (a) Name(s) of predeceased spouse(s) and/or divorced spouse(s). (State opposite
name of each whether predeceased or divorced): MARY FREDERIKA SMITH (nee
STAPLE)

(b) Date of death of predeceased spouse(s): 17 MARCH 2011
18. Master's office(s) where predeceased's estate(s) is/are registered and number(s) of
estate(s), if available: JOHANNESBURG, 3540/2011

19. Full names of children of deceased (state whether major or minor or predeceased and
in the latter event, whether they left issue and, if that be the case, the full names of
such issue):
MARTIN JAMES SMITH, MAJOR
SARAH JASMINE JONES (nee SMITH)
20. Names of parents of deceased (state whether parents alive or deceased):
Father: JOHN FRANK SMITH (DECEASED)
Mother: SALLY SMITH (nee MILLARD) (DECEASED)
21. Name and address of person signing the death notice: MARTIN JAMES SMITH,
142 SHIRLEY AVENUE, WELTEVREDEN PARK, JOHANNESBURG
*22. (a) Was the signatory present at the deceased's death? NO
(b) If the answer to the previous question is No, did the signatory identify the
deceased after his death? NO
Dated at JOHANNESBURG, the 27th day of AUGUST 2012
? EXECUTOR (TESTAMENTARY) Capacity

Signature
* If the answer to both questions is no, a death certificate must be submitted herewith.
? State whether signatory is surviving spouse, nearest blood relative or connection
residing in the district in which death has taken place; or is caused by such spouse,
blood relative or connection to give this notice; or is required by the Master to submit
this death notice.
[Page ANX3]
Annexure A3
Inventaris . Inventory
J 243
Ingevolge artikel *9(1)(a)/9(2)(b)/27/78 In terms of section *9(1)(a)/9(2)(b)/27/78

van die Boedelwet, 1965. of the Administration of Estates Act, 1965.
Aandag word gevestig op die bepalings van Attention is directed to the provisions of
artikel 102(1)(b) van die Wet wat bepaal section 102(1)(b) of the Act which provides
dat iemand wat opsetlik 'n valse inventaris that any person who wilfully makes any
ingevolge die Wet opstel 'n misdryf begaan, false inventory under the Act shall be guilty
en by skuldigbevinding met 'n boete van of an offence and liable on conviction to a
hoogstens R1 000 of met gevangenisstraf fine not exceeding R1 000 or to
vir 'n tydperk van hoogstens vyf jaar of met imprisonment for a period not exceeding
sowel sodanige boete as sodanige five years or to both such fine and such
gevangenisstraf strafbaar is. imprisonment.
Volle naam van oorledene
Full name of deceased: JOHN FRANK SMITH
Volle naam van langslewende eggenoot (in die geval waar eggenotes in gemeenskap van
goed getroud was)
Full name of surviving spouse (in a case where spouses were married in community of
property): N/A
Adres van langslewende eggenoot
Address of surviving spouse: N/A
Saamgevoegde boedel van
Massed estate of: N/A
of/or
Volle naam (name) van die minderjariges onder voogdyskap of persoon ten opsigte van wie
se goed 'n brief van kuratele uitgereik is
Full name(s) of minor(s) under tutorship or person in respect of whose property letters of
curatorship have been granted: N/A
Volledige adres
Full address: N/A
Ek/I (volle naam/full name): MARTIN JAMES SMITH
van/of (volledige adres/full address): 142 SHIRLEY AVENUE, WELTEVREDEN PARK,
JOHANNESBURG

in my hoedanigheid van/in my capacity as: EXECUTOR (testamentary nomination)
verklaar hierby dat na my beste wete en
hereby declare that to the best of my
oortuiging die hieringenoemde
knowledge and belief the within mentioned
besonderhede 'n ware en juiste inventaris
is a true and correct inventory
is
*(a) of all property known to me to have
*(a) van al die goed wat na my wete ten
belonged, at the time of death, to the
tyde van die dood van *bogenoemde
*abovenamed deceased/joint estate of
oorledene/gesamentlike boedel van
the abovenamed deceased and
bogenoemde oorledene en sy
surviving spouse/abovenamed massed
langslewende eggenoot/bogenoemde
estate;
saamgevoegde boedel behoort het;
*(b) of all property known to me to have
*(b) van al die goed wat na my wete in
been in the possession of the
besit van bogenoemde oorledene op
abovenamed deceased upon the
die perseel te 243 MELVILLE ROAD,
premises at ..................... at the time
ILLOVO, JOHANNESBURG, 2000 ten
of *his/her death;
tyde van *sy/haar dood was;
*(c) showing the value of all property in
*(c) w a t d i e w a a r d e v a n a l d i e g o e d i n
the abovenamed estate;
bogenoemde boedel aandui;
*(d) of all the property taken care of or
*(d) van al die goed wat deur my versorg
administered by me.
of geadministreer word.

Plek/Place Datum/Date Handtekening/Signature
Name en adresse van persone wat as
Names and addresses of persons having an
erfgename by die boedel belang het in wie
interest in the estate as heirs in whose
se teenwoordigheid hierdie inventaris
presence this inventory was made. (To be
opgestel is. (Verstrek te word in die geval
furnished in the case of an inventory under
van 'n inventaris kragtens artikel 9 van die
section 9 of the Act);
Wet);
MARTIN JAMES SMITH, MAJOR
SARAH JASMINE JONES (nee SMITH), MAJOR

* Skrap wat nie van toepassing is nie/Delete which is not applicable.
[Page ANX4]
J 243
1. Onroerende goed/Immovable property
Beskrywing van goed volgens die titelbewys
Waarde/
(meld ook nommer en datum daarvan)
Value
Description of property according to the title deed
R c
(also state number and date thereof)
243 MELVILLE ROAD ILLOVO (ERF 254, ILLOVO)
2 500 000 00
HELD BY DEED OF TRANSFER T2433/1978

Totaal/Total.................R 2 500 000 00
[Page ANX5]
J 243
2. Roerende goed/Movable property
Waarde/
Beskrywing
Value
Description
R c
FURNITURE AND HOUSEHOLD ASSETS 200 000 00
BMW 3 SERIES MOTOR VEHICLE (FGS234GP) (2002 MODEL) 80 000 00
JEWELLERY AND PERSONAL EFFECTS 100 000 00

Totaal/Total.................R 380 000 00
[Page ANX6]
J 243
3. Vorderings ten gunste van boedel/Claims in favour of the estate
Waarde/
Beskrywing
Value
Description
R c
FIXED INVESTMENT WITH ABSA BANK (ACCOUNT NUMBER
254 000 00
407 078 789)
INSURANCE POLICIES WITH ONE LIFE DIRECT 1 200 000 00
FUNERAL COVER WITH EDGARS FINANCIAL SERVICES 6 000 00

Totaal/Total.................R 1 460 000 00

R c
OPSOMMINGSUMMARY
1. Onroerende goed/Immovable property 2 500 000 00
2 Roerende goed/Movable property 380 000 00
3. Vorderings ten gunste van boedel/Claims in favour of estate 1 460 000 00
Totaal/Total.................R 4 340 000 00
[Page ANX7]
Annexure A4
Acceptance of trust as executor
TO: THE MASTER OF THE HIGH COURT
JOHANNESBURG
I, MARTIN JAMES SMITH, 142 SHIRLEY AVENUE, WELTEVREDENPARK, JOHANNESBURG (Tel
082 890 0988) , in my capacity as nominated executor in terms of the will of the late JOHN
FRANK SMITH hereby apply for appointment as Executor Testamentary in the Estate of the
late JOSEPH KURLANSKY to whom the following details apply:
Date of Birth: 24 FEBRUARY 1938 Date of Death: 24 AUGUST 2012
District in which normally resident: JOHANNESBURG
Income Tax Reference Number: 240989797P
If deceased was a married woman, the following particulars relate to her surviving spouse:
: N/A
Full names: N/A
Income Tax Reference Number: N/A
1 I choose domicilium citandi et executandi at 142 SHIRLEY AVENUE, WELTEVREDEN
PARK, JOHANNESBURG.
2 I understand the duties and penalties applying to the office of Executor in terms of Act
No. 66 of 1965, which have been explained to me.
3 I am not an unrehabilitated insolvent nor have I at any time committed an act of
insolvency.
4 I am exempt from furnishing security. I will be assisted in the administration of the
estate by Mr Gert Nel of the trust and estate department of PricewaterhouseCoopers
Incorporated, who is sufficiently skilled and experienced in the administration of
deceased estates.
5 I am permanently resident in the Republic of South Africa and undertake to advise the
Master of the High Court immediately should my Estate or that of a person who has
signed as surety for the Bond of Security be sequestrated or commit an act of
insolvency, or should I proceed to reside outside the Republic of South Africa.
WITNESSES: APPLICANT:
1
2 .
SIGNED in my presence at on the day of 20
MJ SMITH
[Page ANX8]
Annexure A5
Questionnaire
A PERSONAL PARTICULARS
1 (i) In whose possession is the will?
(ii) Where are the deceased's other documents?
2 Where no executor is nominated
(i) Who must be appointed?
(ii) His/her address
3 To whom should be reported?
4 Financial needs of next of kin
B PARTICULARS OF ASSETS
(State approximate value)
1 Fixed property
(i) Specify
(ii) By whom are these properties occupied?
(iii) Are these properties being leased?
(a) Name and address of lessee
(b) Rental and how payable
(iv) Are there any usufructs in favour of the deceased?
(v) Where are the title deeds?
2 Movable property
(i) Furniture and household effects
(ii) Motor vehicles
(iii) Farming implements
In whose possession are these assets?
3 Investments
(i) Financial institutions
(ii) Banks
(iii) Accounts
(iv) Mortgage bonds and promissory notes in favour of the deceased
[Page ANX9]
4 Shares
(i) Noted on Stock Exchange
(ii) Not noted:
(a) Particulars of company auditor
(b) Was the deceased a director?
(c) Particulars of any dividends or director's remuneration owing
(d) Does the deceased have a loan account?
5 Insurance policies (including retirement annuities)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(a) Are there any loans against these policies?
(b) Who are the beneficiaries of these policies?
(i)
(ii)
(iii)
(iv)
(v)
(vi)
6 Sundry debtors

7 Amounts owing by heirs

8 Donations to heirs
(i) Should the amount be paid into the estate?
(ii) Should donations be collated? (collatio bonorum)
9 Where is the antenuptial contract?

Does the antenuptial contract provide for donations or other dispositions in favour of
the surviving spouse or a child? If so, have they been given effect to?

[Page ANX10]
10 Name and address of deceased's employer

(i) Are any arrears in salary owing to the deceased? If so, give particulars

(ii) Did the deceased receive a pension? If so, give particulars

(iii) Is the surviving spouse entitled to benefits from the deceased's pension fund?
If so, give particulars

(iv) Was the deceased a member of an employees' group assurance scheme? If
so, give particulars and indicate who the beneficiaries are

C PARTICULARS OF DEBTS OWING BY DECEASED
(State the estimated amounts of these debts)
1 Mortgage bonds over fixed property
(i) Name and address of mortgagee
(ii) Instructions regarding rates and taxes and water and electricity accounts

2 Bank overdraft (Bank, branch and approximate debit balance)

3 Loans owing
4 Accounts (Accounts owing on date of death is payable by the estate.)
(i) Burial expenses
(a) To whom are burial expenses payable?
(b) D i d t h e d e c e a s e d h a v e i n s u r a n c e o r a n y s p e c i f i c c o v e r f o r b u r i a l
expenses? If so, give particulars
(ii) Medical accounts (doctor, pharmacy, hospital, etcetera)

(iii) Sundry creditors
(iv) Income tax
(a) Income tax reference no.
(b) Office of Revenue Services where previous income tax returns where
submitted
(c) Date of last assessment
(d) Who handled the income tax returns?
[Page ANX11]
D GENERAL
1 Instructions regarding sale of assets
(NB: Refer to section 47 of the Administration of Estates Act, 1965)
(i) Which fixed assets must be sold? (State minimum gross price ie: including
agent's commission.)
(ii) Which movables must be sold? If so, in what manner (eg private treaty, public
auction, etcetera)
2 Does the surviving spouse require a new will?
3 Are the beneficiaries desirous of having their monies invested?
[Page ANX12]
Annexure A6
Memorandum regarding the winding up of a deceased estate
(To be handed to client.)
As you have instructed this firm to handle the estate on your behalf, we shall do all the necessary steps to ensure
that the estate is finalised as soon as possible. Kindly ensure that all documents which may still be relevant to the
affairs of the deceased, as well as all accounts, are to be handed to us as a matter of urgency.
You will be kept posted as to progress with the estate, and for your information and convenience we are furnishing
hereunder a short survey of the normal steps which are to be taken in the process of winding up a deceased
estate.
1 At the death of a person, his/her estate is reported at the office of the Master, who issues letters of
executorship in terms of which the executor is authorised to administer (wind up) the estate.
2 After the letters of executorship has been issued, a notice is published in a local newspaper in which debtors
are requested to pay their debts and creditors to submit their claims against the estate within 30 days after
the date of publication of the notice.
3 All amounts owing to the estate are collected. Fixed property, movable property and shares are appraised by
persons specially appointed by the firm, and certificates to assert all other estate assets are acquired. Unless
the will provides otherwise, estate assets may only be sold to pay debts, or with permission of the heirs.
4 If the estate is solvent, the estate debts are paid, or arrangements are made for the taking over of debts by
heirs, for example the taking over of existing mortgage bonds over fixed properties.
5 Within six months after the appointment of an executor, an estate account is prepared and submitted to the
Master. This account is a report of all the assets and liabilities as on the date of death and it also reflects the
distribution of the net surplus between the heirs. This distribution takes place in accordance with the
directions in the will, or where the deceased died without a will, the distribution is done in terms of the law of
intestate succession.
6 The Master examines the account and if he is satisfied therewith, an advertisement is placed in a local
newspaper to the effect that the account is available for inspection, should any interested person wish to
object against the account.
7 After the account has lain free of objections, inheritances are paid over to the heirs and any property which
he/she inherits are handed over to them. Fixed property, such as a house, is formally transferred in the Deeds
Office in the name of the heir.
[Page ANX13]
8 After all the assets have been handed over or transferred to the heirs and all debts of the estate have been
paid, application is made to the Master for discharge of the executor and the estate is therewith finalised.
9 The firm takes the executor's fees allowed by the Master as remuneration for the work done in winding up the
estate. Deeds Office work, if any, is done at the usual conveyancing tariffs.
10 If no complications crop up, a deceased estate can be completely finalised in less than a year.
11 In view of the fact that circumstances may change, it is preferable that a surviving spouse gives attention to
the drawing up of a new will.
[Page ANX14]
Annexure A6A
An overview of how to administer an estate
A TAKING OF INSTRUCTIONS
The first time you will probably become aware of the estate, is when the family or heirs approach you to administer
the estate.
B FIRST CONSULTATION WITH FAMILY MEMBERS
The first consultation with the family of the deceased is of utmost importance. Once the instruction to administer the
estate has been accepted, an appointment with the surviving spouse or family members must be arranged. This
must be done as quickly as possible, not only to set the family members' minds at ease that the estate has been
placed in capable hands, but also due to the fact that the Act sets certain time limits within which the estate must
be reported (see sections 7, 8 and 9 of the Act).
It is at the first consultation that one obtains all the information required in order to administer the estate. If the
first consultation is dealt with properly, it will obviate the need to consult with the family or beneficiaries again. After
the first consultation, one should keep the beneficiaries and family abreast of developments by making a couple of
telephone calls.
Remember:
. In order to ensure that relevant information is obtained, it is a good idea to make use of a checklist. The family
members or beneficiaries can be informed by telephone before the consultation in respect of what information
or documentation must be furnished. For an example of a typical checklist, see Annexure A5.
. It is also a good idea to inform the family of the deceased how the administration of the estate will be
performed. By doing this, it will save a lot of time in answering queries by the beneficiaries. After all, they do
want to know when they are going to receive their inheritances. See A6 for an example of a memorandum
which can be handed to the family members which sets out the administration process for them in layman's
terms.
. It is prudent at this stage to discuss your fees with the beneficiaries and the family. The prescribed fee (in
terms of the Act), is fixed at 3,5% of the gross value of the assets of the estate. It has been experienced that
heirs sometimes query the fee charged when the estate is wound up within a short period of time. However, a
good executor should not take longer than six to nine months to wind up an estate (certain exceptions could
occur).
C REPORTING THE ESTATE
Once all the necessary information has been obtained, the estate must be reported to the Master of the High Court.
The Master will open a file and give an [Page ANX14(1)] estate number to the deceased estate. The number must
be used in all correspondence with the Master.
Reporting the estate is an important step in the administration process and, unless one wants to experience a
great deal of frustration, it is suggested that this part of the process is correctly dealt with from the outset. One
should be in a position to report the estate immediately after the first consultation.
See chapter 3 on which documents should be submitted to the Master of the High Court.
D EXECUTOR'S DUTIES AFTER RECEIVING THE LETTERS OF EXECUTORSHIP
1 Notice to creditors
In terms of section 29 of the Act, the executor must place a notice in the Government Gazette and a local newspaper
circulated in the district where the deceased was ordinarily resident in the twelve months prior to his death. The
prescribed form (Form J193) must be used in order to place the notice in the Government Gazette. A copy of the
same form can be faxed to the local newspaper since it provides all the information needed by the newspaper in
order to place the notice. Some newspapers provide a service by also placing the advertisement in the Government
Gazette. The advantage of having the newspaper place both advertisements, is that one is assured that the
advertisements will appear in the Government Gazette and the newspaper on the same day, although this is not
strictly speaking necessary.
2 Open an estate bank account
The Act states that the executor must open a cheque account in the name of the estate with a bank within the
Republic as soon as he has in hand monies in excess of R1 000.
Remember:
. All banks require the same documents to open an estate banking account. They are: certified copies of the
death certificate, the ID of the deceased, the Letters of Executorship, the power of attorney (where applicable)
and the agent's ID (where applicable). Due to new legislation to counter money laundering, the banks also
require proof of the physical address of the executor or agent. This can be provided by means of a recent copy
of the monthly account of the particular local authority in respect of municipal rates and taxes or a telephone
account.
. Some banks are willing to close the accounts of the deceased and transfer the monies electronically to the
account of the surviving spouse (only heir) if her account is with the same bank. If not, ask them to close all the
accounts of the deceased and to transfer the monies electronically into the estate bank account.
. Avoid unnecessary queries and/or investigations by the Master by handling the banking affairs of the estate in
the prescribed manner.
[Page ANX14(2)]
E DETERMINING THE SOLVENCY OF THE ESTATE (SECTION 34)
Once the period for the lodging of claims in terms of section 29 has expired, the executor must determine the
solvency of the estate. If the estate is insolvent (that is, the liabilities exceed the available assets), the provisions
of section 34(1) have to be complied with. Since the administration of insolvent estates falls outside the scope of
this work, it will not be dealt with in detail.
F OBTAINING VALUATIONS, BALANCE CERTIFICATES ETC
If this has not already been done at this stage, the executor must have all the movable and immovable assets
valued and obtain balance certificates in respect of all bank accounts, investments etc.
1 Assets
(a) Immovable property
Immovable property belonging to the deceased must be reflected in the Liquidation Account. The description of the
property in the account must be according to the title deed in question, irrespective of whether the property has
been sold or is being awarded in specie. If the executor sold the property, the proceeds of the property must be
reflected. If the property has been awarded in specie, the property must be reflected at value. The value so
reflected, could be an appraised value, the municipal valuation or an estimated value. Where minors, absentees or
unknown heirs are involved, or estate duty is payable, a sworn valuation will always be used. However, where the
surviving spouse is the sole heir, the Master will probably accept a municipal valuation or an estimated value, since
no prejudice can be suffered. The municipal valuation normally appears on the account of the city council and is thus
easily obtainable.
(b) Motor vehicles
Ask the beneficiaries to obtain a valuation from the motor dealer. Also ask them to get the vehicle registered in the
name of the beneficiary as soon as possible. This will prevent problems later, for example, in case of a collision or
theft.
(c) Furniture, household goods, jewellery etc.
If the surviving spouse is the sole beneficiary, all these items could very easily be left out of the estate. No formal
registration or transfer is required in order to change the ownership to the spouse. Should one include these items
in the account, the heirs could possibly construe it as a way in which you are attempting to increase the gross value
of the estate in order to charge a higher fee.
If these items are really valuable or if they are specifically bequeathed, obtain a valuation from an expert.
(d) Insurance policies
It must be borne in mind that only insurance policies which are paid to the estate as beneficiary, must be reflected
in the liquidation account. Policies which pay outside the estate, directly to the nominate beneficiaries, are not
reflected in the liquidation account, although they will be reflected in the estate duty addendum.
[Page ANX14(3)]
Remember:
. Most people have a few policies. If the deceased had an insurance broker, make use of his services it will
normally speed up payments.
. If you have to deal with the insurance companies personally, phone their hotline (help line) most of them have
such a number and try to speak to someone specific in their deceased estate department. Find out what their
requirements are for payment.
It is also advisable to phone after normal business hours. Otherwise you will have to listen to bad music and an
occasional "Your call is important to us . . ."
. Insurance companies do not send cheques by post, but transfer the proceeds of the policies electronically to
the required account. This hastens proceedings and eliminates the possibility of cheques getting lost in the post
or being stolen.
(e) Shares
When dealing with shares, one must distinguish between listed and unlisted shares. In the case of listed shares, a
stockbroker must value the shares if awarded in specie and sell them if the shares are to be reduced to cash. When
the stockbroker values the shares, he will determine the middlemarket value as at date of death. Unlisted shares
must be valued by the auditor of the company in question and the value accepted by the Revenue Inspector.
Unlisted shares will normally not be sold.
Remember:
. Due to the fact that all share transactions on the JSE are now totally electronic (paperless), no share
certificates will be provided.
. Records of the shareholding are kept by the stockbrokers. They charge a monthly fee for their services in this
regard. If the deceased only had a few shares, it would normally be in the best interest of the estate to have
the shares sold, for instance, in quite a number of estates there are Old Mutual and Sanlam shares that were
allotted to people who had policies with those companies when they demutualised.
(f) Timeshare
If the deceased had timeshare in a resort, this must also be transferred to the heirs.
Remember:
. Find out who the transfer secretaries are and direct your enquiries to them. This can normally be done with
relative ease.
(g) Cash assets
The deceased may have had various cash assets at the time of his death. These are the easiest assets to deal
with, since the banks issue certificates of balance on demand.
[Page ANX14(4)]
Remember:
. Ask the bank to transfer the proceeds of the investments into the beneficiary's account electronically. If the
beneficiary's account is with the same bank, this is easily accomplished.
. If no cash is paid out, but rather transferred electronically, it might be possible to negotiate with the banks that
no estate bank account is opened and that the funds are transferred directly. Ensure that you advise the
Master in the letter accompanying the Liquidation and Distribution Account, why no estate bank account was
opened. Remember that the Act states that you must open an account if you have R1 000 or more in hand.
(h) Other assets
If the deceased had other assets not specifically mentioned above, they should be dealt with in the same manner
as set out above.
Remember:
. When dealing with large institutions, it has been found to be more time efficient to first determine the name
and designation of the specific person dealing with the matter before a letter or fax is sent. If the letter is
merely sent off (addressed to nobody in particular), it might take a considerable amount of time to reach the
official actually dealing with the matter.
2 Liabilities
Liabilities can be grouped together under three basic headings, viz administration expenses, claims against the
estate, and estate duty.
Refer to the discussion in chapters 8 and 9.
Remember:
. Take note of the provisions of section 32(2) in respect of who may question the "creditor" where a disputed
claim has been lodged against the estate.
. Also take note of the provisions of section 31 in respect of late claims.
Diverse claims
These could include the following:
(a) Maintenance claims in respect of minors
Both parents have a duty to maintain their children. This duty does not cease upon death.
Remember:
. A claim for future maintenance will only be lodged when a minor child has not been provided for in the will or by
some other suitable means, for example, a trust or a policy.
[Page ANX14(5)]
. A claim for future maintenance cannot compete with the claims of the deceased's creditors. Only once the
deceased's creditors have been paid in full, will the claim for future maintenance be met.
(b) Maintenance claims in respect of the surviving spouse
The Maintenance of Surviving Spouses Act 27 of 1990, which came into effect on 1 July 1990, provides the surviving
spouse (in certain circumstances) with a claim for future maintenance against the estate of the deceased spouse.
Remember:
. The Act is only applicable to the estate of a deceased who was married at the time of his death. The claim of a
divorced spouse for arrear maintenance, is a normal claim against the estate (such as by any other creditor).
. Claims in respect of the Maintenance of Surviving Spouses Act do not compete with the claims of creditors of the
deceased.
(c) Marriage claims
Distinguish between where the spouses were married in community of property and where they were married out
of community of property.
Remember:
. Where the spouses were married in community of property, the survivor obviously has a claim for half the
estate in terms of the Matrimonial Property regime. A practice has evolved to reflect this claim for half the estate
in the Distribution Account. Most people find this to be the easiest method, since the liabilities are also liabilities
of the joint estate. The claim for half is then based on what remains after the liabilities have been met.
. Where the spouses were married out of community of property with the inclusion of the accrual system, the
survivor may have a claim against the deceased in terms of section 3(1) of the Matrimonial Property Act 88 of
1984. This claim should be included under the heading "Claims in favour of the estate" in the Liquidation
Account section of the L&D.
. Claims for gifts awarded in the Antenuptial Contract, but not yet delivered at the date of death, will be
reflected as a normal creditor (or claim) against the estate of the deceased.
Final points on liabilities
. Pay claims against the estate as soon as money comes to hand (cash investments, proceeds of policies etc). By
doing this, an enormous amount could be saved (for example, interest on bonds and overdrafts).
. Sometimes the heirs are in a position to pay off the claims against the estate soon after the death of the
deceased. If this is the case, do not show the amounts as claims against the estate in the Liquidation Account.
If the sole heir paid the claims, he/she will then receive a larger award in the Distribution Account, as the claims
were not paid out of the estate. The net effect is the same. If somebody who is not an heir, paid certain
expenses (for example, [Page ANX14(6)] the spouse is the sole beneficiary and one of the children paid for the
funeral, such child will have a claim against the estate for the amount so laid out).
G METHODS OF LIQUIDATION
See the full discussion in chapter 5.
H THE LIQUIDATION AIND DISTRIBUTION ACCOUNT
See the discussion in chapter 10 as well as the examples in Annexures A22 and A23.
I FINALISATION OF THE ESTATE
See the discussion in chapter 11.
[Page ANX14(7)]
Annexure A7
Letters of executorship

