There are many factors which can influence the time it takes to wind up an estate, including the following:
– The executor cannot commence the process until Letters of Executorship are received from The Master. This can take a month or even longer;
– The executor must advertise for creditors to lodge claims and allow a period of thirty days for them to do so;
– If a property forms part of the estate and the heirs decide they wish to sell the property, the selling process may take a few months;
– An Income Tax Return has to be prepared, submitted to SARS and assessed for the deceased for the period up to date of death. This return is often complicated by the fact that on death a person is deemed to have disposed of all his / her assets for purposes of Capital Gains Tax so all relevant information must be sourced and submitted. A new taxpayer – the deceased estate – comes into being from date of death and must be registered with SARS. A tax return must be prepared and submitted to SARS in respect of income from date of death until the Liquidation and Distribution Account is prepared. We find that SARS frequently requires the assessment of a deceased person’s income tax to be audited which may easily add an extra month or two to the process;
– Only when the executor has either sold or received valuations of all assets and has quantified all the liabilities (including tax) of the estate, is he in a position to prepare a Liquidation and Distribution Account for the estate;
– The Liquidation and Distribution Account must be submitted to The Master for comment; The Master then issues his “query sheet” but it usually takes a few weeks before he does so;
– After receipt of The Master’s query sheet, the executor must arrange for advertisements to be placed to the effect that the Liquidation and Distribution Account will be lying for inspection for a period of twenty-one days from the date of publication of the advertisement;
– It is only after the twenty-one day advertising period has run its course that the executor can finalise the estate. In practice he will usually settle liabilities earlier if funds are available and may advance funds to heirs if there is a request or a need for him to do so. However, legally the executor is not obliged to do so.
From the above it will be clear that winding up a deceased estate is a process which requires the co-operation of The Master, SARS, banks, employers and financial institutions (for tax certificates and processing instructions), debtors and creditors. Unfortunately it is a fact that the co-operation and service one receives often leave a lot to be desired leading to time delays. So, while there are executors who do not work as efficiently as one may wish, ask your executor for reasons