[Page ANX15]
Annexure A8
Special power of attorney
I, the undersigned,
STEPHAN TONY FRANKLIN
In my capacity as executor in the estate of the late BEATRICE FRANKLIN, do hereby
nominate
JOHN DAVIDS
With power of substitution to be my lawful agent, to represent me as Executor and
Administrator and to exercise all my powers as Executor and Administrator as I might or
could do if personally present and acting in person without in any way detracting from the
powers aforesaid, I hereby authorise the said agent to:
1. Collect monies, give and grant receipts and discharges and to compound any claims
in the said estate;
2. Prosecute, defend, abandon, compromise or take to appeal any legal proceedings
brought by or against the said estate;
3. Open and operate any banking account in the name of the estate and to sign or
endorse any negotiable instruments for and on behalf of the estate;
4. Invest and deal with any investments belonging to the said estate and to consent to
the cancellation or release of any securities;
5. Sell movable and immovable property, shares and securities belonging to the said
estate and for such price and upon such terms as the said agent may deem
appropriate and to give transfer thereof to the purchaser/s;
6. Sign any estate accounts and all documents that may be necessary or required in
connection with or arising from the administration of the estate;
7. Transfer from the estate any movable or immovable property to any person/s
entitled thereto by reason or purchase, bequest, legacy or otherwise howsoever and
to sign all or any documents required to give effect to such transfer,
And generally do or cause to be done what I might have done if personally present and
acting herein, hereby ratifying, allowing and confirming whatsoever my said agent shall
lawfully do or cause to be done, by virtue of these presents.
DATED AT JOHANNESBURG ON THIS 27TH DAY OF AUGUST 2012.
1.
ST FRANKLIN
2.
[Page ANX16]
Annexure A9
Notice to debtors and creditors (section 29)
In the estate of the late JOHN SMITH (identity number 400605 6015 002), married in
community of property to VIOLET SMITH (née BELLAPOPPAHOF) and who died on the 18
May 2012, Master's reference 12257/2012.
Creditors and debtors are hereby called upon to submit their claims and to pay their
debts within 30 (THIRTY) days as from the date of this advertisement.
DOSTYN, BOSHOFF AND FICK
PO Box 62506
Noordbrug2522
Annexure A10
Valuation
We, the undersigned,
PETER BILLINGS
AND
JAMES COCKROFT
do hereby declare that we have appraised the undermentioned assets in the estate of
the late JOHN SMITH, Master's reference 12257/2012 as follows:
1 2005 Toyota Camry, Registration no. YCT872GP R121 000,00
2 Furniture R2500,00
Signed at Potchefstroom on this 28 July 2012.
AS WITNESSES:
1
P BILLINGS
2
J COCKROFT
[Page ANX17]
Annexure A11
Letter to financial institution
The Manager
Horizon Bank
PO Box 1642
Potchefstroom
2520
Dear Sir
Estate late J Smith
We are handling the above estate on behalf of the executor, and enclose herewith copies
of the letters of executorship and our power of attorney. According to our information,
the deceased had the following deposits with your society:
1 Fixed deposit XB 823/6 for an amount of R300 000,00
2 Savings account 007/426/584
Kindly furnish us, at your earliest convenience, with certificates of balance indicating the
capital values as well as accrued interest as from 16 August 2010, which is the date of
death.
Thanking you in anticipation.
Yours faithfully

Per:
[Page ANX18]
Annexure A12
Request for a specified claim
Dear Sir/Madam
Estate late J Smith
It appears from our records that you may possibly have a claim against the above
estate. Kindly furnish us with a specified account as soon as possible, fully setting out the
details of your claim. Kindly note that the claim should be as on the date of death of the
deceased, which is 16 August 2010. Amounts which fell due after this date, do not
represent a claim against the estate.
As we are in the process of winding up the estate, we shall be pleased to have your
response at an early date.
Yours faithfully

Per:
* Payment can also be made electronically.
Annexure A13
Covering letter for payment of claim
Dear Sir/Madam
Estate late J Smith
Enclosed please find a cheque in the amount of R........................ in settlement of your
claim against the estate.
Kindly affix your official receipt to this letter and return the same to us, as the Master of
the High Court requires proof of payment.
Yours faithfully

Per:
[Page ANX19]
Annexure A14(1)
Standard form of query sheet issued to executor after Liquidation and Distribution has been approved

[Page ANX20]
Annexure A14(2)
Query sheet issued in expedited estates authorising executor to complete the process

[Page ANX20(1)]
Annexure A15
Aansoek om endossement
Application for endorsement
[Artikel 42(2) van die Boedelwet, No 66 van 1965, (soos gewysig)]
[Section 42(2) of the Administration of Estates Act, No 66 of 1965, (as amended)]
L.W. Hierdie lys van vereistes, waaraan volledig voldoen moet word, moet elke
aansoek vergesel.
Indien die eiendom voor dood verkoop is, moet slegs aan paragrawe 1 tot 7 en 11
voldoen word.
N.B. This list of requirements, which must be fully complied with, must accompany
each application.
If the property was sold prior to date of death, only paragraphs 1 to 7 and 11
need be complied with.
BOEDEL WYLE/ESTATE LATE: NO:
Vereistes/Requirements
Voorlopige/Preliminary Antwoorde/
1 Kort beskrywing van eiendom Replies
Short description of property
2 Aktevervaardiger se sertifikaat wat alle verskille en
onduidelikhede in beskrywing van eiendomme in
Likwidasierekening, Koopakte en/of Prokurasie verduidelik.

Certificate by conveyancer, explaining all discrepancies in the
description of the properties in Liquidation Account, Deed of Sale
and/or Power of Attorney.
3 Bevestiging dat koper nie een van die persone gemeld in Artikel
49(1) is nie.

Confirmation that the purchaser is not one of the persons
mentioned in Section 49(1).
4 Prokurasie om transport te gee/Aktevervaardiger se sertifikaat
ingevolge Artikel 11(4) van die Wet op Deeltitels, No 66 van
1971.
Power of attorney to pass transfer/Certificate by conveyancer in
terms of Section 11(4) of the Sectional Titles Act, No 66 of 1971.
5 Is daar enige verbodsbepalings teen verkoping, bv in Testament,
Titelakte of Wet?

Is there any prohibition to the sale, e.g. in a Will, Title Deed or
Act?
6 Bevestiging dat alle belanghebbendes kennis gedra het van die
verkoping, en geen besware het nie.

Confirmation that all interested parties were aware of the sale
and did not object thereto.
7 Bevestiging dat die koop in alle opsigte wettig en bindend is.

Confirmation that the sale is in all respects legal and binding.
8 Indien boedel insolvent is:
If estate is insolvent:
Afskrif van kennisgewing aan skuldeisers ingevolge Artikel
34(2).
Copy of notice to creditors in terms of Section 34(2).
Is enige besware ingevolge Artikel 34(3) ontvang?
Were any objections lodged in terms of Section 34(3)?
[Page ANX21]
19 Skriftelike toestemming deur meerderjarige erfgename en/of
Voogde van minderjariges tot wyse en voorwaardes van
verkoping.
Written consents by major heirs and/or Tutors of minors to the
manner and conditions of sale.
10 Indien Artikel 47(a) of (b) van toepassing is:
If Section 47(a) or (b) is applicable:
Taksateurswaardasie van eiendom
Valuation by appraiser

Redes waarom bepaalde wyse en voorwaardes van verkoping
die voordeligste geag word.
Reasons why specific manner and conditions of sale is
preferred.
Eksekuteur se kommentaar op besware teen verkoping.

Comments by Executor on objections to sale.
FINALE/FINAL
11 VERKOPING UIT DIE HAND:
SALE BY PRIVATE TREATY:
Koopakte of gesertifiseerde afskrif
Deed of sale or certified copy
Op watter bedrag is hereregte betaal?
On what amount has transfer duty been paid?
12 VERKOPING PER OPENBARE VEILING:
SALE BY PUBLIC AUCTION:
Behoorlik voltooide verkoopsvoorwaardes van Afslaer, of ge
sertifiseerde afskrif daarvan.

Auctioneer's conditions of sale duly completed or a certified
copy thereof.
Versekering deur Afslaer dat verkopng goed geadverteer en
bygewoon is, en dat prys behaal in ooreenstemming met hui
dige markwaardes is.
Assurance by Auctioneer that sale was well advertised and
attended, and that the purchase price is in accordance with
present day prices.
Name van nuusblaaie waarin geadverteer, asook uitknipsels
en datums van publikasie.
Names of newspapers in which advertisements appeared, and
cuttings of such advertisements and dates of publication.

SEGS VIR KANTOORGEBRUIK/
FOR OFFICE USE ONLY
Nagesien: Ja/Nee
Checked: Yes/ No
Is besware ingedien? Ja/Nee
Were objections received?Yes/No
Handtekening van Eksekuteur/
Gemagtigde Agent

Boedelkontroleur/Estate Controller Signature of Executor/Authorised
Agent
Datum/Date Datum/Date

[Page ANX22]
Annexure A16
Nextofkin affidavit

[Page ANX23]

[Page ANX24]
Annexure A17
Power of attorney to pass bond
Prepared by me,
CONVEYANCER
POWER OF ATTORNEY
(In terms of section 38, 43 and/or 44 of Act 66 of 1965)
I, the undersigned hereby nominate, constitute and
appoint with power of substitution,
to be my true and lawful Attorney, in my name, place and stead, to appear before the
Registrar of Deeds at
and then and there as my Attorney and Agent to acknowledge a debt due by me to the
Master of the High Court ( Division),
in the sum of R ( Rand
cents) of lawful money arising
from the considerations hereinafter mentioned, and to register a Mortgage Bond for the said
amount under renunciation of the legal exceptions non numeratae pecuniae non causa
debiti, errore calculi and revision of accounts, with the full force and effect of all of which I
am fully acquainted, and any other exception which might be pleaded in law to the payment
of the said amount or any part thereof, payable to the said Master, his order or assigns, for
which payment to be well and truly made,
I,
hereby give and grant to my said Attorney(s) power and authority to bind specially
as a Mortgage:
WHEREAS, from the liquidation and distribution account dated
of the estate of the late it appears that the
undermentioned become entitled to movable property
reflected at the sum of R ( Rand
cents).
AND WHEREAS it is necessary to secure payment of the said sums of money or delivery of
the said other property to the said when
become lawfully entitled thereto as set
out hereunder opposite names viz:
DESCRIPTION OF PROPERTY
Value as at date of death
which sums of money or other movable property the Appearer qq engages to pay or to
deliver to each of the said
[Page ANX25]
when legally claimable, or to the said Master if called upon sooner to pay the same to him.
If I fail to pay the amount due within 30 days from date of notice of calling up, interest, in
the discretion of the Master, at the rate of 6% per annum will become payable as from date
of such notice to date of payment.
The value of the movable property other than cash as at the date when it becomes
lawfully claimable, shall be fixed by an appraiser or any other person appointed by the
Master for this purpose.
If my Estate be placed under sequestration the amount owing under this bond shall
become payable and interest at the rate of 6% per annum thereon from the date of
sequestration shall be payable.
I shall insure and keep insured for the value thereof the Buildings, and improvements
now on the mortgaged property or hereafter erected thereon (unspecified by the Master),
with an Insurance Company approved by the Master. I undertake to cede the policy or
policies of such insurance with all rights to the Master as further collateral security and to
give proof of the payment of the premiums of insurance to the Master as and when they fall
due.
Should this condition not be strictly complied with, the Master shall have the right to call
up the Mortgage Bond.
For the purposes of this bond and any proceedings which may be instituted by virtue
hereof and of the service of any notice, I hereby choose domicilium citandi et executandi at
NOW, THEREFORE, the condition of the Bond to be passed as above set forth shall be
such that if I, my Executors, Administrators, or Assigns shall well and truly pay, or deliver
or cause to be paid, or delivered to each of the said children the inheritance due to them as
aforesaid (unless I have been called upon sooner to pay the sum to and shall have paid the
Master), then in such case the said bond or obligation shall be null and void, but otherwise
shall be and remain in full force, virtue and effect.
AND generally, for effecting the purposes aforesaid, to do whatsoever shall be requisite
as fully, amply and effectually for all intents and purposes whatsoever, as I might or could
do, if personally present; hereby ratifying, allowing, and confirming and promising and
agreeing to ratify, allow and confirm all whatsoever my said Attorneys shall lawfully do or
cause to be done by virtue of these presents.
SIGNED AT on the day of 19
AS WITNESSES:
1
2
[Page ANX26]
Annexure A18
Redistribution agreement
REDISTRIBUTION AGREEMENT: ESTATE LATE JEMIMA CLARA SMITH
Memorandum of agreement made and entered into by and between
PETER JAMES SMITH, ANDY JOHN SMITH and JAMES HILTON SMITH
major heirs of the deceased, and
ANDY JOHN SMITH
in his capacity as Executor in the estate of the late JEMIMA CLARA SMITH by virtue of Letters of Executorship no.
6509/2012.
WHEREAS the fixed property in the estate known as:
The Remaining Extent of Portion 1 of the farm Hillside, Registration Division JR Gauteng
Measuring 36,8177 hectares
(hereinafter referred to as the PROPERTY)
has been bequeathed to the said major heirs in specific portions in terms of the Will of the deceased dated the 14th
of June 2010, and
WHEREAS the responsible Minister has turned down an application to subdivide the property into the portions
stipulated in the Will, and
WHEREAS the said Minister has agreed to a subdivision of the said property to comply with the special bequest as
set out in clause 7 (b) of the said Will of the deceased, on condition that the said subdivision be consolidated with
the adjoining property of the said PETER JAMES SMITH as more fully specified in Consent 1724 dated 20 May 2005,
NOW THEREFORE the parties to this agreement agree as follows:
1 That the said fixed property be awarded as follows:
1.1 A portion measuring approximately 2 (TWO) hectares, but subject to actual surveying, to the said PETER
JAMES SMITH.
1.2 The remaining portion of the said property to the said JAMES HILTON SMITH.
2 That the costs of the subdivision of the property including the fees and disbursements of the Land Surveyor,
be borne by the said PETER JAMES SMITH and JAMES HILTON SMITH proportionately to the value of the
property awarded to them.
3 That the costs of the transfer of the subdivided properties and the consolidation be borne by the parties
concerned.
[Page ANX27]
4 That the said JAMES HILTON SMITH shall pay an amount of R300 000,00 (THREE HUNDRED THOUSAND RAND)
to the said ANDY JOHN SMITH in lieu of the special bequest as set out in clause 7 (d) of the said Will, which
amount shall be paid upon registration of the property in his name and for which amount a guarantee shall be
presented to the said ANDY JOHN SMITH before date of registration.
The parties acknowledge that they are aware that this Redistribution Agreement is subject to confirmation by the
Master of the High Court.
SIGNED at on this day of 2012.
AS WITNESSES:
1
2
PJ SMITH
HEIR
AS WITNESSES:
1
2
AJ SMITH
HEIR/EXECUTOR
AS WITNESSES:
1
2
JH SMITH
HEIR
Note:
The "responsible Minister" will presently be the Minister responsible for Land Administration and for Agriculture.
[Page ANX28]
Annexure A19
Adiation
ESTATE LATE PAUL HENRY JONES MASTER'S REFERENCE 12257/2010
I, the undersigned,
MARY JOANNA JONES
(née MCGREGOR)
do hereby declare that I am fully aware of my rights to adiate or to repudiate according to my own free will and that
I know and understand the legal and practical effects thereof. I hereby confirm that I elect to adiate under the joint
will executed by me and my late husband PA U L HENRY JONES on the 14th October 2008, in terms of which the
following dispositions were made:
A To GERALD PETER JONES, our major son:
Certain portion 3 of the farm ONVERWACHT
no 642 (a portion of portion 2), Registration
Division IQ HELD under deed of transfer
no 1234/72, dated 14 May 1972 R350 000,00
B To ARCHIBALD JONES, our major son:
Cash R100 000,00
C To JENNIFER CAMPBELL, (née MCGREGOR) our major daughter:
2005 Toyota Camry YCT872GP R121 000,00
Signed at POTCHEFSTROOM on this 18th day of April 2011.
AS WITNESSES:
2
MJ JONES
HEIR
I, the undersigned,
GERHARDUS JACOB SWIECHERS
do hereby certify that all the implications and legal effects of adiation was duly explained to MARY JOANNA JONES,
that she declared herself to be fully aware of her rights and the consequences of her action, that she duly
considered the matter, understands the implications thereof and, having taken everything into account, decided to
adiate.

GJ SWIECHERS
Practising Attorney Pretoria
[Page ANX29]
Annexure A20
Dealing with movable property in a deceased estate
The handling of movable assets such as household effects, furniture, implements/tools/instruments, jewellery,
clothing, motor vehicles, paintings and works of art and livestock, follows a fixed pattern and may be summarised as
follows:
1 DESCRIPTION
A General rule
With movables comprising several loose items, each and every item is not described separately. A mere reference to
the category of property however, (eg furniture and household effects), will not be sufficient and a concise
description is required.
The following may serve as examples:
(i) household effects consisting of cutlery, kitchen utensils and linen,
valued at R2 750,00
(ii) furniture consisting of a diningroom lounge and two bedroom
suites, valued at R5 500,00
(iii) livestock consisting of 300 merino sheep (2 months wool) and
2 merino rams, valued at R24 000,00
B Exceptions
Each of the following items, should however be specifically mentioned:
(i) items which are specially bequeathed;
(ii) items which the executor suspect may cause a dispute amongst the beneficiaries;
(iii) items with a special intrinsic value, eg stinkwood furniture, family heirlooms, original works of art by prominent
artists, valuable jewellery, etc;
(iv) motor vehicles;
(v) firearms (please note that the heir cannot automatically assume that the authorities will grant him the
required license. He would have to apply for a new license in his own name and that the application might not
be approved).
2 APPRAISALS
Appraisals are based upon market value, ie the value is estimated according to the price which the property may
fetch at a public auction. It is advisable to have items which are separately reflected in the account, individually
valued.
A Best proof of value
General rule
A valuation done by a sworn appraiser
[Page ANX30]
Exceptions
In respect of certain valuations requiring special expertise or specialised knowledge in a particular field, the
appraisal of an expert is accepted and sometimes even insisted upon.
Examples are:
(i) jewellery made in gold, silver, diamonds or other exclusive stones or materials a jeweller
(ii) antiques a dealer in antiques or an acknowledged expert in this field
(iii) original works of art an acknowledged dealer in this field
B Discretionary proof of value
General rule
(i) A valuation under oath by two independent outsiders.
(ii) The value as reflected in the inventory or a nominal value proposed by the executor.
(iii) Valuation by a dealer trading in the specific type of asset, eg a furniture store, dealer in motor vehicles, farmer
(in respect of livestock) and an auctioneer (in respect of goods which he often handles as part of his trade).
Exceptions
(i) In respect of assets which are as a rule extremely valuable, only best proof of value is accepted, eg jewellery
or original works of art.
(ii) Assets which generally only have a small or merely sentimental value, need not be accounted for or may be
reflected at nominal value without having to obtain a formal valuation thereof. Examples at this juncture are
ordinary clothing (not fur coats or expensive leather jackets, of course), inferior household effects or imitation
costume jewellery.
3 METHODS OF LIQUIDATION
Problems cropping up in respect of movable property are usually twofold:
A Minor beneficiaries
General rule
Movable property is not awarded to a minor, unless there are good reasons for doing so. The proper way usually is
to either sell the assets, arranging a redistribution agreement or a taking over by a surviving spouse in terms of
section 38 of the Administration of Estates Act, in order that the cash which becomes due to the minor can be paid
into the guardian's fund. Reference should also be made to the Maintenance of Surviving Spouses Act, No. 27 of
1990.
Exceptions
(i) Extremely valuable assets, such as jewellery or original works of art which are specially bequeathed to a minor,
are usually awarded to his/her [Page ANX31] guardian who can put it in safekeeping with a bank or similar
institution until the child is capable to take possession thereof. Assets of this nature are never accepted in the
guardian's fund by the Master and the necessary arrangements for proper and adequate security must be
made (section 43 of the Administration of Estates Act).
(ii) There are sometimes special circumstances in that the minor may already have attained the age of discretion
and independence and he/she can use the asset beneficially. With proper motivation, the asset may then be
awarded to the minor.
B Undivisibility of the assets
(i) Where the assets are specially bequeathed, they are awarded and there are no problems.
(ii) If the executor is capable of effecting a distribution and an award on an equal basis which is to the satisfaction
of everybody concerned, he acts accordingly. If this is not possible, a written redistribution agreement or a
section 38takeover is often necessary.
(iii) If it is essential for one reason or the other, or the executor is compelled by testamentary provisions or by
instructions of the beneficiaries, the assets are sold.
4 ESTATE DUTY
Where movable property is sold by way of a bona fide transaction in the course of liquidating the estate, the selling
price constitutes the dutiable value. Otherwise the appraisal which was accepted by the Master, will be the value
for estate duty purposes.
[Page ANX32]
Annexure A21
Calculation of estate duty: an outline
(Compiled by WM van der Westhuizen)
A In broad outline, estate duty in terms of the Estate Duty Act 45 of 1955 is calculated as follows where the
deceased was married out of community of property and profit and loss (including cases where the accrual system
applied to the marriage):
All property of the deceased which is his property at the date of his death: s 3(2)
PLUS
All property that is deemed to be property of the deceased: s 3(3)
LESS
Deductions in terms of section 4, including capital gains tax payable: s 4(b)
=
Net value of estate
LESS
R3,5 million rebate: s 4A
=
Dutiable amount
Each of the above is now dealt with in more detail.
1 Property that is property at date of death (section 3(2))
1.1 All assets reflected in the liquidation account
PLUS
1.2 All fiduciary, usufructuary and similar rights calculated according to a certain formula: s 3(2)(a) and 5(1)(b)
PLUS
1.3 Any right to an annuity calculated according to a certain formula: s 3(2)(b) and 5(1)(c) and (d)
LESS
1.4 Certain exceptions provided for in s 3(2)(c)(h)
[Page ANX33]
2 Property that is deemed to be property section 3(3))
2.1 Proceeds of all life assurance policies, less all premiums paid by someone else than the insured to the latter's
benefit, together with interest on such premiums at 6%: s 3(3)(a)
LESS
2.2 Proceeds of all life assurance policies payable to a spouse or a child in terms of an antenuptial contract: s 3(a)
(i)
LESS
2.3 Proceeds of "keyperson" policies and policies taken out to acquire the deceased's interest in a partnership or
his interest in a company or close corporation: s 3(3)(a)( iA) and s 3(3)(a)(ii)
PLUS
2.4 Lump sum benefits paid by any fund because of the death of the deceased, less all premiums paid by someone
other than the insured to the latter's benefit, together with interest on such premiums at 6%: s 3(3)(a)(bis)
PLUS
2.5 The value of all donations mortis causa s 3(3)(b)
PLUS
2.6 The value of an accrual claim against the estate of a predeceased spouse: s 3(3)(cA)
PLUS
2.7 Property of which the deceased was immediately prior to his death competent to dispose for his own benefit or
for the benefit of his estate: s 3(3)(d) and s 3(5).
3 Rebates in terms of section 4
3.1 Funeral, tombstone and deathbed expenses as allowed: s 4(a)
3.2 All debts, including capital gains tax payable: s 4(b) and 4( f )
3.3 All administration costs allowed by the Master, including valuation costs: s 4(c)
3.4 All property outside the RSA, eg inherited from a nonresident: s 4(e)
3.5 Certain limited interests which were donated to the deceased: s 4(g)
3.6 Bequests to public benefit organisations: s 4(h)
3.7 The increase in value resulting from improvements effected to property (including property subject to a limited
interest by a beneficiary to whom such property will accrue): s 4( i ) and 4( j )
[Page ANX34]
3.8 The amount of an accrual claim against the estate by a surviving spouse: s 4(1A)
3.9 The value of a usufruct or an annuity from a predeceased spouse: s 4(m)
3.10 Books, paintings, statuary etc that were lent to the State, a local authority or certain institutions for a period
of time in terms of a notarial deed: s 4(o)
3.11 Rebates to prevent double duties: s 4(p)
3.12 The value of a bequest or accrual to a surviving spouse, subject to certain conditions: s 4(q)
4 Rebate in terms of section 4A
An amount of R3 500 000 (three million five hundred thousand rand)
5 Other rebates
5.1 Rebate in respect of successive deaths occurring within certain periods (proviso to the first schedule of the
Estate Duty Act)
02 years 100% rebate
24 years 80% rebate
46 years 60% rebate
68 years 40% rebate
810 years 20% rebate
10 years and longer 0% rebate
5.2 Transfer duty already paid: s 16(a)
5.3 Foreign tax already paid: s 16(c)
B Where parties were married in community of property, estate duty is calculated only upon half of the joint
estate.
If one or both spouses owned assets which are excluded from the joint estate, estate duty will be calculated at the
death of that spouse upon the full value of the asset/s concerned and not upon one half of the value. The
calculation of estate duty where the deceased was married in community of property will be calculated, in broad
outline, as follows:
1 Property of deceased in terms of section 3(2)
1.1 Assets as per liquidation account
LESS
1.2 Proceeds of life assurance policies paid to the estate
=
1.3 Total value of joint estate
÷ 2
[Page ANX35]
1.4 One half ascribed to deceased by virtue of marriage in community of property
PLUS
1.5 The full value of assets referred to in A 1 2 and A 1 3 above
2 Property deemed to be property of the deceased in terms of section 3(3)
2.1 The proceeds of life assurance policies and lump sum benefits less one half of all premiums plus 6% interest if
the surviving spouse is the beneficiary (see A 2 1 to A 2 4 above). If the premiums were paid by an outsider who
is also the beneficiary, the full amount of all premiums paid plus 6% interest is deductible
PLUS
2.2 One half of the value of all donations mortis causa as referred to in A 2 5 above.
PLUS
2.3 The full value of property, excluding the surviving spouse's half of the community estate, of which the deceased
was competent to dispose (see A 2 7 above)
3 Rebates in terms of section 4
3.1 The full value of funeral costs (see A 3 1 above)
3.2 The full value of the administration costs (see A 3 3 above). (There seems to be some uncertainty in this
regard)
3.3 One half of all debts (see A 3 2 above)
3.4 One half of the value of property outside the RSA (see A 3 4 above)
3.5 The full value of certain limited interests donated to the deceased (see A 3 5 above)
3.6 The full value of bequests to public benefit organisations (see A 3 6 above)
3.7 One half of the increase in value resulting from improvements to property mentioned in A 3 7 above
3.8 The full value of a usufruct or annuity from a predeceased spouse (see A 3 9 above)
3.9 One half of the value of books, etc lent under a notarial deed to the State or a local authority (see A 3 10
above)
3.10 The full rebate to avoid double duties (see A 3 11 above)
3.11 The full value of a bequest or accrual to a surviving spouse: s 4(q) (see A 3 12 above)
[Page ANX36]
4 Rebate in terms of section 4A
An amount of R3 500 000 (three million five hundred thousand rand)
5 Other rebates
The other rebates enumerated in A 5 1 to A 5 3 above apply mutatis mutandis to a marriage in community of
property.
Persons liable for estate duty
(Section 11 of the Estate Duty Act)
Section Type of property Person liable

Fiduciary right, usufruct or other like The person upon whom the right
3(2)(a) interest in property, including an devolves at the death of the
annuity charged upon any property deceased
An annuity not charged upon any
The person to whom the right to
3(2)(b) property which accrues to somebody
the annuity accrues
else at the death of the deceased
The person to whom the
3(3)(a) A life insurance policy
proceeds of the policy is paid
The person to whom payment
3(3)(a)(bis) Payment by any fund
was made
3(3)(b) Donation mortis causa The donee
Other All other property The executor
[Page ANX37]
Annexure A22
Liquidation and distribution account
Introducing an example of a first and final liquidation and distribution account in a relatively uncomplicated estate.
PARTICULARS
John Smith died at Polokwane on 18 May 2012, without leaving a will. He is survived by his wife, Mary Smith, to
whom he was married out of community of property with exclusion of the accrual system, their major son Henry, and
Peter, who had been adopted by John and Mary during their marriage and who is still a minor. At the date of John's
death, his estate had the following assets and liabilities:
ASSETS
1 The family home, which is registered in John's name.
2 A money market account with ABC Bank in the amount of R275 614,00.
3 Two life insurance policies which paid out amounts of R450 000 and R550 000 respectively, with no specific
beneficiaries nominated.
LIABILITIES
1 Dr PJ Moloi, medical practitioner: R386,00
2 Polokwane Hospital: R750,00
3 Protea Pharmacy: R614,00
4 Acme Funeral Services: R6 200,00
. The surviving spouse wants the house to be sold, as she is looking for a smaller place of abode in view of her
husband's demise.
The liquidation and distribution account may be drawn as follows:
[Page ANX38]
FIRST AND FINAL LIQUIDATION AND DISTRIBUTION ACCOUNT IN THE ESTATE OF THE LATE JOHN SMITH
(IDENTITY NO 491518 5014 08 8) WHO DIED ON 18 MAY 2012 AND WHO WAS MARRIED OUT OF
COMMUNITY OF PROPERTY EXCLUDING THE ACCRUAL SYSTEM.
MASTER'S REFERENCE NO: 12257/2012
LIQUIDATION ACCOUNT
R R
ASSETS
1. FIXED PROPERTY REALISED:
Erf 246, Polokwane, Limpopo Province
Held under deed of transfer 6789/97

Dated 17 June 1997
Sold by private treaty for (1) 800 000,00
2. CLAIMS IN FAVOUR OF THE ESTATE
2.1 ABC Bank

Money Market Account no 46742 (2) 275 614,00
2.2 Proceeds of Life Policy no P/77705/X with

DEF Insurance Company Limited (3) 450 000,00
2.3 Proceeds of Life Policy no P/37204/PI with

GHI Insurance Company Limited (4) 550 000,00
(Proceeds of Life Insurance Policies collected by

executor and paid into estate bank account)
2 075 614,00
LIABILITIES
1. ADMINISTRATION COSTS
1.1 Advertisements
Creditors: section 29
Limpopo Herald R165,00 (5)
Government Gazette R18,00 173,00
Account for inspection
Limpopo Herald R165,00 (6)
Government Gazette R18,00 173,00
1.2 Provision for Bank charges 100,00
1.3 Provision for postages and petties 30,00
1.4 Master's fees: maximum 600,00
1.5 Executor's remuneration
3,5% on R2 075 614,00 72 646,00
[Page ANX39]
2. CLAIMS AGAINST THE ESTATE
2.1 Dr PJ Moloi (7) 386,00
2.2 Polokwane Hospital (8) 750,00
2.3 Protea Pharmacy (9) 614,00
2.4 Acme Funeral Services (10) 6 200,00
81 672,00 2 075 614,00
BALANCE FOR DISTRIBUTION 1 993 942,00
2 075 614,00 2 075 614,00
RECAPITULATION STATEMENT
Total cash in estate 2 075 614,00
Less: Liabilities 81 672,00
Cash available for distribution 1 993 942,00
2 075 614,00 2 075 614,00
DISTRIBUTION ACCOUNT
R R
Balance for distribution 1 993 942,00
Distributed as follows in terms of the Intestate Succession

Act 81 of 1987:
1. To Mary Smith, surviving spouse: a child's share in
terms of section 1(1)(c)(i)
664 647,34
The award consists of cash
2. To Henry Smith, major son: a child's share in
terms of section 1(1)(c)(ii)
664 647,34
The award consists of cash
3. To Peter Smith, minor adopted son: a child's share
in terms of section 1(4)(e)(i)
The award consists of cash and is to be paid into
664 647,34
the Guardian's Fund un terms of section 43(6) of
the Administration of Estates Act 66 of 1965
1 993 942,00 1 993 942,00
[Page ANX40]
INCOME AND EXPENDITURE ACCOUNT
There was no income or expenditure after death
FIDUCIARY ASSETS ACCOUNT
There are no fiduciary assets in the account
ESTATE DUTY
Property of the deceased in terms of section 3(2)
Total value of assets as per liquidation account 2 075 614,00
Less: proceeds of life policies collected by executor 1 000 000,00
1 075 614,00

Add: Property of the deceased in terms of section

3(2)
Proceeds of all domestic policies on the life of the
1 000 000,00
deceased:
GROSS DUTIABLE ESTATE 2 075 614,00

Less: Deductions in terms of section 4:
Section 4(a): funeral expenses 6 200,00
Section 4(b): other creditors 1 750,00
Section 4(c): administration costs, including

executor's remuneration 73 122,00
Section 4(d): Master's fees 600,00
Section 4(q): Inheritance surviving spouse 664 647,00 764 319,00
NETT DUTIABLE ESTATE 1 329 295
Less: Rebate in terms of section 4A 3 500 000,00
NO DUTY

PAYABLE
[Page ANX41]
CERTIFICATE BY EXECUTOR
I, the undersigned,
MARY SMITH
in my capacity as executrix in the estate of the late JOHN SMITH hereby declare that:
1. the above account is to the best of my knowledge and belief a true and proper account of the liquidation and
distribution of the estate, and that
2. to the best of my knowledge and belief, all the assets and income collected subsequent to the death of the
deceased to the date of the account have been disclosed therein.
Signed on this 12th day of August 2012.

M. SMITH: EXECUTRIX
NOTES
1 The surviving spouse of a deceased person who dies intestate and who is also survived by children, is entitled
to a child's share or R250 000,00, whichever is the greater amount. The amount of R250 000,00 is the amount
presently fixed by the Minister of Justice in the Gazette and it is respectfully submitted that the amount should
be reviewed and substantially increased in view of the erosion thereof by inflation since the original
determination by the Minister.
2 A child's share is determined by dividing the distributable estate by the number of children surviving the
deceased, plus one the surviving spouse is therefore practically included as an "extra child". The distributable
amount in the above example is therefore divided by three (two children plus the surviving spouse) and
because onethird thereof is greater than R250 000,00, the surviving spouse inherits a child's share as
contemplated in the Act. The present amount of R250 000,00 as determined by the Minister therefore also has
a detrimental effect on the extent of an intestate inheritance by a surviving spouse in such instances.
3 In cases of relatively uncomplicated estates such as the above example, the Master may possibly exercise his
discretion to reduce the executor's remuneration in terms of section 51(3)(a) of the Administration of Estates Act.
4 In view of the fact that the above account is an illustrative example only, fictitious amounts with regard to items
such as advertising costs, transfer, costs, banking costs, etc have been used. These costs vary from time to
time in any event (eg, the costs for advertising in the Government Gazette for creditors and the account for
inspection presently amount to R26,60 per placement. Advertising costs in newspapers may vary from R150,00
to R300,00 per placement, depending on whether the paper circulates locally, regionally or nationally).
[Page ANX42]
Annexure A23
Liquidation and distribution account
Introducing an example of a more complex estate with limited interests ceasing, a surviving spouse as residuary
heir and estate duty payable.
THE ESTATE OF THE LATE CORNELIUS JACOBUS VAN DER MERWE
1 The abovementioned person died in the Tshwane Hospital on 5 September 2011 after a car accident. He was
53 years old and during his lifetime he lived in Potchefstroom, where he was employed as personnel manager
of an engineering company. He was married out of community of property on 10 December 1982 to CORNELIA
JACOBA VAN DER MERWE (née COLLINS), who survives him. The accrual system was not applicable to the
marriage. The deceased is also survived by his two children, namely:
a married son, JAN HERMANUS VAN DER MERWE
a married daughter, JACOBA HERMIENA GREYLING (née VAN DER MERWE)
2 You are a professional person and consulted by the surviving spouse. She had been nominated as executrix in
her late husband's will and she asks you to wind up the estate on her behalf. She furnishes the following
particulars regarding her late husband's affairs:
2.1 Assets
2.1.1 A dwelling house in BAILLIE PARK, POTCHEFSTROOM, where the deceased and his wife lived.
2.1.2 The deceased was the registered owner of plot 16, VYFHOEK AGRICULTURAL HOLDINGS, district
POTCHEFSTROOM. This plot is worth R330 000 and was rented by the deceased to one James
Cunningham for a period of five years in terms of a written deed of lease dated 1 February 2011.
The rental amounts to R700 per month, payable in advance. The rental for September 2011 was
handed by the lessee to the widow on 27 September 2011.
2.1.3 The deceased was the registered owner of an agricultural holding near PIENAARSRIVIER, district of
PRETORIA, which [Page ANX47] was sold by him to one JOHN CUMMINGS in terms of an instalment
sale. The deed of sale is dated 1 June 2012, in terms of which the purchase price of R500 000 is
payable as follows:
a deposit of R200 000 at the signing of the deed of sale on 1 June 2012;
the balance of R300 000 is payable in yearly instalments of R60 000 as from 1 June 2012 and
the outstanding balance due from time to time is subject to interest at the rate of 8% per
annum.
2.1.4 The deceased inherited the family farm, RUE OF THE LAND BANK, district PARYS, ORANGE FREE
STATE from his father, GERT VAN DER MERWE, who died in 1984. GERT VAN DER MERWE'S will
provided that the farm should pass at the death of Cornelius Jacobus van der Merwe to the latter's
son, JAN HERMANUS VAN DER MERWE, who will be 30 years old at his next birthday. This farm is
presently worth R1 800 000. JAN HERMANUS VAN DER MERWE is already farming on the property
and had effected improvements to the property in the amount of R120 000.
2.1.5 The deceased and three of his friends had registered a close corporation a few years ago, and
each one of them has a member's share of 25% (twentyfive percent). By means of this closed
corporation, "WE SHOVE SOIL TO AND FRO CC" they conducted earth moving and excavation
operations for construction companies. The value of each member's share is presently valued at
R30 000 (thirty thousand rand) (the CC owns fixed property and heavy equipment) and the
deceased's loan account according to the latest financial statements amounts to R86 000. The four
members have insured the lives of one another for R150 000 for the purpose of buying the share of
a deceased member.
2.1.6 The deceased had the following cash and investments:
a fixed deposit in the amount of R150 000 at STANDARD BANK. The period of investment is from
1st March 2012 until 30 April 2015 and the interest rate is 6%;
a credit balance amounting to R1 600 on his credit card account with NEDBANK, Potchefstroom.
2.1.7 The deceased was a member of his employer's pension fund scheme and it appears that a lump
sum payment amounting to R350 000 is payable to his widow, as well as an annuity of R36 000 per
year for life.
[Page ANX48]
2.1.8 The deceased further belonged to his employer's group life insurance scheme. An amount of
R250 000 is payable to his widow in terms of the provisions of the scheme.
2.1.9 The deceased had the following life insurance policies:
2.1.9.1 Federal and Colonial for an amount of R100 000. This policy had been donated by the
deceased to the surviving spouse in their Antenuptial Contract and was duly ceded to her
in pursuance of the contract.
2.1.9.2 Provincial and National for an amount of R50 000. The annual premium of R75 is payable on
1 February and the premium for 2001 has not yet been paid. This policy was ceded to the
Nedbank as security for the deceased's overdraft facility.
2.1.9.3 Western Insurance Company for R100 000. The deceased took out this policy on his life at
the birth of his youngest daughter Doreen, and she is the beneficiary under this policy.
2.1.10 The deceased owned the following movable property:
a 2008 Mercedes Benz 230 E Sedan;
a 2009 Toyota LDV;
two custom built hunting rifles and an automatic pistol;
an antique "Grandfather" clock which he inherited from his grandmother;
a registered Brahman bull, stabled on the farm at Parys, Orange Free State.
2.2 Liabilities
2.2.1 The deceased's cheque account at the NEDBANK shows a debit of R18 000.
2.2.2 His income tax return for the 2012/2013 fiscal year is yet to be prepared.
2.2.3 The widow hands over the following sundry accounts:
Pretoria Hospital: R2 415,16
Sunnyside Pharmacy: R 218,24
Dr J Horwitz: R 812,86
Edgars Stores: R 114,33
Kyalami Motors: R 316,92
3 The widow hands you the deceased's will, which provides as follows:
3.1 a cash legacy of R5 000 is bequeathed to the Kagiso Study Trust Fund.
[Page ANX48(1)]
3.2 the dwelling house in BAILLIE PARK, POTCHEFSTROOM goes to his wife, and she informs you that she
wants the house to be sold because she wants to take a flat rather than stay on in the house.
3.3 the plot at VYFHOEK, POTCHEFSTROOM, is bequeathed to his daughter
3.4 the Brahman bull together with all motor vehicles and firearms are bequeathed to his son (please note the
requirements for new licenses which will apply to the heir)
3.5 the residue of the estate goes to his wife.
[Page ANX49]
The liquidation and distribution account may be drawn as follows:
FIRST AND FINAL LIQUIDATION AND DISTRIBUTION ACCOUNT IN THE ESTATE OF THE LATE CORNELIUS JACOBUS VAN
DER MERWE, IDENTITY NUMBER 430504 5016 007, WHO DIED ON 5 NOVEMBER 2011, MARRIED OUT OF COMMUNITY
OF PROPERTY WITHOUT THE ACCRUAL SYSTEM.
Master's Reference: 20341/2011
LIQUIDATION ACCOUNT
R R
ASSETS
IMMOVABLE PROPERTY
Certain erf 142
Situate in the township of BAILLIE PARK,

Registration Division IQ, North West
Measuring 1650 (one thousand six hundred and

fifty) square metres
Held under deed of transfer no 48311/1968, dated 5

October 1968
Sold by private treaty to JH Steyn as instructed by
the surviving spouse as legatee in terms of the
clause 4 of the will (1) 350 000,00
Certain piece of land being portion 6 of the farm

VYFHOEK 317 (a portion of portion 10)
Situate in the district of Potchefstroom, Registration

Division IQ
Measuring 23 (twenty three) hectares
Held under deed of transfer no 9148/1978 dated 16

June 1968
Valued at (2) 330 000,00
(Awarded and to be transferred to JACOBA
HERMINA GREYLING (née VAN DER MERWE),
eldest daughter, in terms of clause 5 of the will)
Certain lot 15, PIENAARSRIVIER SMALL HOLDINGS
Situate in the district of PRETORIA, Registration

Division JR Gauteng
Measuring 21,462 (twenty one comma four six two)

hectares
Held under deed of transfer no. 1492/1980
Sold on instalments to JOHN CUMMINGS for (3) 500 000,00
[Page ANX50]
and to be transferred to him on payment of the
purchase price of which R260 000 has been paid
on account (contra item (32) below)
MOVABLE PROPERTY
MOTOR VEHICLES AND FARMING IMPLEMENTS
2008 Mercedes Benz 230 E Sedan, registration
number LJJ148T 280 SE Sedan, registration no
HNX 550 T
valued at (4) 25 000,00
2009 Toyota LDV, registration number JKR128T
valued at (5) 20 000,00
FIREARMS
,375 Calibre Holland en Holland rifle:
manufacturer's serial number 892735 and 50
rounds of ammunition
valued at (6) 4 500,00
,308 Calibre Musgrave rifle:
manufacturer's serial number 735408 and 30
rounds of ammunition
valued at (7) 3 500,00
,45 Calibre Colt pistol:

manufacturer's serial number AR4325
valued at (8) 750,00
SUNDRY MOVABLE ASSETS
Registered Brahman stud bull "Spurius Maximus II"
valued at (9) 60 000,00
(Items (4) to (9) are awarded and to be transferred
to JAN HERMANUS VAN DER MERWE, eldest son,
in terms of clause 6 of the will.)
Antique "Junghans" Grandfather clock valued at (10) 30 000,00
(Awarded and to be delivered to the surviving
spouse as residuary heir in terms of clause 7 of the
will)
MEMBER'S SHARE IN CLOSE CORPORATION
Member's share of 25% in "WE S H O V E S O I L TO A N D
FR O" C C : a s h e l d b y t h e d e c e a s e d i n t e r m s o f

Member's Share Certificate no 003 dated 16
November 1980
Sold for (11) 30 000,00
[Page ANX51]
CASH AND CASH INVESTMENTS
Nedbank Limited, PO T C H E F S T R O O M Credit Balance

on credit card account no. 5273802471220
(12) 1 600,00
Standard Bank, POTCHEFSTROOM:
Fixed deposit: R150 000 at 16% interest in terms of
certificate no 1468 for 5 years ending 31 August
2013
Capital R150 000,00
Interest to date of death R58 633,30 208 633,30
As per certificate of balance (13)
(The investment is not realised and is awarded and
to be ceded to the surviving spouse as residuary
heir in terms of clause 7 of the will.)
CLAIMS IN FAVOUR OF THE ESTATE
Loan Account: "We Shove Soil To and Fro: CC (14) 86 000,00
(Collected and deposited in estate bank account.)
LIFE INSURANCE POLICIES
Provincial and National Life Assurance Co: Policy no

185746x42
As per letter dated 9 September 2013 (15) 50 000,00
TOTAL ASSETS 1 699 983,00
LIABILITIES
ADMINISTRATION CHARGES
ADVERTISEMENTS:
Debtors and Creditors:
Potchefstroom Herald (16) 100,00
Gazette 18,00
Account for inspection:
Potchefstroom Herald (17) 100,00
Gazette 18,00
Master's fees 600,00
Executor's remuneration 59 499,41
Provision for bank charges, postage and petties 100,00
[Page ANX52]
Valuation charges:
PJ Steyn (18) 1 200,00
AJ Bel (19) 200,00
"The Powder Keg" (20) 40,00
Brahman Breeders Association of S.A. (21) 75,00
Ye Olde Antique Shoppe (22) 50,00
Provision for transfer costs:
Item (2) to legatee (23) 1 400,00
CLAIMS AGAINST THE ESTATE
Funeral expenses: Sunset Burials CC (24) 2 800,00
SA Revenue Services:
Income Tax, as per assessment (25) 13 000,00
Nedbank Limited, as per certificate of:
Balance (26) 18 000,00
Edgars Stores (27) 114,33
Kyalami Motors (28) 316,92

LAST SICKBED:
Tshwane Hospital (29) 2 415,16
Sunnyside Pharmacy (30) 218,00
Dr J Horwitz (31) 812,86
OTHER LIABILITIES
Claim by J Cummings for property item (3) sold to
him and to be transferred to him on payment of
the full purchase price of R500 000,00 (3)
Less: capital outstanding as at date of death:

R240 000 (32) 260 000,00
Provincial and National Life Assurance Co:

outstanding annual premium for 2013 50,00
As per letter dated 24 August 2013 (15) 75,00
TOTAL LIABILITIES EXCLUDING ESTATE DUTY 361 202,68
ESTATE DUTY PAYABLE BY THE ESTATE 32 071,00
BALANCE FOR DISTRIBUTION 1 306 709,70
1 699 983,30 1 699 983,30
[Page ANX53]
RECAPITULATION STATEMENT
R R
Total cash as per items (1), (11), (12), (14) and (15) 517 600,00
Liabilities (except estate duty) R361 202,68
Estate Duty: R32 071,00
R393 273,68
Less: contraitem (32) R260 000,00 133 273,68
Cash legacy 5 000,00
Balance cash 379 380,32
517 600,00 517 600,00
DISTRIBUTION ACCOUNT
R R
1 TO: The KAGISO STUDY TRUST FUND

cash legacy in terms of clause 3 of the will 5 000,00
2 TO: J A C O B A H E R M I N A G R E Y L I N G ( n é e V A N D E R
MERWE), married in community of property to

PETER GREYLING: item (2) in terms of clause 5 of
330 000,00
the will
3 TO: JAN HERMANUS VAN DER MERWE, major son: items

(4)(9) in terms of clause 6 of the will 113 750,00
4 TO: C O R N E L I A J A C O B A V A N D E R M E R W E ( n é e
COLLINS), surviving spouse, the residue of the
estate as follows:
claim in respect of item (3) less
counterliability (item 32) 240 000,00
item (10) 30 000,00
item (13) 208 633,30
Cash 379 326,32
1 306 709,00 1 306 709,00
INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD
5 NOVEMBER 2011 TO 4 AUGUST 2012
R R
INCOME
Rental collected: J Cunningham for period 5

November 2011 to 4 August 2012
as per certificate of balance (33) 700,00
Interest on credit card account:
as per certificate of balance (12) 52,14
[Page ANX54]
R R
EXPENDITURE
Executor's remuneration: 6% on income 45,12
Balance awarded to residuary heir 707,02
752,14 752,14
FIDUCIARY ASSETS ACCOUNT
Fiduciary asset held by deceased as fiduciary heir, pursuant to the will of the late GERT VAN DER MERWE, who died at Parys,
Orange Free State on 18 August 1984 and whose estate was reported to the Master of the High Court at Bloemfontein:
reference no 2487/1984.
IMMOVABLE PROPERTY
Certain piece of land being the remainder of the farm RU E

O F T H E LA N D B A N K no 147,
Situate in the district of Parys, Registration Division HQ
Measuring 1800 (one thousand eight hundred) hectares
Held under deed of transfer no 1426/1958 dated 15 May

1958
Valued at (33) 1 800 000,00
LIABILITIES
Sworn Appraiser's Fees (34) 2 700,00
Executor's remuneration 45 000,00
Balance to distribution account 1 752 300,00
1 800 000,00 1 800 000,00
FIDUCIARY ASSETS DISTRIBUTION ACCOUNT
R R
Asset item (33) to be transferred to fideicommissary heir
1 800 000,00
Nett amount due as per distribution account 47 700,00
1 800 000,00 1 800 000,00
[Page ANX55]
FIDUCIARY ASSETS RECAPITULATION STATEMENT
R R
Value of fiduciary asset to be transferred to
fideicommissary
1 800 000,00
heir
Nett amount due as per distribution account 1 752 300,00
Cash to be paid in as per distribution account 47 700,00
ADD:
Pro rata share of estate duty as per estate duty

apportionment account 191 921,00
Total cash to be paid in 239 621,00
ESTATE DUTY ACCOUNT
R R
PROPERTY IN TERMS OF SECTION 3(2)
Value of assets as per liquidation account 1 699 983,00
Less: proceeds of life insurance policy (15) 50 000,00
1 649 983,00
Value of fiduciary interest ceasing:
annual value: 12% × R1 800 000,00
Annual value: = R216 000,00
Age fideicommissary heir next birthday: 30 years
Age factor x annual value:

8,22894 x R 216 000,00 = 1 777 019,00
8,22894 x R 216 000,00 = 3 427 002,00
PROPERTY IN TERMS OF SECTION 3(3)
Proceeds of all domestic insurance policies:
Provincial and National (15) 150 000,00
Western Insurance Company (35) 100 000,00
Payment by Funds at or as result of the death of the

deceased:
XYZ Pension Scheme (employer):
Lump sum payment to surviving spouse (36) 350 000,00
XYZ Group Life (employer):
Payable to surviving spouse (37) 250 000,00
GROSS DUTIABLE ESTATE 4 277 002,00
DEDUCTIONS IN TERMS OF SECTION 4
Last illness and funeral expenses, debts and
administration costs as per liquidation account:
section 4(a)4(c) 361 202,00
[Page ANX56]
Bequest for educational purposes
section 4(h) 5 000,00
Increase in value of fiduciary interest due to improvements

by fideicommissary heir:
section 4( j ) (calculations as per annexure)
246 808,00 613 010,00
3 663 922,00
BEQUEST TO SURVIVING SPOUSE AS RESIDUARY HEIR:
section 4(q)
Net dutiable estate without rebate in terms of section 4(q) 3 663 922,00
Less: Bequest to surviving spouse *890 030,00
Less: Total value of all payments by Funds accruing to
surviving spouse 600 000,00 1 490 030,00
NET DUTIABLE ESTATE THEREFORE 2 173 962,00
Less: Rebate in terms of section 4A **1 000 000,00
DUTIABLE AMOUNT THEREFORE 1 173 962,00
Estate duty hereon at 20% R234 792,40
NOTES
* The bequest to the surviving spouse for purposes of the section 4(q) deduction is calculated as follows:
Less: liabilities excluding estate duty R361 202,00
R1 338 780,00
Less: special bequests R448 750,00
Residue to surviving spouse R890 030,00
** The rebate was increased to R3 500 000 on 1 March 2007. Applied to the above illustrative example, the increased
rebate exceeds the net dutiable amount, with the result that no estate duty is payable.
[Page ANX57]
APPORTIONMENT OF LIABILITY FOR ESTATE DUTY
R R
Total estate duty payable 234 792,00
1 JH VAN DER MERWE:
As beneficiary of fiduciary interest ceasing

191 921,00

2 DOREEN VAN DER MERWE
As beneficiary under domestic policy

10 800,00

3 THE ESTATE
The balance 32 071,00
234 792,00 234 792,00
EXECUTOR'S CERTIFICATE
I, the undersigned,
CORNELIA JACOBA VAN DER MERWE (née COLLINS)
in my capacity as executrix testamentary in the estate of the late CORNELIUS JACOBUS VAN DER MERWE, hereby
declare that, to the best of my knowledge and belief, the above represents a true and proper account of the
liquidation and distribution of this estate and that all the assets and income collected subsequent to the death of
the deceased to the date of this account have been disclosed therein.
Signed at Potchefstroom this 12th day of AUGUST 2012.

pp CJ VAN DER MERWE
Executrix Testamentary
[Page ANX58]
ANNEXURE TO ESTATE DUTY ACCOUNT
Calculation of rebate claimed in terms of section 4(j):
Annual value of property with improvements:
R1 800 000 × 12% = R216 000,00
Annual value of property without improvements:
R1 550 000 × 12% = R186 000,00
Difference in annual value as result of improvements = R30 000,00
Capitalised value of difference deductible in terms of section 4(j):
8,22694 × R30 000,00 = R246 808,20
[Page ANX59]
Annexure A24
Notice of liquidation and distribution account lying for inspection
Pursuant to the provisions of section 35(5) o f A c t 66 of 1965, notice is hereby given that the first and final
liquidation and distribution account in the estate of the late JOHN SMITH identity no 400605 5016 002 and who died
at Potchefstroom on 18 May 2012, Master's reference number 12257/2012 is lying for inspection at the offices of the
Master of the High Court, Pretoria and the Magistrate's Office, Potchefstroom, for a period of 21 days as from the
date of publication hereof.
PO Box 1234
Noordbrug
2522
[Page ANX60]
Annexure A25
Deeds office practice: Documents in support of estate transfers
Estate transfers are often rejected at deeds registries because practitioners are not always aware of which
documents, peculiar to an estate transfer, are required.
Obviously, the documents to be lodged will depend largely on the causa of the transfer and thus all the possible
documents relevant to specific types of estate transfer are discussed.
Testate succession
1 A copy of the will, duly endorsed by the Master of the High Court as having been accepted, must be lodged.
2 A certificate by a conveyancer in terms of s 42(1) of the Administration of Estates Act 66 of 1965, must be given.
3 If the heirs have entered into a redistribution agreement, a copy of such agreement, duly accepted by the Master
of the High Court, must be lodged.
4 If massing is involved, and the surviving spouse has adiated the terms of the will, proof of the adiation is
necessary. This can be proved by a statement from the surviving spouse or a conveyancer's certificate (reg 50(2)(b)
of the Deeds Registries Act 47 of 1937). If, however, the surviving spouse has signed the power of attorney in her
capacity as executrix, no proof of adiation is required.
5 If in the will of a testator the heirs are not mentioned by name, their identity must be proved. In the case of
immediate descendants or ascendants, a copy of the testator's death notice of a certificate of nextofkin will
suffice. In the case of any other heirs, a certificate of nextofkin must be lodged.
6 If any heir has waived or repudiated his/her inheritance or legacy, a copy of such waiver or repudiation must be
lodged.
7 If a personal servitude is bequeathed to the surviving spouse of a marriage in community of property, proof of
such marriage must be lodged or the servitude must be created notarially see in this regard RCR 8 of 1989.
8 If a bequest is subject to the payment of a bequest price or subject to a suspensive condition, proof must be
lodged that the beneficiary has accepted the bequest subject to the bequest price or suspensive condition. A
written acceptance or a certificate by the conveyancer will suffice.
9 If it is alleged that one of the heirs has died prior to the testator's death, proof of such death must be lodged.
10 If it is alleged that the person to whom a personal servitude has been bequeathed has died, proof of the death
must be lodged.
[Page ANX61]
11 If the causa of the transfer is one whereby the surviving spouse is entitled to a onehalf share by virtue of the
marriage in community of property and the other onehalf share in terms of a will subject to a testamentary
condition, proof that the marriage is one in community of property is necessary in order to determine that only one
half share of the land is subject to the testamentary condition see in this regard RCR 8 of 1989.
Intestate succession
1 Proof must be furnished that the deceased died intestate. A death notice, or other proof provided by the master,
will suffice.
2 Proof of who the intestate heirs are. The death notice will suffice for the immediate descendants and immediate
ascendants of the deceased. If heirs are further related, an affidavit of nextofkin must be lodged.
3 A certificate by a conveyancer in terms of s 42(1) of the Administration of Estates Act, must be lodged.
4 Proof of any waiver or repudiation of an inheritance must be lodged.
5 If the intestate heirs entered into a redistribution agreement, such agreement, duly accepted by the master,
must be lodged.
6 If it is alleged that the spouse was married, and in view of the marriage the spouse is entitled to the property in
terms of the provisions of the Intestate Succession Act, No. 81 of 1987, proof of such marriage must be lodged.
(Note: If a deceased died intestate after 18 March 1988, the provisions of the Intestate Succession Act, 1987 will
apply.)
7 If the succession is dependent on the balance of the estate being available for distribution, such balance for
distribution must be proved by lodging the liquidation and distribution account.
Sale by a deceased during his lifetime
Proof that the master has no objection to the transfer must be lodged in terms of s 42(2) of the Administration of
Estates Act. Normally the master will endorse the power of attorney to pass the transfer in this regard. The
Registrar of Deeds will normally not effect the registration of the transfer without this endorsement (by the Master
in terms of s 42(2)) on the power of attorney.
Donation by a deceased during his lifetime
The conveyancer must provide the Registrar of Deeds with proof that the land donated was accounted for in the
liquidation and distribution account free of any objection see in this regard s 42(1) of the Administration of Estates
Act.
Sales by the executor
1 Proof must be lodged that the master has no objection to the transfer see "Sale by a deceased during his
lifetime" above.
[Page ANX62]
2 If the executor is selling the land to pay estate debts or in terms of a deceased insolvent estate, proof of this
must be lodged by virtue of a certificate by the master, conveyancer or executor see in this regard reg 50(2)(a) of
the Deeds Registries Act, 1937.
3 If the land is being purchased by the executor or his spouse, parent, child, partner, employer, employee or
agent, proof must be lodged that the master has consented to and ratified such sale see s 4 9 o f t h e
Administration of Estates Act.
Taking over under s 38 of Act 66 of 1965
1 Authorization by the master must be lodged in terms of s 38 of the Administration of Estates Act. This can be
effected either by having the power of attorney to pass transfer endorsed by the master confirming such
authorization or, in the case where a bond is to be registered simultaneously in favour of the master, by lodging his
written authorization.
2 Proof must also be lodged that the person taking over the property is in fact the surviving spouse of the
deceased. A marriage certificate will suffice, unless the title deed is registered in the name of both spouses married
in community of property.
Documents filed in the office of the Master of the High Court must be certified as true copies by the master and
not by a conveyancer, notary or attorney see in this regard the provisions of RCR 31/88.
AS West, Chief:
Deeds Training, Justice
College, Pretoria
De Rebus, November 1991 785786
[Page ANX63]
Annexure A26
Application for endorsement in terms of section 45 of Act 47 of 1937
Prepared by me,
CONVEYANCER
WL JANSE VAN RENSBURG
We, the undersigned
MAGRIETIS MARA VAN DER WIELEN
Identity Number 440808 0034 003
unmarried
in my capacity as
(i) Executrix Testamentary in the ESTATE OF THE LATE LOUIS JEAN VAN DER WIELEN in terms of Letters of
Executorship 4336/2012 issued to me by the Master of the High Court at PRETORIA on 29 July 2012
and
(ii) in my personal capacity as surviving spouse of the aforesaid deceased to whom I was married in community of
property;
DO HEREBY APPLY to the Registrar of Deeds at PRETORIA in terms of section 45 o f A c t 37 of 1937 f o r t h e
endorsement of the following Title Deed namely:
Deed of Transfer T40684/86
in respect of the following property namely:
PORTION 1 OF ERF 1024, situate in WAVERLEY (PTA) Township, Registration Division JR Gauteng
IN EXTENT 1351 (ONE THOUSAND THREE HUNDRED AND FIFTY ONE) square metres
to the effect that:
Identity Number 440808 00 34 00 3
unmarried
is entitled to the said property and that she may deal with the said property as if she had already taken transfer
from the aforesaid deceased of the share in her name being:
1 ONE HALF SHARE in terms of my marriage in community of property to the said deceased; and
2 ONE HALF SHARE in terms of the Mutual Will and Testament of the said deceased and said surviving spouse dated
at PRETORIA on the 1st of November 1993.
[Page ANX64]
SIGNED AND DATED at on the
AS WITNESSES:
1
[Page ANX65]
Annexure A27
Power of attorney to transfer
Klagsbrun De Vries Inc Prepared by me
3rd Floor
Hatfield Plaza
1122 Burnett Street
HATFIELD
0083
..........................
Conveyancer
De Lorenzo PS
POWER OF ATTORNEY TO PASS TRANSFER
I, the undersigned
John McKay
in my capacity as Executor in the
Estate Late Helen Kramer
acting under Letters of Executorship Number 21447/2013
issued by the Master of the North Gauteng High Court at Pretoria on
11 September 2013
do hereby nominate and appoint
Paula Sharon De Lorenzo and/or Henry Davis
with power of substitution to be my Agent, to appear at the Office of the Registrar of Deeds at Pretoria or
elsewhere and then and there to act as my Attorney and Agent and to declare that:
WHEREAS the Late Helen Kramer whom was married out of community of property to Merwyn Julie Kramer and died
on the 17 June 2013;
WHEREAS in terms of Clause 3.1 of the Last Will and Testament of the late Helen Kramer dated 3 December 2008,
the undermentioned property was bequeathed by the late Helen Kramer to Merwyn Julie Kramer;
NOW THEREFORE I do hereby authorise and empower my said attorney and agent to pass transfer to:
Merwyn Julie Kramer
widower
[Page ANX66]
the property described as:
Portion i of Erf 29 Nieuw Muckleneuk Township Registration Division J.R., Province of Gauteng;
Measuring 897 (Eight Hundred and Ninety Seven) Square Metres
Held by Deed of Transfer Number T 21194/2005
SUBJECT TO the following condition contained in Clause 6 of the aforesaid Last Will and Testament which reads as
follows
"Any benefit conferred on any beneficiary in terms of this Will shall be absolutely excluded from any community of
property or joint estate, shall not be taken into account in determining accrual in the estate of any beneficiary who
may at any time be married according to the accrual regime, and in the case of a female beneficiary, shall not be
subject to the marital power of any spouse."
And acknowledging the value of the property to be the sum of R1 550 000,00 (One Million Five Hundred and Fifty
Thousand Rand).
And further cede and transfer the said property in full and free property to the said transferee/s, to renounce all the
right, title and interest which the Estate heretofore had in and to the said property, to promise to free and warrant
the said property, and also to clear the same from all encumbrances and hypothecations according to law, to draw,
sign and pass the necessary acts and deeds, or other instruments and documents, and generally for effecting the
purposes aforesaid, to do or cause to be done whatsoever shall be requisite, as fully and effectually, to all intents
and purposes as I might or could do if personally present and acting herein; hereby ratifying, allowing and
confirming all and whatsoever my attorney and agent shall lawfully do or cause to be done in the premises by virtue
of these presents.
Executed at Pretoria on ........................in the presence of the
undersigned witnesses.
AS WITNESSES:
1 .......................... ..................
EXECUTOR
2 ..........................
[Page ANX67]
Annexure A28
3rd Floor
Hatfield Plaza
1122 Burnett Street
HATFIELD
0083
..........................
Conveyancer
De Lorenzo PS
I, the undersigned
Andre De Vries
in my capacity as Executor
in the
Estate Late Etienne Louis LeebDu Toit
acting under Letters of Executorship Number 6185/2012 issued by
the Master of the North Gauteng High Court at Pretoria on
12 July 2012
do hereby nominate and appoint Paula Sharon De Lorenzo and/or Henry Davis arid/or Theodorus Johannes
Kleinhans
with power of substitution to be my Agent, to appear at the Office of the Registrar of Deeds at Johannesburg or
elsewhere and then arid there to act as my Attorney and Agent and to declare that
WHEREAS the Late Etienne Louis LeebDu Toit died on the 23 February 2012 and in terms of the Last Will and
Testament dated 12 February 2004 of the said late Etienne Louis LeebDu Toit, the undermentioned property was
bequeathed to Alcuin Vincent Botha, Gregory Marcellus Botha and Christiane Frédérique Botha;
1. Alcuin Vincent Botha
Unmarried
2. Gregory Marcellus BOTHA
Unmarried
3. Christiane Frédérique Botha
Unmarried
[Page ANX68]
the property described as:
Erf 335 Montgomery Park Township Registration Division L.Q., Province of Gauteng;
Measuring 744 (Seven Hundred and Forty Four) Square Metres
Held by Deed of Transfer Number T93101/1977
And Acknowledging the Value of the Property to be the Sum of R750 000,00
(Seven Hundred and Fifty Thousand Rand)
and further cede and transfer the said property in full and free property to the said transferee/s, to renounce all the
of these presents.
Executed at Pretoria on ..................in the presence of the undersigned witnesses.
AS WITNESSES:
1 .......................... ..................
EXECUTOR
2 ..........................
[Page ANX69]
Annexure A29
3rd Floor
Hatfield Plaza
1122 Burnett Street
HATFIELD
0083
..........................
Conveyancer
De Lorenzo PS
I, the undersigned,
Pieter Johannes Jacobus Joubert,
in my capacity as
Executor in the Estate of the Late
Maria Magdalena Joubert
acting under Letters of Executorship Number 7082/2013 issued by the Master of the High Court of South Africa
(North Gauteng High Court, Pretoria) at Pretoria on 7 May 2013
do hereby nominate and appoint Paula Sharon De Lorenzo and/or Steven Julius Saul Klagsbrun andlor Henry John
Davis
with power of substitution to be my Agent, to appear at the Office of the Registrar of Deeds at Pretoria or
elsewhere and then and there to act as my Attorney and Agent and to declare that:
WHEREAS the Late Maria Magdalena Joubert, Widow, died on the 6 April 2013; and
AND WHEREAS in terms of Clause 5 of the Will dated 28 December 2004 of the Late Maria Magdalena Joubert, she
bequeathed her entire estate, inclusive of the undermentioned property to her children, Pieter Johannes Jacobus
Joubert and Margaretha Louisa De Beer in equal shares. Her aforesaid heirs (children) subsequently entered into a
Redistrubition Agreement dated at Pretoria on 30 June 2013 in terms of which the property was awarded to Pieter
Johannes Jacobus Joubert.
SUBJECT TO Clause 7 of the aforesaid Will which reads as follows:
"Ek bepaal dat geen voordeel wat enige egunstigde kragtens hierdie testament toekom deel sal uitmaak van enige
gesamentlike of gemeenskaplike boedel van sodanige begunstigde nie, maar die aparte, afsonderlike en uitsluitlike
eiendom van sodanige begunstigde sal wees en bly en ingeval enige sodanige begunstigde in gemeenskap van
goedere getroud is of mag trou dan sal sodanige voordeel uitdruklik uitgesluit word uit die gemeenskap van
goedere en in die geval van enige vroulike gebunstigde sal sodanige voordeel verder vry wees van die kontrole en
maritale magte van haar eggenoot."
[Page ANX70]
Pieter Johannes Jacobus Joubert
married Out of Community of Property
A Unit consisting of
(a) Section No. 62 as shown and more fully described on Sectional Plan No SS 642/2001 in the scheme known as
FAERIE GLEN RENAISSANCE in respect of the land and building or buildings situate at ERF 3781 FAERIE GLEN
EXTENSION 45 TOWNSHIP, THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY, of which section the floor
area, according to the said sectional plan is 165 (One Hundred and Sixty Five) square metres in extent and
(b) An undivided share in the common property in the scheme apportioned to the said section in accordance with
the participation quota as endorsed on the said sectional plan.
Held by Deed of Transfer Number ST 23443/2001
And acknowledging the value of the property to be the sum of R1 500 000,00 (One Million Five Hundred Thousand
Rand)
And further cede and transfer the said property in full and free property to the said transferee/s, to renounce all the
of these presents.
Executed at Pretoria on ...................in the presence of the undersigned witnesses.
AS WITNESSES:
1 .......................... ..................
EXECUTOR
2 ..........................
[Page ANX71]
Annexure A30
3rd Floor
Hatfield Plaza
1122 Burnett Street
HATFIELD
0083
..........................
Conveyancer
Paula Sharon De Lorenzo
I, the undersigned
John McKay
in my capacity as Executor in the
Estate of the Late James Richard Kirk
Acting under Letters of Executorship Number 14702/2013 issued by the
Master of the South Gauteng High Court at Johannesburg on the 20th June 2013
do hereby nominate, constitute and appoint Paula Sharon De Lorenzo and/or Henry John Davis
with power of substitution to be the true and lawful Attorney/s and Agent/s of the Transferor to appear before the
Registrar of Deeds at Pretoria and there to declare that:
The Late James Richard Kirk died (testate) on 17 May 2013;
AND WHEREAS the late James Richard Kirk sold the undermentioned property during his lifetime on 3l January 2013
to:
Nomonde Mjoli
Unmarried
for the sum of R1 425 000,00 (One Million Four Hundred and TwentyFive Thousand Rand) the belowmentioned
property,
A Unit consisting of
(a) Section No. 2 as shown and more fully described on Sectional Plan No. SS 24111990 in the scheme known as
Aquilalaan 301 in respect of the land and building or buildings situate at Portion 1 of Erf 1794 Waterkloof
Ridge, Local Authority: City of Tshwane Metropolitan Municipality, of which section the floor area, according to
the said sectional plan is 160 (One Hundred and Sixty) square metres in extent; and
[Page ANX72]
(b) an undivided share in the common property in the scheme apportioned to the said section in accordance with
the participation quota as endorsed on the said sectional plan.
Held by Deed of Transfer Number ST 61300/1991
therefore further to cede arid transfer the said property in full and free property to the said Transferee; to renounce
all right, title and interest which the Transferor heretofore had in and to the said property, to promise to free and
warrant the said property and also to clear the same from all encumbrances and hypothecations according to law,
to draw, sign and pass the necessary acts and deeds, or other instruments and documents; and generally, for
effecting the purposes aforesaid, to do or cause to be done whatsoever shall be requisite, as fully and effectually,
to all intents and purposes, as the Transferor might or could do if personally present arid acting therein; hereby
ratifying, allowing and confirming all and whatsoever the said Agent/s shall lawfully do or cause to be done in the
premises by virtue of these presents.
Signed at Pretoria on ....................in the presence of the undersigned witnesses.
AS WITNESSES:
1 .......................... ..................
John McKay
2 ..........................
[Page ANX73]
Annexure A32
Illustrative example: Estate duty
INTRODUCING THE DRAFTING OF AN ESTATE DUTY ADDENDUM IN
A RELATIVELY UNCOMPLICATED ESTATE
John Smith died on 18 May 2012 and you are furnished with the following details regarding his estate
1 He was the registered owner of a dwelling house valued at R280 000 (two hundred and eighty thousand rand).
2 His motor vehicles, a motor car and a bakkie, are valued at R43 000 (forty three thousand rand).
3 He was the proud owner of two custom built hunting rifles valued at R16 000 (sixteen thousand rand).
4 His cash investments at various financial institutions as at the date of his death amounted to R200 000 (two
hundred thousand rand).
5 In the antenuptial contract concluded between the deceased and his wife, who survives him, he donated an
existing life policy on his own life, the proceeds of which amounts to R100 000 (one hundred thousand rand).
The policy was duly ceded to his wife in terms of the antenuptial contract shortly after the conclusion of the
marriage.
6 Over and above the policy referred to in 5 above, there had been the following life assurance policies on the
deceased's life
6.1 Ocean Guarantee Ltd for R200 000 (two hundred thousand rand). The deceased's only daughter is named
as the beneficiary in terms of this policy and the company in question had paid the aforesaid amount
directly to her after his demise.
6.2 Federal and Colonial for R250 000 (two hundred and fifty thousand rand). No beneficiary was named in this
policy; John Smith merely took out the policy in his own name.
7 The deceased was a member of his employer's pension and group life assurance scheme which paid out the
following amounts directly to his surviving spouse
7.1 Pension fund: a lump sum of R300 000 (three hundred thousand rand).
7.2 Group life scheme: R275 000 (two hundred and seventy five thousand rand).
8 The deceased's will provides for the following bequests
8.1 The house goes to his surviving spouse, with whom he was married out of community of property with the
exclusion of the accrual system.
[Page ANX74]
8.2 The rifles go to his nephew.
8.3 A cash legacy of R50 000 to the Kagiso Trust.
8.4 The residue of the estate to his daughter.
9 John Smith's total debts at the date of his death amount to R17 000 (seventeen thousand rand). The quotation
from the burial society "Most Sincere Condolences (Pty) Ltd" to handle the deceased's burial amounts to R2 400
(two thousand four hundred rand) and the family attorney is prepared to wind up the estate for a nominal fee
of R3 000 (three thousand rand), as a token of respect towards the deceased (this is far lower than the
statutory percentage of 3,5% plus VAT that he would normally be allowed to charge for the winding up of a
deceased estate.
REQUIRED:
Prepare an estate duty account in terms of regulation 5(1)(h).
ESTATE DUTY ACCOUNT: THE LATE JOHN SMITH
Property in terms of section 3(2):
Total value of assets as per liquidation account 809 000
Less: Proceeds of life policy: Federal & Colonial 250 000
559 000
Property deemed to be property in terms of section

3(3)
Proceeds of all domestic insurance policies 550 000
Less: Policy donated to surviving spouse in terms of ante
nuptial contract (s 3(3)(a)(i)) 100 000 450 000
Payments by funds on or as a result of the death of the

deceased
Pension scheme: R300 000
Group insurance: R275 000 575 000
Gross dutiable estate 1 584 000
Rebates in terms of section 4
Section 4(a): Funeral and deathbed expenses 2 400
Section 4(b): Debts and liabilities 17 000
Section 4(c): Administration and liquidation costs 3 000
Section 4(h): Bequests to Kagiso Trust 50 000
Section 4(q): Value of property accruing to surviving
spouse:
280 000
Bequests in terms of will 927 400
575 000
Payments by funds
Net dutiable estate 656 600
Rebate in terms of section 4A* 3 500 000
No estate duty payable
* Since 1 April 2007 the rebate in terms of section 4A has been increased to R3 500 000.
[Page ANX75]
Annexure A33
Application to the Master for extension of the period for submitting the liquidation and distribution account
The Master of the High Court
Private Bag X60
PRETORIA
0001
Dear Sir/Madam
ESTATE LATE JOHN SMITH: 1234/2012
Application is hereby made for extension of the statutory period for submission of the first and final liquidation and
distribution account in the above estate for a further period of six months or such other period as you may
determine at your discretion. In order to enable you to consider the application, the following information in terms of
regulation 6 is supplied:
(a) It is not possible to submit the account within the statutory period and the reasons are as follows:
(i) The formal submission of a claim by the Land Bank, who is a major creditor of the estate, is still awaited.
(ii) The final assessment in respect of income tax has not yet been received from SARS.
(iii) You will note from the inventory that the deceased held shares with several listed companies. Some of
these companies no longer exist or had been taken over. Certain share certificates appear to be lost
and the enquiries that had to be made in that connection took longer than expected.
(b) The following steps were taken to expedite the submission of the account and the following progress was
made:
(i) As far as (a)(i) and (a)(ii) are concerned, letters have been addressed to the creditors involved,
requesting them to attend to the filing of their claims as a matter of urgency.
(ii) As far as (a)(iii) is concerned, we have now been advised after lengthy correspondence with XYZ
Registrars and the ACE Investment Corporation of the procedures to be followed in the various
instances and we are in the process of attending thereto.
(c) The following progress has been made in the liquidation and realisation of the estate:
(i) The advertisements in terms of section 29(1) of the Act appeared on 17 August 2012 and proof of
advertisement has been received.
[Page ANX76]
(ii) All the estate assets have been appraised and the valuations received.
(iii) The proceeds of all life assurance policies are collected and where applicable, have either been
deposited in the estate bank account or paid out by the insurers concerned directly to the surviving
spouse as the nominated beneficiary.
(d) The following monies have been deposited in the estate banking account, which was opened in terms of
section 28(1) of the Act.
Received from Amount
Sanlam 19 420,16
Old Mutual 30 618,22
Liberty Life 28 716,38
Good Health Medical Scheme 2 688,71
Mpumalanga Wattle Growers 104,58
Total 81 548,05
(e) An interim account referred to in section 35(2) of the Act should not be submitted in view of the fact that the
estate has a cash deficit that will either be covered by the surviving spouse or by a sale of estate assets in
collaboration with the surviving spouse as sole beneficiary.
(f) The estate is solvent.
Yours faithfully
XYZ
[Page ANX77]
Annexure A34
SARS: Estate Duty Notice
Amendments to sections 4A, 9A, 12 and 19 of the Estate Duly Act, 1955, were inserted by the Taxation Laws
Amendment Act, Act No. 17 of 2009 and the Taxation Laws Second Amendment Act. Act No 16 of 2009, which were
promulgated in Government Gazette Nos. 32610 and 32811, both dated 30 September 2009.
Taxation Laws Amendment Act, Act No. 17 of 2009 amendment of section 4A
The legal text can be found in section 5 of the said Amendment Act which reads as follows:
"Dutiable amount of an estate
4A. (1) Subject to subsections (2) and (3), the dutiable amount of the estate of any person shall be determined by
deducting from the net value of that estate, as determined in accordance with section 4, an amount of R3,5 million.
(2) Where a person was the spouse at the time of death of one or more previously deceased persons, the dutiable
amount of the estate of that person shall be determined by deducting from the net value of that estate, as determined in
accordance with section 4, an amount equal to the amount specified in subsection (1)
(a) multiplied by two; and
(b) reduced by the amount deducted from the net value of the estate of any one of the previously deceased persons
in accordance with this section.
(3) Where a person was one of the spouses at the time of death of a previously deceased person, the dutiable amount
of the estate of that person shall be determined by deducting from the net value of that estate, as determined in
accordance with section 4, an amount equal to the sum of
(a) the amount specified in subsection (1); and
(b) the amount specified in subsection (1) divided by the number of spouses, reduced by an amount which is
determined by dividing the amount deducted, in accordance with subsection (1), from the net value of the estate
of the previously deceased person by the number of spouses of that previously deceased person.
(4) The amount contemplated in subsection (2)(b) or (3)(t) shall not exceed the amount specified in subsection (1).
(5) Subsections (2) and (3) shall not apply unless the executor of the estate of that person submits, at the time and in
the manner and form prescribed by the Commissioner, to the Commissioner a copy of a return submitted to the
Commissioner in terms of section 7 in respect of the estate of the previously deceased person."
After determining the net value of an estate (property plus deemed property less liabilities and deductions in terms
of section 4 of the Act) a fixed amount in terms of section 4A is deducted from the net value of the estate to
establish the "dutiable amount of the estate" on which 20% estate duty is levied. As from 1 March 2007 this
amount is R3 500 000.
[Page ANX78]
In terms of the amendment to section 4A, the deduction is increased if the deceased was the spouse of one (or
more) previously deceased persons. In such cases the dutiable amount of that estate is determined by subtracting
the R3,5 million multiplied by two from the net value of the estate. This amount (R7 000 000) must, however, be
reduced by the value of the deduction which was deducted from the net value of the predeceased spouse in terms
of the section 4A deduction as applied at the date of death of the predeceased spouse. In cases where there were
more than one previously deceased spouse, the executor has the choice to use the amount so deducted in any one
of the predeceased spouses estates.
Example 1 Section 4A(2)
Phillip died on 5 January 2010.
He was married to Jane who died on 15/8/2005 (during that time the section 4A deduction was R1 500 000). The
net value of her estate was R650 000. In reducing the dutiable amount in her estate to R Nil; R650 000 of the
section 4A deduction was used.
On 7/10/2007 Phillip was married to Dawn who died on 28/12/2008 in a car accident. The net value of her estate
amounted to R2 500 000. The section 4A deduction on date of her death was R3 500 000; R2 500 000 of the
section 4A deduction was therefore used in her estate.
The section 4A deduction in Phillips estate will be:
R3 500 000 x 2 = R7 000 000 (4A(2)(a))
Less: R650 000 or R2 500 000 (4A(2)(b))
The executor in Phillips estate has the choice to reduce the R7 000 000 (section 4A(2) deduction) either by R650
000 (4A deduction used in Jane's estate) or R2 500 000 (used in Dawn's estate) to determine the deduction in
terms of section 4A(2) in Phillip's estate.
In order to use the deduction in terms of section 4A(2), the following requirements must be complied with:
. In terms of subsection (4), the amount contemplated in subsection (2)(b) may not exceed the amount
specified in subsection (1).
. In terms of subsections (5) the executor of the second dying spouse's estate must submit a copy of the return
prescribed by the Commissioner in terms of section 7 of the Act in respect of the estate of the previously
deceased person.
John had 3 wives in terms of a customary marriage. He died prior to 1/1/2010 and his estate used R500 000 of the
section 4A deduction to reduce the dutiable amount of the estate to R Nil. His wife, Sarah, died on 5/1/2010 and left
an estate of R5 million.
[Page ANX79]
The section 4A deduction in her estate will be:
The sum of section 4A(1) + [4A(3)(a) less 4A(3)(b)]
R3 500 000 + [R3 500 000 + 3 less R500 000 + 3]
R3 500 000 + RI 166 667 less R166 667
R3 500 000 + RI 000 000
R4 000 000
Cobus had 5 wives, he died prior to 2010 and his estate used R3 million of the section 4A deduction in his estate.
One of his wives, Susan, died on 8 January 2010 and left a net estate of R7 000 000.
Section 4A deduction in her estate:
The sum of section 4A(1) + [4A(3)(a) less 4A(3)(b)]
R3 500 000 + [R3 500 000 + 5 less R3 000 000 5]
R3 500 000 + [R700 000 R600 000]
R3 500 000 + R100 000
R3 600 000
To be enable to use the deduction in terms of section 4A(3), the executor must comply with the following
requirements (same as section 4A(2)):
. In terms of subsection (4), the amount contemplated in subsection (3)(b) may not exceed the amount
specified in subsection (1).
. In terms of subsection (5) the executor of the second dying spouse's estate must submit a copy of the return
prescribed by the Commissioner in terms of section 7 in respect of the estate of the previously deceased
person.
As the amendments inserted in section 4A (subsections (2) to (5)) only deal with the cases where spouses' are
involved the estates of persons who died on or after 1 January 2010 and who were not involved in such a
relationship, are still only entitled to a deduction in terms of section 4A amounting to R3 500 000.
The abovementioned amendments came into operation on 1 January 2010 and apply in respect of the estate of a
person who dies on or after that date. The effective date applies to the date of death of the second dying spouse.
Taxation Laws Second Amendment Act, Act No. 18 of 2009
The legal text which reads as follows can be found in sections 3, 4 and 5 of the said Amendment Act:
3. (1) Section 9A of the Estate Duty Act, 1955, is hereby amended by the substitution for paragraph (i) of the proviso of
the following paragraph:
"(i) after the expiration of: [five years from the date of the assessment notice In terms of which any value or amount
which should have been assessed to duty under such assessment was not so assessed or In terms of which the amount
of duty assessed was less than the amount of such duty which was properly chargeable.]
(aa) three years from the date of a notice of assessment issued in terms of section 9(3) or 9(4)(c); or
(bb) five years from the date on which a notice of assessment is deemed to have been issued as contemplated in section
9(4)(a) or 9(4)(b), unless the Commissioner is satisfied that the fact that the value or amount which should have been
assessed to duty was not so assessed or the fact that the full amount of duty chargeable was not assessed, was due to
fraud or misrepresentation or nondisclosure of material facts; or".
[Page ANX80]
Section 9A of the Act deals with the issuing of additional estate duty assessments issued according to the following
circumstances:
. In cases where an assessment has been issued. SARS has a period of 3 years after date of assessment to
request the reopening of the assessment.
. If, however, the deemed provisions for the issuing of the assessment applied, the period for the issuing of an
additional assessment remains five years determined from the deemed date.
. In cases where fraud, misrepresentation or nondisclosure of material facts are the reason for the additional
assessment, there is no time limit on the reopening of the assessment.
This amendment came into operation on 30 September 2009 (date of promulgation of this Act).
4. (1) Section 12 of the Estate Duty Act, 1955, is hereby amended by the substitution for the proviso of the following
proviso:
"Provided that the liability under this section of any executor shall be a liability in his or her capacity as executor only and
for an amount not exceeding the available assets In the estate unless the liability is due to fraud.".
The words "unless the liability is due to fraud" which is added to the proviso to the section, is the only amendment
to this section.
The amendment came into operation on 30 September 2009 (date of promulgation of this Act).
5. (1) The Estate Duty Act, 1955, is hereby amended by the repeal of section 19.
The amendment to section 12 must be read together with the repeal of section 19 of the Act. The rule imposing
personal as well as joint and several liability on every executor who pays over or parts with the possession or
control of any property under his/her administration is hereby repealed. The executors' liability will only extend
beyond the value of the available estate assets if he is engaged in fraud (proviso to section 12). The exception for
fraud is consistent with the rules relating to fraud contained in the Administration of Estates Act, 1985. This
amendment came into operation on 30 September 2009.
(Ms) CJ Marx
For COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICES
ACCRUAL SYSTEM 123
assets excluded 124
indexation of 126
claims for accrual 922
commencement values of spouses' estates 124
payable accrual claim allowed deduction from gross value estate 126
precedence of accrual claims 125
ADIATION
certificates 65 612 113
requirements 63
definition 63
example 64
explanation to beneficiaries 63 65
requirements for massing 66 612
ADVERTISEMENTS
costs
liquidation and distribution accounts 83
Government Gazette 26
exemption: section 18(3) estates 83
liquidation and distribution accounts
for inspection 23 24
documents needed 114
permission granted by the Master 2449 94
proof of 49 113 114 ANX59
newspaper 26
area where deceased resident 12 months before death 26
publication on Friday 83
public auctions 511
AGENTS
appointment by executors
payment from own remuneration 85
AGRICULTURE
land: subdivision 58
valuations
Development Facilitation Act 67 of 1995 ANX7
Land Bank valuations 46
Land Reform (Labour Tenants) Act 3 of 1996 17
livestock: valuation 79
minister ANX27
ANNUITIES
beneficiary 917
continuity 917
definition 916
duty
calculation 917 918
liability
against capital funds 917
against property 916
obligation to pay 916
paid out by a pension fund as defined in s 1 of the Income Tax Act 58 of 1962
not part of dutiable estate 918
retirement annuities: disbursements
definition as property for estate duty purposes 96
specific disbursements
lump sum payments
estate duty 916 to 919
periodic payments
estate duty 916 to 919
calculation 918
payment from trust assets or trust funds 917
property 916 to 919
definition in terms of Estate Duty Act 45 of 1955 96 921
test to qualify as such 920 921
specific annuities
charged upon a person 919
creation 918
definition of property in terms of Estate Duty Act 45 of 1955 95
charged upon property 918 919
creation 916
in predeceased spouses' estates 933
rebates in determining estate duty 930(3)
definition of property in terms of Estate Duty Act 45 of 1955 95
rebates in determining estate duty 930(3) 930(4)
requirements 930(3) 930(4)
payments, by pension funds 921
retirement annuities as defined by s 1 of the Income Tax Act 58 of 1962
definition of property for purposes of estate duty excluded from 920
ANTIQUE PIECES
valuation by reputable dealers 75
APPRAISALS, SWORN 46 513
immovable assets 74 75
movable assets 75
firearms 76
furniture 75
jeweller 76
motor vehicles 75 76
APPRAISERS
costs of appraisement 86
estate assets
valuations 454646(1) 512
firearms
valuation 78
furniture
valuation 75
proof, best 75
jewellery
valuation 76
motor vehicles
valuation 75 76
proof, best 75 76
property, immovable
valuations 4647 73 to 75
proof, best 73 74
sworn valuation for estate less than R3,5 million 73
ART
promotion
organisations
bequests
rebates in determining estate duty 928
ASSETS
estate
accounting for in estate account 73 to 714
immovable 74
movable 75 to 714
inventory
submission to Master 35 to 36
ASSUMPTION
power of
definition 28
ATTORNEYS
appointment as agents by executors 215
payment of accounts
verification by executors of accounts 812
questionnaires
completion 38
AUCTIONEERS
valuations
of livestock 79
AUCTIONS, PUBLIC 511 512
approval of the Master 512
conditions of sale 511
approval of heirs 511 512
notification 511
requirements 511
procedure 511 512
testamentary instruction 57
AWARDS IN SPECIE
beneficiaries
limitations 55
legal capacity lacking 55 56
mentally unsound 55
minor 55
legal impossibility 55
firearms 55
impracticability
due to cash deficit 54
due to impracticability 55
due to legal impossibility 55
firearms 55
due to legal incapacity of beneficiaries 55 56
mentally unsound 55
minor 55
due to opposition of heirs 56
due to testamentary instruction 55
liquidation 54 55 57
safeguarding 57
practicability 55
preference 54
BANKS
accounts
opening by executors 4546
exemption from obligation by the Master 27
informing the Master 45
in the name of the estate 45
specific accounts
cheque accounts
interestbearing accounts 46
savings accounts
balance certificates 73 712713
reflected in liquidation and distribution accounts 712
accounts, overdrawn
mention of 812
bank charges 86
deposits, fixed 46 57 713 to 714
claims45
advice concerning 45
liquidation 57
reflected in liquidation and distribution accounts 713
letter of authority 212
statements, final
submission to the Master 411114
statements, preliminary
submission 113
BLACK PERSONS
administration of estates 18
Constitutional Court judgment 18
constitutional values 19
discriminatory laws 18
estates being processed ito Black Administration Act 110
male primogeniture 19
redistribution agreements 19
renunciation by descendant 110
several spouses 19
BODIES
proof of identification required 33
CAPITAL
funds
annuities
liabilities against the funds 917
CAPITAL GAINS TAX
capital gain 937
effect on deceased estates 937 to 938
estate duty and 938 to 939
rate of capital gains tax 937
CASH ASSETS
accounting for in estate account 712
CHARITY (see PUBLIC BENEFIT ORGANISATION)
CHEQUE ACCOUNTS (see BANKS)
CHILDREN
life insurance
payment as a result of registered antenuptial contract
estate duty
exclusion of 920 924
security for executorship
exemption 29211310
CLOSE CORPORATION
legislation 17
members' interest in
COMPANIES
insurance
keyman policies
exclusion for estate duty purposes 920 924
conditions/requirements 920
officials
appointment as executors in a representative capacity 214
security for executorship 29
form 29
shares
exclusion for estate duty purposes 95
in listed company
valuation to be determined by registered stockbroker 79
in unlisted company
valuation/market value determined by company's auditor 79 99
transfer of
electronic 410 to 411
permission of the Master not required 410 to 411
proof 411 114
specific companies
family company
definition in terms of Estate Duty Act 45 of 1955 920
private companies
establishment 59
CONSTITUTION
values19
CONTROL OF PREMISES
preparation of inventory 35 36
reporting of deaths 33
CONVEYANCER
lodging of documents 411
COPYRIGHT
outside the Republic
COURTS
donations
determination of nature of 922
High Court
decisions
in connection with erroneous payment by executor 812
in connection with estates outside the Master's discretion 26
estate asset
purchase by executor 25 26
executors
removal from office 23 2448
responsibility for delay in submitting liquidation and distribution accounts 48
costs payable 48
Master, the (see MASTER OF THE HIGH COURT, THE)
CREDITORS
of estates
appointment of executors
qualification to object against 210
bank overdraft 811 to 812
claims
accrual 125 126
delictual 44
disputing by executors 44 89
payment 410 812
rejection by executors 44 810
submission 44 87 to 812
claims, delayed
failure to lodge 44 87 to 88
liabilities
acceptance of
arrangements with heirs 54
mortgage bond 810 to 811
notices to
advertising in Government Gazette and local newspaper 43 46
Friday publication 83
protection of 513
receipts from 812 114
South African Revenue Services 811
specific estates
insolvent deceased estates 516
notice of insolvency 516
sequestration of 59
Insolvency Act 59
sundry 810
CURATORS
awards in specie
representation of persons who do not have legal capacity 56
executorship
appointment in place of mentally unsound persons and prodigals 213
Mental Health Care Act, 2002 212
supervision by the Master 24
CURATORSHIP
persons under curatorship
assets: administration of 13
liquidation by executors: approval of the Master necessary 510
rights: protection by the Master 23
CUSTOMARY MARRIAGE
Recognition of Customary Marriages Act 120 of 1998 311
DEATHS
after 2 October 1967
estates
administration
Administration of Estates Act 66 of 1965, as amended 13
before 1 April 1955
estates
duty
Death Duties Act 29 of 1922, as amended 93
on or after 1 April 1955
estates
duty
Estate Duty Act 45 of 1955 93
death certificate
of deceased executor 310
requirements of the Master 34
death notices 33 to 34 35 37 310 ANX2
completing of 33 34 37
forms 13 33 ANX2
request by the Master 34
deathbed expenses
estates
duties
rebates on successive deaths 932
funerals
costs
cover by funeral policies 86 to 87
identification of body
delivery of proof to the Master 33 34
reporting 2829 33
within 14 days 33
in the Republic
reporting 33
reporting 33
tombstones
costs
admissibility 87
DEBTORS (see also CREDITORS)
of estates
notices to
placing in Government Gazette and local newspaper 43 44
payment of debt to executors 44
DEEDS
conveyancer certificate
sent to the Master 411114
notarial, in re mineral rights 16
Deeds Registries Act 47 of 1937
s 14 15
specific deeds
bond of security 310
number of title deed 811
title deed of immovable assets 74
DEPOSITS, FIXED (see BANKS)
DOCTRINE OF ELECTION 63 to 65
definition 63
procedure 64 65
DONATIONS
definition 921
inter vivos
description as property for estate duty purposes 921 922
requirements 921 922
mortis causa
description as property for estate duty purposes 96 921 924
requirements 921
determination of type by the court 921 922
intention of donor 921
EDUCATION
bequests
deduction by determination of estate duty 926
ELECTION
doctrine of election 63 to 65
definition 63
procedure 64 65
ESTATE ACCOUNTS (see LIQUIDATION AND DISTRIBUTION ACCOUNTS)
ESTATE ASSETS
immovable 74
movable 75 to 714
ESTATE DUTY
apportionment of 934
ESTATES
accrual system 123 124
administration process
appointment of summary administrator 212
costs
finalising preliminary work 37 to 310
procedure 43 to 412
process addresses of executors' representatives 37
reg R473, 24 March 1972 REG661 to REG6620
report to Master 2829
responsibility of executors 215
shortened procedure 27
specific estates
insolvent deceased estates 54 516
sequestration of 59
Insolvency Act 59
appraisals
of livestock 79
assets
affidavit by surviving spouse 513
listed in 513
auctions, public
conditions 511
awards in specie 54 to 56
cash
current bank accounts 712
fixed deposits 713 to 714
money market account 713 to 714
salary and leave pay 712
outstanding salary 712
savings accounts 712713
capital gains tax 936 to 939
determination of value of 4748
documents 73
excluded from accrual system 124
indexation of 126
factors to be considered in methods of liquidation 53
indexation of excluded assets 126
indivisibility 58 59
inventories
inventories, final 45
estimated values of assets 45
signing by executors 45
submission 45
inventories, preliminary 37 to 310
submission 35 36 3839
inventories, supplementary
proceeds of sold assets
mention of for estate duty purposes 924
submission 113
of minors and persons under curatorship
liquidation by executors: approval by the Master 510
proof, best
definition 73
proof, discretionary
definition 73
purchase by executor 25 26
specific assets (see the specific assets, e.g. FURNITURE)
valuations 4647
amendment by commissioner of revenue 94
by appraisers 45
costs 85
by executors 45
fair market value 46
Land Bank valuation 46
valuations, sworn
submission by the Master 513
values, estimation 45
assets, immovable (see PROPERTY, IMMOVABLE)
awards in specie see AWARDS IN SPECIE
effectuation of cash 54 55
claims
accrual 125 126
disputed by executors 44 89
lodgement 44 87 to 89
payment of, by executors 411 812
rejection of, by executors 44 810
claims, late
failure to lodge 44 87 88
costs caused by 44
creditors
appointment of executors
qualification to lodge an objection against 210
claims, belated
delay of lodgement 44 87 to 89
liabilities
acceptance of
arrangements with heirs 54
notices to
protection of 513
receipts of 812 114
debtors
notice to
payment of debts to executors 44
definition in respect of Estate Duty Act 45 of 1955 95
file reference numbers 23 513
freezing 38
insolvent
handling by executors 46
sequestration of 59
Insolvency Act 59
interested parties
objection to liquidation and distribution account 26
investments
claiming 4546
handling 45
liquidation 57
liabilities
acceptance by heirs 54
determination of 48
factors for consideration by liquidation planning 53
in liquidation and distribution accounts 106
payment 28 54 410 812
proof of 513
signed affidavits by surviving spouse
list in 513
specific liabilities
administration costs 83 to 87
specific costs
advertising costs 83
appraisement costs 86
bank charges 86
executor's remuneration 84 to 85
funeral expenses 86 to 87
Master's fees 83 to 84
transfer of fixed property 86
claims
proof 89
specific claims
bank overdrafts 811 to 812
disputed 89
immovable property
mortgages on 810 to 811
late 87 88 to 89
rejected 810
liquidation (see LIQUIDATION)
massing 65 to 612
notice
advertisements 43
planning 13
property (see PROPERTY)
redistribution agreement 19515 to 517
Deeds Registries Act 47 of 1937
s 14 15
registration
prima facie proof of death necessary 33 34
solvency 46 513
affidavits
mention of, in, by surviving spouse 513
determination of 46
specific estates
estates, derelict
administration
estates, insolvent deceased
administration 54 516
estates, intestate (see also INTESTATE ESTATES)
administration by curators
executors dative
appointments 210 to 212
magistrate's offices: no jurisdiction 110
nextofkin affidavits
lodgement 310 513 113
redistribution agreements 19515 to 517
estates, joint
notices
mention of date of birth and identity number of surviving spouse 44
rebates in determining estate duty 925 926
estates, personal
definition 99
of spouse, predeceased
interests, limited
proof of absence 412
spouse, surviving
taking over by
Administration of Estates Act 66 of 1965, as amended
s 38 27 54 513 to 515
valueadded tax 939
values
assets in estate
bank accounts 212
determination 47 to 48
determination by provisional inventories 35 36
exceeds R250 000 36 310
less than R250 000 27212 36 310
sworn valuation for estate less than R3,5 million 73
EXECUTORS
agents
appointment of 215
costs
compensation from executor's remuneration 85
applications for time extension for submission of liquidation and distribution accounts
appointment by the Master 2728
qualification to report objection
creditors 210
heirs 29
appointment of lay executor 212
appointment of persons outside the Republic 214
logistical problems addressed before appointment 214
security 29
bank accounts
opening 45
exemption from obligation by the Master 27
informing the Master 45
specific accounts
cheque accounts 45
savings accounts 45
definition 28
demands by creditors
disputing 44 88 89
notice of security by banks 812
rejection 44 810
submission to 87 to 89
discharge 411 to 412, 114
certificates, issuing by the Master 411 103
doctrine of election
notice by 65
duties 28214215
duties imposed by the ValueAdded Tax Act 939
estates
administration process
personal responsibility 215
assets
determination of value of 4647
"fair market value" 47
documents 73
liquidation 53 to 516
preferential sequence 56 57
discretion to depart 57
of minors or persons under curatorship
liquidation: approval by the Master 510 to 512
claims against
late claims 87 to 89
payment by executor 812
proof of claims 89
rejected claims 810
submission 44 87 to 89
types of claims 810 to 812
estate duty
determination and statement 93 94
payment 93 94 934 933
insolvency
handling 46
notice to the Master 516
lay person as executor 215
liabilities
determination of 48
electronic payment 812
payment of claims 48 812
solvency
determination 46
executorship
acceptance 37
forms of
information included
income tax reference number 37
process address of executor's representative 37
refusal 29213310
of curators
fees
VAT on 940
firearms
award in specie impossible 55
disposal of, by executor 77 78
divestment note 78
handing over to the police 78
inventory to be submitted to Firearms Office 77
safe custody and storage of, executor responsible for 77
temporary authorisation to possess 77
indication of absolute or relative disqualified persons for executors
companies 214
insolvents 213
Master, the 214
mentally unsound persons 213
minors 213
partnership 214
people under curatorship 213
persons attesting the execution of a will or to the writing or
signing of the execution of a will 214
persons disqualified from appointment as executors in terms of
s 13(2) of the Administration of Estates Act and regulation R910
of 22 May 1968, as amended 215
persons outside the Republic 214
logistical problems addressed before appointment 214
prodigals 213
inventories, final
signature 45
value of assets 45
when required by Master 45
investments
handling 45
issuing of
requirements 212
Master's assessment of value of estate 212
letters of executorship 23 29210212213214 37 38 43
authorisation to administer 215
cause of delay 39310
disallowance by the Master 29212213
required documents 39
requirements 28
scrutinisation 48
steps after 43 to 412
liquidation 53 to 516
executor's responsibilities 216
methods
sequence of preference
rules 56 57
written instruction by heirs 510
planning
consultation with heirs 53 56
sequence of preference of assets 57
discretion to depart from 57
advertisement
for inspection 23 2425
permission of the Master 23 2449
proof of 410114
certificate 103 108
requirements 108
composition of 48
objections 49
lodge in duplicate 49
requirements, final
stating of by the Master 410 to 412
submission to the Master 2848
application for extension of time 48
failure to submit accounts 48
court proceedings 48
costs payable 48
neglect of duties
accountability to the High Court 23
nomination
by heirs 310
declaration of invalidity by the Master 29
validity of will
acceptance by the Master 24
payment of claims 812
electronic 812
payments
problems 410
payments, faulty
personal accountability 812
provision of security 2845
exemption 28 to 211
form 29
report to Master in Republic of South Africa 29
purchase of estate assets 25
receipts
of creditors
submission to the Master 410 812
removal from office 2921148
remuneration 84 84(1)
earlier payment authorised by the Master 84
forfeiture of 23 48 85
increase of 27
application for 84
payment
professional fees, additional 85
reduction by the Master 27 84
VAT on 940
revenue form 267
submission 93 935 113
salary owing to the deceased 712
pro rata or full monthly 712
sales, partial 5 4 56 57
approval of heirs 59
consultation of heirs
preference 56
discharge of cash deficit in estates 56
powers 56
sales, total 54 57 to 512
approval by heirs 59
testamentary instructions 54 57 510
departure from provisions in will 57
authorisation by court necessary 57
specialised professional services
use of
claim against estate 85
valuations
fair market value 46
wills: interpretation 25
EXECUTORS DATIVE
appointment 211 37
procedure 211212
election meeting 211
provision of security 211
summary administrators 212
EXECUTORS, DECEASED
death certificates 39
replacement by executors dative 210
EXECUTORS TESTAMENTARY
appointment 28 to 210
objections by creditors 29
objections by interested parties 29210
setting aside
application by motion for 29210
issuing
requirements 212
letters of executorship
issuing of
requirements for 28
nomination 28 37 38
invalidity 29
objections by interested parties 29210
provision of security by 28
form 28
report to Master in Republic of South Africa 29
FAIR MARKET VALUE 46 910
FAMILY (see RELATIVES)
FAMILY BUSINESSES/COMPANIES (see COMPANIES)
FARMING OPERATIONS
more than a bona fide farming enterprise 47
FARMS
estate duty 4647
subdivision
Subdivision of Agricultural Land Act 70 of 1970 17 58 65
FIDEICOMMISSUM 14 106 107
assets subject to 104(1)
FIDUCIARY RIGHTS
definition as property in terms of Estate Duty Act 45 of 1955 95
estate duty
rebates in determining 925 to 928
valuations 99
entered in 103 106 107
property
definition in terms of Estate Duty Act 45 of 1955 99 to 911
FILING SLIP 411114
FINANCIAL INSTITUTIONS (see BANKS)
FIREARMS
description of, in liquidation and distribution account 78
divestment note 78
executor's duties
disposal 78
handing over to police 78
safe custody and storage 77
temporary authorisation to possess 77
to submit inventory to Firearms Office 77
licence 55
proficiency of heirs 76
valuation 78
FIRST LIQUIDATION ACCOUNT (see LIQUIDATION AND
DISTRIBUTION ACCOUNTS,
first liquidation account (interim account))
FIRST SUPPLEMENTARY ACCOUNT (see LIQUIDATION AND DISTRIBUTION ACCOUNTS,
first supplementary account)
FUNDS
annuities
deduction 916
payments
estate duty 920
exception 920 921 931
specific payments
ex gratia payments
estate duty 920
specific funds
capital funds
annuities
liabilities against the funds 917
pension funds
payments
description as "property" for purposes of estate duty 95 96 920
exclusion of "property" for estate duty purposes 918 919
specific payments
lumpsum payments
estate duty 933
periodic payments
estate duty 933
calculation
exclusion of payment through funds defined by s 1
of the Income Tax Act 58 of 1962 921 931
provident funds
payments of estate duty 920
trust funds
inheritance of minors: payments 513
FUNERALS
expenses
cover by funeral policies 86 to 87
rebates in determining estate duty 925 to 928 928(1)
FURNITURE
proof, best
appraisals by appraisers 75
valuation by two independent persons 4675
valuations 75
specific valuations
by appraisers 75
proof, best 75
by two independent persons 4675
proof, discretionary 75
GOODWILL
GOVERNMENT GAZETTE
advertising
exemption: section 18(3) estates 83
advertised in 26
notices 26 43 464849 83 113
GRAZING
rights
valuation for estate duty 99
GUARDIAN'S FUND
deposit in 410
inheritances of minors: payment into 513
GUARDIANS
awards in specie
representation of minors 56
HABITATIO
valuations for estate duty 99
HEIRS
assets
sales by executors: approval, in writing 59
cash deficit
paying in of 54
details of
recorded in distribution account 106
signed affidavit by surviving spouse
entered in 513
definition 63
procedure 64 65
estates
taking over by surviving spouse
written agreement 514
identity
factors for consideration when planning liquidation 53
influence on awarding in specie 55
incapability to inherit 24
inheritances
estate duty 93
payment 41059
liabilities
acceptance of
arrangements with creditors 54
liquidation methods
planning in deliberation with executors 53 to 55
written instruction to executors 510
power to object against appointment of executors 29210
presence at composition of inventory 35
property
improvements to
property, immovable
transfer of 86
costs 86
accounts 86
certification by conveyancer 86
receipts: issuing of to executors 410114
redistribution agreements 54 515 to 517
rights
administration
protection of by the Master 23
sales at request of interested parties 59 510
sales by private treaty or by public tender 512
approval 513
sales by public auction 57 511 512
draft conditions 511
approval of 511
sales, partial 54 56 to 57
influence on awards in specie 55
succession, intestate
Intestate Succession Act 81 of 1987 13
spouse, meaning of 13
writing out of or signing of will by heirs or spouses 2425
IDENTITY DOCUMENT
when certified copy of deceased required 310
IMMOVABLE PROPERTY (see PROPERTY, IMMOVABLE)
INCOME
after date of death
excluded in determining estate duty 926
estate duty
creation of state revenue 94
forms
revenue form 267
mention of rebates 935
submission 93 113
Revenue
donations inter vivos
determination of estate duty 921
estate assets
amendment of valuations 93 94 97
Estate Duty Act 45 of 1955
administration 93 94
estates
tax assessment
preparation 810
tax returns 810 93 113
lodging by executors 810
lumpsum benefit
description as gross income 921
property
right to enjoyment of 910
receipts for Master's fees
issuing of 410
INSOLVENCY
of estates
administration 54 517 to 518
indication of absolute or relative disqualification of insolvent
persons for executorship 213
INSURANCE
insurance of mortgage bond
redemption of mortgage bond debt 811
life insurance
bank accounts, overdraft 920
beneficiaries
designation 710 919
influence on mention of in the liquidation and distribution
accounts 919
cession of, as security 812 920
description as property for estate duty purposes 95 923 924
keyman policies
definition 920 921
conditions 920 921
paying out to executors 919
premium paid by beneficiaries
deduction for estate duty purposes 930 931
specific policies
domestic policies
definition 920
inclusion for estate duty purposes 920 925 926
exceptions 920
property deemed 96
policies
documentary proof 710
premium deductions owing at time of death 710
proceeds
protection of benefits by Longterm Insurance Act 52 of 1998 16
value, gross 79 to 710
reported in liquidation and distribution account 710
retirement annuity funds
exclusion of the concept property for estate duty purposes
payments
description as property for estate duty purposes 921
specific payments 96
lumpsum payments
estate duty 933
periodic payments
estate duty 933
calculation 920
security for executorship 29
specific insurance
funeral insurance
policies
cover of funeral costs 86 to 87
INTESTATE ESTATES
administration by curators
executors dative 210
jurisdiction 110
nextofkin affidavits
lodgement 39 to 310 513 113
redistribution agreements 19515 to 517
INVENTORIES OF ESTATE ASSETS
final
estimated values of assets 45
signing by executors 45
submission 45
heirs to be present 35
responsible person 35
supplementary: submission 411 113
submission to Master 35 to 36
INVESTMENTS
claim 45
advice concerning 45
liquidation 57
JEWELLERY
documents
valuations by appraisers 76
valuations by jewellers 76
accounting in 76
LAND
agricultural land
subdivision
Subdivision of Agricultural Land Act 70 of 1970 16 58 59 64 to 65
Subdivision of Agricultural Land Act Repeal Act 64 of 1998 17 58 65
equitable access to 16
restitution 16
security of tenure 17
LAW OF SUCCESSION 93
LEAVE PAY
owed to deceased
to be entered in recapitulation statement 712
LEGAL PERSONS
donations inter vivos
deemed to be property for estate duty purposes 921 922
shares
deduction for estate duty purposes 928 928(1)
LEGAL TERMS
adiation
certificates 611 612
requirements 63
definition 63
explanation to beneficiaries 63
requirement for massing 66 612
assumption of power 28
bare dominium (see nuda proprietas (nude ownership or bare dominium))
corpus (capital sum) 919
de bonis propriis (from personal funds) 48
dies cedit (money now owing) 613
definition 63
dominium minus plenum (nude ownership) 914
donatio inter vivos (gift between the living) 922
donatio mortis causa (gift in contemplation of death) 921
ex facie (evidently or on the face of it) 25
ex gratia (without obligation) 920
fideicommissarius (fideicommissary: beneficiary under a
fideicommissum) 14 15 84 99 106 107
fideicommissum (bequest to successive persons) 14 15 99 104(1) 107
fideicommissum mortis causa (fideicommissum created by will) 99 108
fideicommissum residui (fideicommissum of the residue) 84
fiduciarius (fiduciary) 84 99 106 107
habitatio (right of free residence) 99
in esse (in being, actually existing) 916
in securitatem debiti (to secure a debt) 920
inter vivos (between the living) 921 922
ipso facto (by the mere fact) 213
ipso jure (by the law as such) 921
mortis causa (in contemplation of death) 921 922 924 932
prima facie (at first sight, on the face of it) 34
pro rata (proportionately) 932
process address 214 37
proprietas plena (full ownership) 913
repudiation
certificate 113
requirements 63
definition 63
requirement for massing 612
res ususfructuaria (property subject to a usufruct) 99
stante matrimonio (during the subsistence of the marriage) 924 925
usus (right to use) 99
ususfructus (usufruct) 914 915
LEGATEES (see HEIRS)
LICENCES
LIFE EXPECTATION
influence on estate duty 910 to 914 916 917 920
LIFE INSURANCE (see INSURANCE)
LIQUIDATION
of assets
preferential sequence 57
methods
definition 53
feasibility
factors for consideration in liquidation 53
planning 53 54
consultation with heirs 53 to 55
preferential order
rules 510
specific methods
awards in specie 54 to 56
redistribution agreements 15 59515 to 517
inter vivos trust 516
sales, partial 54 56 to 57
taking over by surviving spouse 27 54 513 to 515
LIQUIDATION AND DISTRIBUTION ACCOUNTS
accrual
calculation of to be submitted with liquidation and distribution account 126
advertisements
costs
responsibility for 83
placing for inspection of liquidation and distribution account 23 2425
documents necessary 114
proof of 410114
amended account 104
amendments 26
assets
proof, best
definition 73
definition 73
property as defined in Estate Duty Act 45 of 1955 96 923
specific assets
current bank accounts 712713
firearms
description 78
divestment note 78
valuation 78
fixed deposits 713 to 714
insurance policies 79 710
jewellery
valuation
by appraisers 76
by jewellers 76
leave pay
in recapitulation statement 712
life insurance policies 919
livestock
description 79
proof, best
appraisal by appraisers 79
valuations
by auctioneers 79
by land bank valuators 79
by two experienced farmers 79
motor vehicles
description 76
valuation by appraiser 76
valuation by approved dealer 76
salaries
in recapitulation statement 712
savings accounts
balance certificate 73 712713
yield
mention of for estate duty purposes 910 924
compilation of 13 48 93 103
components
distribution account 103 106
estate duty account 93 932 933 103 108
executor's certificate 103 108
fiduciary assets account 103 107 108
heading 104
income and expenditure account 103 107
money column 74 74(1) 105
recapitulation account (recapitulation statement) 74(1) 712 103 106
documents
required for submission 113 114
estate duty
mention of 93 935
first liquidation account (interim account) 105
first supplementary account 105
liabilities
specific liabilities
claims
bank accounts, overdrafts 811 to 812
claims, disputed 44 89
claims, late 44 87 to 89
claims, rejected 44 810
immovable property
mortgages on 810 to 811
estates
administration costs 83 to 87
advertising costs 83
bank charges 86
executor's remuneration 84 to 85
funeral expenses 86 to 87
transfer costs of fixed property 86
valuation costs 86
estate duty 932 933
insurance policies: premium deductions 710
lodgement in time specified
application for time extension 13 48
failure to submit accounts 48
objections against 26 49
no receipt 514
requirement of permission to takeover of estates by surviving spouse 514
property, immovable
explanation of 73 74
proof, best
proof, discretionary 73 74
valuations 74
municipal valuations 74
sale
details
explanation in 74
proceeds
explanation in the money column 74 74(1)
title deeds 74
matching description 74
certificate of conveyance 74
valuations
specific valuations
by appraisers 46 74
proof, best 74
municipal valuations 46 74
requirements, final 410 to 412
shares79
submission to Commissioner for Inland Revenue by the Master 94
LIVESTOCK
liquidation and distribution account
description 79
proof, best
appraisals
specific appraisals
by auctioneers 79
by land bank appraisers 79
by two experienced farmers 79
LOCAL GOVERNMENTS (see MUNICIPALITIES)
MAGISTRATES
claims, disputed
notice to witnesses to give evidence 44
intestate estates 110
advertisement for inspection
dispatch of duplicate to magistrate 26
MALES
life expectancy
influence on estate duty 911
MARRIAGE
accrual system 123 124
affidavit
not party to customary marriage 311
contracts
antenuptial contract
conditions in respect of life insurance
payment of full proceeds to spouse or children
exclusion for estate duty purposes 920 923 924
submission of 113
customary marriage 311
registration certificate 311
in community of property
assets
inventory of 35
definition 63
procedure 64 65
joint estates
administration of on demise of firstdying spouse 14
MASSING
Administration of Estates Act 66 of 1965, section 37 68
diagrammatic illustration of 69
and estate duty: avoidance of 610
of estates 65 to 612
exercise of election in writing where massing at issue 612 to 613
legal institutions involved in 67
presumption against 6667
risks involved in 69
MASTER OF THE HIGH COURT, THE
appointment 23
auctions, public 511 512
approval 511
bank accounts
opening by executors
exemption from obligation 27
informing 45
bodies
proof of identification 33 34
claims, disputed
notification of witnesses to supply information 44
compensation (see Master's fees)
costs
authorisation of
death certificates
requirement of 34
deaths
proof
requirement of 33 34
reporting 28 33 34
decisions
appeals against 49410
discharge certificate
issuing to executors 411
documents to be sent to the Master 39
estate assets
of minors and persons under curatorship
liquidation by executors
approval 510 512
proof, best
requirements 73
allowing 73
purchase by executors 25
valuation by appraisers
order of 45
estates
takeover by surviving spouse
approval 514
requirements 513
executors
appointment 27 37
unqualified for 210211 to 214
duties after receiving 41
issuing of 2829211
refusal 210213
nomination by will 28
removal from office 23 21021148
executors dative
appointment of replacements 210
executors testamentary
issuing of
requirement for 28
nomination
invalidity
declaration of 2829
filing slip
issuing by 411114
functions
administrative 27 514
advisory 26 to 27
discretionary 274849 514 73 107
judicial 24 to 26
quasijudicial 24 to 26
supervisory 24
heirs
protection of 23
inventories
submission of 35
advertisement for inspection
permission by Master 23 2449410 94
amendment of 26
components
mention of
requirements 103
endorsement 411
preparation and submission by executors 48
requirements, final
preparation 410 to 412
submission by executors within prescribed period 35 48
application for extension of time 48
submission to Receiver of Revenue 94
Master's fees
responsibility 83 to 84
paying of 513 107
proof of 410
receipts for issued by Receiver of Revenue 410114
tariffs 84
minors
protection of 23
redistribution agreements: supervision 516
property, immovable
transfer of
certificate from the Master necessary 411 511 512
receipts
of heirs 410
creditors 410
submission by executors 410
sale by private treaty or by public tender 512
approval 512
shares
transfer of
proof of 410 to 411
wills
interpretation 25
registration 24 34
submission to 34
MENTALLY UNSOUND PERSONS
appointment of curator as substitute executor 213
awards in specie 55 56
disqualification for executorship 213
MINERAL RIGHTS
deeds in respect of 16
MINORS
assets
administration
liquidation by executors
approval of the Master necessary 510
awards in specie 55 56
birth certificates
submission to the Master 411 113
disqualified for executorship 213
position as beneficiaries during takeover of estates
benefits 513
homes
provision of 514
inheritance 514
payment to in guardian's funds 513
security for safeguarding minor's interests 513
by surviving spouse 513 514
meaning of 13 14
redistribution agreement
supervision of the Master 515
rights
protection by the Master 23
MONEY INVESTMENTS (see INVESTMENTS)
MORTGAGE BONDS
on immovable property
insurance (see INSURANCE)
reflected in liquidation and distribution accounts 810 to 811
MOTOR VEHICLES
description 76
valuation 46 76
specific valuation
by appraisers 76
proof, best 76
by authorised dealer 76
MUNICIPALITIES
bequests to
estate duty
liability of purchaser at public auctions 511
property, immovable
valuations 46 74
valuations
of property, immovable 46 74
NEWSPAPERS
advertisements 26 43 4648410
area where deceased resident 12 months before death 26
proof of 410 511 512 114
NEXTOFKIN AFFIDAVITS 310 513 113
OCCUPATIONAL COMPENSATION
payment 511
OWNERSHIP
specific ownership
coownership 514
full ownership 913
estate duty 913 914
nude ownership 914
sectional title ownership 75
sole ownership 514
PARENTS
exemption from provision of security for executorship 29310
PARTNERSHIPS
appointment of one or more partners as executors 214
partners
life insurance of
exemption for estate duty purposes
conditions for 920
PATENT DESIGNS
PENSIONS
funds
exclusion of the concept "property" for estate duty purposes
payments
description as "property" for estate duty purposes 96 921
specific payments
lump sum benefits 933
periodic payments 933
PEOPLE UNDER CURATORSHIP
appointment of curator as substitute executor 213
POLICIES (see INSURANCE policies)
PROCESS ADDRESS 214 37
PRODIGALS
PROOF, DISCRETIONARY
definition 71
PROPERTY
definition in terms of Estate Duty Act 45 of 1955 95 96 923
estate duty
influence on
expectation of life 910 914
residency 95
improvements to by heirs
right of the enjoyment of
value, annual
calculation 99 910
specific property
property, actual 94
annuities (see ANNUITIES)
assets in the liquidation account 97
estate duty 97
mention in revenue form 267 935
specific rights
fiduciary rights 95 96 97
habitatio 99
trusts
income from 99
usufructs 95 96 97 to 99
estate duty
calculations 99 910
verification calculations 915
passing of, impossible to establish 99 914
usus 99
property deemed to be property 95 919 to 924
donations 921 922
funds
payments 919 to 921
life insurance policies 919 920 924 925
mention of in revenue form 267 935
property which the deceased was competent to dispose of 922
exclusion for purposes of estate duty 95 96
transfer of
costs
liability of purchaser at public auction 511
values
allocated 94
amendment by Commissioner for Inland Revenue 94 97
PROPERTY, IMMOVABLE
agricultural land
subdivision
Subdivision of Agricultural Land Act 70 of 1970 16 58 to 510 64 to 65
auctions, public 57 511 512
conditions 511
bank 510
deeds search 46
description, correct 36
fideicommissum: limitation of 14 15 ACT941 to ACT 948
indivisibility 58 59
description to match title deeds 74
certificate of conveyance 74
entered in 74
mortgage bonds
reflected in liquidation and distribution accounts 810 to 811
proof, best 73
valuations 73 74
municipal valuations 74
transfer in consequence of 514
registration
issuing of conveyancer certificates 411
restitution of land rights 17
sale 2559 512
particulars
entered in liquidation and distribution accounts 74
proceeds
reference to in money column 74 74(1)
transfer of
certificate from the Master required 411 511 512
costs 86
accounts 86
certification by conveyancer 86
proof 411
valuations
specific valuations
by appraisers 46 74
proof, best 73
PROVIDENT FUNDS
payments
estate duty 921
exception 921
PUBLIC BENEFIT ORGANISATIONS
bequests 927
RATES, MUNICIPAL
liability of purchaser with public auctions 511
RECOGNITION OF CUSTOMARY MARRIAGES ACT 120 OF 1998
proof of marriage 311
registration certificate 311
REDISTRIBUTION AGREEMENTS 15 19 54 59 514 to 516
inter vivos trust 516
submission 113
RELATIVES
definition in terms of Estate Duty Act 45 of 1955 921
family company 924
preparing and submitting of inventories 34
reporting of death 32
specific relatives
nearest connection
preparation of preliminary inventories 35
reporting of death cases 33
nearest relative
compilation of preliminary inventories 35
reporting of death cases 33
REPUDIATION
certificates 65 612
requirements 63
definition 63
example 64
limited interests
repudiation or renunciation of by intermediate beneficiaries 613 614
requirement for massing 612
RESIDENCE
effect of on estate duty 95
RESPONDENTS
citation for disputed appointment as executor 29
RETIREMENT
RIGHTS
specific rights
copyright
grazing rights
estate duty
valuations 99 to 910
law of succession 93
limited rights
absence of in predeceased spouses' estates
proof 411
fiduciary rights 95 97 et seq
grazing rights 99
estate duty
calculations concerning 99 910
formulas for 99 910
valuations for 99 to 910
passing on, indeterminable 99 914
right of enjoyment of
value, annual
calculation 99 910
habitatio 99
trusts
income of 99
usufructs 96 97 99 et seq
usus 99
property rights
coownership 514
full ownership 913
estate duty 913
nude ownership 914
sole ownership 514
SALARIES
liquidation and distribution account
to be entered in recapitulation statement 712
SALES (see SALES, TOTAL)
SALES, PARTIAL
assets
liquidation 54 56
preferential order 57
discretion of executors to depart therefrom 57
executors: powers of 56
heirs: approval of 510
making up for cash deficit in estate 56
SALES, TOTAL
approval of heirs 59
method of liquidation 54 57 to 512
specific sales
sales at request of heirs 59 to 510
sales due to necessity
auctions, public 57 511 512
necessity due to indivisibility of property 58 59
necessity due to indivisibility or inadmissibility of transfer 59
necessity due to insolvency 59
necessity due to statutory provisions 58
necessity to prevent detrimental consequences 58
sale by private treaty or by public tender 512
advantages 512
sales in terms of testamentary instructions 55 57 510
SAVINGS ACCOUNTS (see BANKS)
SCIENCE PROMOTION
bequests to institutions: deductions allowed 928
SECURITY
for executorship (see SURETY for executorship)
SHARES
in listed companies
transfer
Master's permission not necessary 410
proof 410 to 411114
valuation of, by a registered stockbroker 79
when not included for purposes of estate duty 96
in unlisted companies: market value of 79 99
liquidation 57
SIGNATURE
of witnesses
casting doubt on their capacity to benefit 24
SPOUSE
writing or attesting of wills
influence on capacity to benefit 24
SPOUSE, PREDECEASED
estates
rights, limited
proof of absence of 411
usufruct created in
SPOUSE, SURVIVING
addresses
mention of in affidavits 513
assets
possession in own right
affidavits 513
taking over
intention to sell
affidavits 513
dates of birth
mention of in advertisements 44
doctrine of election
definition 63 to 65
procedure 64 65
estates
taking over
Administration of Estates Act 66 of 1965 27
affidavit containing request for taking over 513
information contained therein 513
endorsement by executors 513
certificate of approval
issuing by the Master 513
requirements 513
specific estates
estates, joint
surviving spouse's half
executorship
provision of security
exemption 2921121221339
form 29
identity numbers
mention of in advertisements 44
inventories: preparation of 35 36
life insurance
payment in terms of a registered antenuptial contract
estate duty
exclusion of 920 924
meaning of 13 14
names
mention of in affidavits 513
provision of security for executorship
exemption 2921121221339
Deeds Registries Act 47 of 1937 15
submission of death notice 33 34
STATE
bequests to
SURETY
exemption 2921121221339
form 29
report to Master 29
for overdraft facilities 812 919
TAX
of estates
annuities 916 to 919
budget review 2010 14 95
calculation
concerning annuities 916 to 919
concerning rights, limited 97 to 915
influence of expectation of life 99 to 916
control by Receiver of Revenue 94
determination 93 96 97
division 932
dutiable amount 98
determination 931 934
dutiable estates
interests, limited 97 to 99 934
dutiable estates, gross
description 97 923 924
dutiable estates, net
description 97
determination 96 97 925 to 930 930(1) to 930(3)
estates
definition in respect of Estate Duty Act 45 of 1955 94
evasion 94
funds
payments 921
income tax reference numbers 37
influence of residence on 95
insurance 920
legislative revamp 95
liability 93
liquidation and distribution account 935
payment 412 93 94
property (see PROPERTY)
rebates 95 96
mention of in revenue form 267 935
specific rebates
administration costs 926
annuities
charged upon property 930(3) 930(4)
requirements 930(3)
bequests 927
deathbed expenses 926
deaths, rapid succession 932
donations 921 922
estate duty paid 932
estates, joint
funeral expenses
claims against deceased spouse's half 925 926
surviving spouse's half 925 926
expenses allowed by the Master 926
funds
payments 931
funeral expenses 926
income after date of death 926
insurance policies 926 to 928 928(1)
life insurance
policies
proceeds
premiums paid by beneficiary
deduction of 931
policies, certain 919 930 931
pension funds definition by s 1 of the Income Tax Act 58 of 1962
annuities 919 931
property
improvements made by heir 927 928
outside the Republic 925 997
rebates, foreign 925
usufructuary 930(3) 930(4) 931 932 933
review of 95
shares
in companies, unlisted
market value 99
transfer of 410 to 411
succession duty 93
tax assessments
preparation by Receiver of Revenue 810
tax liability 46
proof, best
requirements by the Master 73
tax returns
submission by executors 810 93 94
tips 936
valueadded 939
TENDERS
submission and allocation 512
TOMBSTONES
costs
allowance 87
TRADE MARKS
TRADITIONAL MARRIAGES
recognition 14
TRUSTS
annuities
payment to nominated persons 916
goods
administration
Trust Property Control Act 57 of 1988 14
monies
control
Trust Property Control Act 57 of 1988 14
revenue arising from a fideicommissum
estate duty
valuation for 99
USUFRUCTUARIES
creation in predeceased spouses' estates
rebates in determining estate duty 930(3) 930(4) 931 932 933
estate duty
payments by beneficiaries 932
rebates in determining 930(3) 930(4) 931 932 933
valuations 97 to 99
property
definition in terms of Estate Duty Act 45 of 1955 95 to 97
USUS
estate duty
valuation 99 910
property, actual 910
VALUATIONS
of agricultural land
of antiques 75
best proof 73 74
discretionary proof 73 74
of estate assets 4546 94
amendment by Receiver of Revenue 93 97
of furniture
by appraiser
by two independent persons 4675
of jewellery 76
by appraiser 76
by jeweller 76
of livestock
by auctioneers 79
by land bank appraisers 79
by two farmers 79
of property, immovable 4647 73 74
by appraisers 46 74
by Land Bank 46
of shares
in companies
valuations of registered stockbrokers 79
in unlisted companies
valuation of companies' auditors 79
tariffs 86
VALUEADDED TAX 939
connected person 940
executor's fee 940
SARS guide 940
VEHICLES (see also MOTOR VEHICLES)
valuation 46
VOETSTOOTS
conditions for sale by public auction 511
W
WILLS
acceptance 24
of benefit (see ADIATION)
appointing of executors
validity accepted by the Master 24
assets, bequeathed
liquidation
safeguarding 57
destruction, concealing, damaging or falsifying 35
disputes over last wills 34
duplicates 25
estates
sales, total
instructing of 54
execution
Wills Act 7 of 1953, as amended 13 214
falsification 25 35
freedom of testation 57
influence, undue 24
interpretation 25
invalidity 29
mention of writers of handwritten wills 24 34
registration 24 34
regulations
factors for considering planning of method of liquidation 53
rejection
of benefit (see REPUDIATION)
submission 34
testamentary instruction 57
departures 57
authority of court necessary 57
instruction of liquidation methods 510
witnesses
identification of 34
independent 25
written by or attested by heirs or spouse
influence on receiving benefit 24
WITNESSES
identification 34
relationship to beneficiaries
mention of 25
procedure 64 65
signature on wills 24
WOMEN
life expectation
effect on estate duty 911 912
46 SATC 121 611
A
Alberts, Ex parte 1944 TPD 187 614
B
Bhe and Others v Magistrate, Khayelitsha and Others 2004 (2) SA 544 (CC) 18
Boulton, Ex parte Estate 1958 (4) SA 439 (C) 54
Buxmann's Executors v The Master 1932 CPD 241 510
C
CIR v Sive's Estate 1955 1 SA 249 (A) 612
Commissioner, South African Revenue Service v
Executor, Frith's Estate 2001 (2) SA 261 (SCA) 930
Commissioner for the South African Revenue Service v
Klosser's Estate 2000 (4) SA 993 (C) 930(2)
Cradock's Estate v Cradock 1951 (3) SA 51 (N) 53, 510
D
Daniels v Campbell and Others 2004 (5) SA 331 (CC) 13, 14
De Faria v Sheriff, High Court, Witbank 2005 (3) SA 372 (T) 216
E
Emmanuel and Others v Estate Rice 1968 (3) SA 502 (W) 615
Grobbelaar v Grobbelaar 1959 (4) SA 719 (A) 85
H
Hiddingh v De Villiers and Denyssen (1887) 5 SC 298 53
Hirschsohn NO and Others v Horn NO 1990 (1) SA 769 (C) 615
I
ITC 1773 926
ITC 1681 62 SATC 365 930
K
Klerck NO v Registrar of Deeds 1950 (1) SA 626 (T) 515
Kohlberg v Burnett NO and Others 1986 (3) SA 12 (A) 517
L
Langemaat v Minister of Safety and Security and Others 1998 (3) SA 312 (T) 929
Louw and Others v FWKP Albrecht Trust 1998 (3) SA 1048 (C) 615
M
Marais, Ex parte 1953 (4) SA 620 (T) 614, 615
Moseneke v Master of the Supreme Court 2001 (2) SA 18 (CC) 18
P
PPS Insurance Company Limited and Others v Simon Michael Makhabela (159/2011)
[2011 ZACA 119 (14 November 2011)] 710
R
Rhode v Stubbs 2005 (5) SA 104 (SCA) 66(1)
Sekretaris van Binnelandse Inkomste v Boedel Snyman 1972 (1) SA 1 (A) 930(3)
Shibi v Sithole and Others (CCT 50/03, CCT 69/03, CCT 49/03) [2004] ZACC 18;
2005 (1) SA 580 (CC); 2005 (1) BCLR 1 (CC) (15 October 2004) 18
Stanford, Estate v Kruger 1942 TPD 243 88
T
Thomas and Another v Clover NO and Others 2002 (3) SA 85 (N) 215
Tolstrup NO v Kwapa NO 2002 (2) SA 73 (W) 88
V
Van den Bergh v Coetzee 2001 (4) SA 93 (T) 216
Visser v Schmidt NO 2001 (3) SA 810 (T) 88
W
Webb v Marquard NO and Another 1981 (2) SA 43 (C) 614
Wood v Estate Thompson 1949 (1) SA 607 (D) 89
Administration of Estates Act 24 of 1913 13
Administration of Estates Act 66 of 1965
generally 13, 23, 27, 216, 94, ANX7, ANX80
s 1 28
s 6(5) 86
s 7 33, ANX2, ANX14
s 7(3) 33
s 7(4) 34
s 8 34, ANX14
s 8(3) 34, 35
s 8(4) 34, 35
s 9 35, ANX3, ANX14
s 9(1)(a) ANX3
s 9(2)(b) 35, ANX3
s 13(2) 215
s 14(1)(b) 213, 215
s 15 28
s 18(1) 211
s 18(3) 212, 36, 83, ANX1
s 18(3)(b) 27
s 23 29, 45, 74
s 27 45, ANX3
s 27(1)(a) 45
s 28 27, 45, 86, 812
s 28(1) ANX76
s 28(2) 46
s 29 44, 87, ANX14(1), ANX14(2), ANX16
s 29(1) 44, 87, ANX75
s 29(2) 44
s 30 216
s 31 44, 87, ANX14(4)
s 31(a) 87
s 32 44, 89
s 32(2) ANX14(4)
s 32(3) 810
s 33 810
s 34 46, 47, 54, 517, 518, ANX1, ANX14(2)
s 34(1) ANX14(2)
s 34(2) 59, 518, ANX20(1)
s 34(3) ANX20(1)
s 35 23, 43, 48, 73, 88, 812, ANX1
s 35(1) 49, 93
s 35(2) ANX76
s 35(5) 94, ANX59
s 35(7) 49
s 35(12) 410, 411
s 35(13) 410
s 36 49
s 37 35, 68
s 38 27, 54, 513, 514, 515, 74, 86,
ANX24, ANX30, ANX31, ANX62
s 38(1) 513
s 39 85
s 42(1) 411, ANX60, ANX61
s 42(2) 411, 511, 512, 513, ANX20(1), ANX61
s 43 ANX24, ANX31
s 43(6) ANX39
s 44 ANX24
s 46 23
s 47 25, 56, 510, 512, ANX11
s 47(a) 510, 512, ANX21
s 47(b) 510, 512, ANX21
s 49 ANX62
s 49(1) ANX20(1)
s 51 ANX1
s 51(3) 23
s 51(3)(a) ANX41
s 51(3)(c) 107
s 54 24
s 54(1)(a)(ii) 210
s 54(1)(a)(iv) 210
s 54(1)(b)(iii) 210
s 54(3) 23
s 56(1) 88
s 56(2) 88
s 78 ANX3
s 80 516
s 84(2) 23
s 85 23
s 95 210
s 102(1)(a) 35
s 102(1)(b) ANX3
s 102(1)(h) 216
s 103 13, 33, 93, 103, 107
Regulations
reg 5(1) 103
reg 5(1)(c)(iii) 105
reg 5(1)(g) 107
reg 5(1)(h) 93, 98, 935, 936, ANX74
reg 6 49, ANX75
reg 7 84
Sch 2 84
Administration of Estates Amendment Act 86 of 1983
s 12 411
Attorneys Act 53 of 1979
s 23(9) 214
Black Administration Act 38 of 1927 (since repealed)
s 23 18, 19, 110
Regulations 19, 110
Close Corporations Act 69 of 1984 17
s 29 17, 711
s 29(3)(c) 17, 711
s 29(3)(d) 17, 712
s 34(2) 711
s 35 17, 710
Constitution of the Republic of South Africa, 1996 18, 19
s 9 929
s 15 929
s 25(5) 16
Deeds Registries Act 47 of 1937 15, 86
s 14 15, 516
s 14(1)(a) 516
s 14(1)(b) 516
s 14(1)(b)(iii) 516
s 14(1)(b)(iv) 516, 517
s 45 ANX63
Regulations
reg 50(2)(a) ANX62
reg 50(2)(b) ANX60
reg 85 86
Deeds Registration Amendment Act 43 of 1957
s 7(a) 516
Deeds Registries Amendment Act 9 of 2003 15
Development Facilitation Act 67 of 1995 16
Estate Duty Act 45 of 1955 14, 93, 94, 95, 97, 916, 920, 922, 926,
928(1), 929, 930, 930(3), 934, 936, ANX32
s 1 47, 921, 928(1)
s 1(2) 47
s 2(1) 95
s 2(2) 95
s 3 930(3)
s 3(1) 95, 96, 923
s 3(2) 96, 97, 99, 912, 913, 915, 916,
917, 919, 923, 925, 926, 931, 934,
ANX32, ANX34, ANX40, ANX55, ANX74
s 3(2)(a) 912, 916, 917, 918, 919, 930(2), ANX32, ANX36
s 3(2)(b) 916, 918, 919, ANX32, ANX36
s 3(2)(c)(h) 96, ANX32
s 3(2)(i) 921
s 3(3) 96, 97, 918, 919, 921, 922,
923, 925, 926, 928, 934,
s 3(3)(a) ANX33, ANX36
s 3(3)(a)(i) ANX33, ANX74
s 3(3)(a)(iA) 920, ANX33
s 3(3)(a)(ii) ANX33
s 3(3)(a)bis 933, ANX33, ANX36
s 3(3)(b) ANX33, ANX36
s 3(3)(cA) 126, ANX33
s 3(3)(d) 922, ANX33
s 3(3)(i) 97
s 3(5) 922, ANX33
s 4 97, 98, 925, 928, 936, 938, ANX32,
ANX33, ANX35, ANX40, ANX55, ANX74, ANX77
s 4(a) 926, ANX33, ANX40, ANX55, ANX74
s 4(b) 926, 927, ANX32, ANX33, ANX40, ANX55, ANX74
s 4(c) 926, ANX33, ANX40, ANX55, ANX74
s 4(d) 926, ANX40
s 4(e) 925, ANX33
s 4(f) 927, ANX33
s 4(g) 930(3), ANX33
s 4(h) 927, 930, ANX33, ANX56, ANX74
s 4(i) 927, ANX33
s 4(j) 930(3), 933, ANX33, ANX56, ANX58
s 4(lA) 928, 126, ANX34
s 4(m) 930(3), 930(4), 931, 932, 933, ANX34
s 4(m)(ii) 932
s 4(o) 928, ANX34
s 4(p) 928, 928(1), 931, ANX34
s 4(q) 928(1), 929, 930, 930(1), 930(2), 930(3),
930(4), 931, 932, 933
s 4A 97, 98, 930, 934, 939, ANX32, ANX34, ANX36,
ANX40, ANX56, ANX74, ANX77, ANX78, ANX79
s 4A(1) ANX78
s 4A(2) ANX78, ANX79
s 4A(2)(a) ANX78
s 4A(2)(b) ANX78
s 4A(3) ANX78, ANX79
s 4A(3)(a) ANX79
s 4A(3)(b) ANX79
s 4A(4) ANX79
s 4A(5) ANX79
s 5 94, 923, 930(2)
s 5(1) 913
s 5(1A) 47
s 5(1)(b) 99, 910, 911, 912, 915, 930(2),
930(3), 933, ANX32
s 5(1)(c) ANX32
s 5(1)(d) ANX32
s 5(1)(f) 930(2), 930(3)
s 5(1)(f)bis 928
s 5(1)(g) 928, 930(2), 930(3)
s 5(2) 910, 930(2), 930(3)
s 7 98, ANX77, ANX78, ANX79
s 7(1) 93
s 8 99
s 8bis 94
s 8A 94
s 8B 94
s 8C 94
s 8D 94
s 8E 94
s 9(3) ANX79
s 9(4)(a) ANX79
s 9(4)(b) ANX79
s 9(4)(c) ANX79
s 9A ANX77, ANX79, ANX80
s 11 935, ANX36
s 12 ANX77, ANX80
s 13 935
s 16(a) ANX34
s 16(c) ANX34
s 17 412
s 19 ANX77, ANX80
s 20 933
s 28 94
s 29 911, 913
First Sch 95, ANX34
Extension of Security of Tenure Act 62 of 1997 17
Firearms Control Act 60 of 2000 76, 77
Chapter 6 77
s 21 77
Regulations
reg 13 76
reg 14 76
reg 86 77
reg 86(1) 77
reg 94 78
reg 103 77, 78
reg 103(1) 77
reg 103(1)(b) 77
reg 103(2) 77
reg 103(3)(a) 77
reg 103(7) 78
reg 104 78
reg 105 78
High Court Rules
r 6 26
Immovable Property (Removal or Modification of Restrictions)
Act 94 of 1965 14
s 6 15
s 7 15
Income Tax Act 58 of 1962 93, 921
s 1 919, 933, 939
s 26A 936
s 30 927
s 55(1) 610, 611, 612, 615, 126
s 58 610, 611, 615
Sch 8 937
Sch 8 Part V 937
Sch 8 par 31 937, 938, 939
Sch 8 par 40 937, 938
Sch 8 par 40(2)(b) 938
Sch 8 par 41 938
Insolvency Act 24 of 1936 59, 518
s 44(1) 44
Intestate Succession Act 81 of 1987 13, 515, 105, ANX39, ANX61
s 1 19
s 1(1)(c)(i) 19, ANX39
s 1(1)(c)(ii) ANX39
s 1(3)(6) 110
s 1(4)(e)(i) ANX39
s 1(4)(f) 19
s 14(1)(b) 19
s 23 19
Land Reform (Labour Tenants) Act 3 of 1996 17
Longterm Insurance Act 52 of 1998 16
s 63(1)(b) 16
Law of Succession Amendment Act 43 of 1992 24, 25, 214
Maintenance of Surviving Spouses Act 27 of 1990 14, 38, 515,
ANX14(5), ANX30
s 1 sv "survivor" 14
Matrimonial Property Act 88 of 1984 14, 922, 104
ch I 922
s 2 123
s 3 96, 928
s 3(1) 922, ANX14(5)
s 4(1) 124
s 4(1)(b)(i) 126
s 4(1)(b)(ii) 126
s 4(1)(b)(iii) 126
s 4(2) 125
s 6 124
s 6(4)(b) 124
s 10 126
Mental Health Care Act 17 of 2002 212
Mineral and Petroleum Resources Development Act 28 of 2002 15
s 3(2) 15
s 5 15
s 56(b) 15
Sch II 15
Minerals Act 50 of 1991 15
Prescription Act 68 of 1969 89
s 11 87
s 13(g) 89
s 13(h) 89
Prevention of Illegal Eviction from and Unlawful Occupation of Land
Act 19 of 1998 17
Prevention of Illegal Squatting Act 52 of 1951 17
R
Recognition of Customary Marriages Act 120 of 1998 15, 311
s 1 929
s 2 929
s 3 929
s 4 311
Restitution of Land Rights Act 22 of 1994 17
s 2 17
Restitution of Land Rights Amendment Act 48 of 2003 17
Revenue Laws Amendment Act 81 of 1985
generally 929
Revenue Laws Amendment Act 92 of 1983 920
Sectional Titles Act 66 of 1971
s 11(4) ANX20(1)
Subdivision of Agricultural Land Act 70 of 1970 16, 58, 64
s 3 58
s 4 58
s 5 58
s 5(1) 59, 64
Subdivision of Agricultural Land Act Repeal Act 64 of 1998 16, 58, 65
Taxation Laws Amendment Act 30 of 1998 94
s 13 933
s 14(1) 932
Taxation Laws Amendment Act 30 of 2002 927
Taxation Laws Amendment Act 17 of 2009 ANX77
s 5 ANX77
Taxation Laws Second Amendment Act 18 of 2009 ANX77, ANX79
s 3 ANX79
s 4 ANX79
s 5 ANX79
Trust Moneys Protection Act 34 of 1934 14
Trust Property Control Act 57 of 1988 14, 67
Valueadded Tax Act 89 of 1991 85, 939, 940
Wills Act 7 of 1953 13
s 4A 214
s 4A(1) 214
s 4A(2) 215
s 4A(3) 215
s 5 214
s 6 214

Administration of Estates

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Preface

(ii) if any person could, if he were appointed as an executor, be removed from his office under section 54(1)(a)(ii)

(ix) Preparation and submission of liquidation and distribution account by executor (section 35) The

(i) Annuities charged upon property (section 3(2)(a)) For purposes of estate duty, this kind of annuity is

(c) a r e b a t e i n t e r m s o f section 4(q) m u s t n o t h a v e b e e n a l l o w e d a t t h e d e a t h o f t h e d e c e a s e d ' s

SIGNED at on this day of 2012.

SIGNED at on this day of 2012.

SIGNED at on this day of 2012.

Section Type of property Person liable

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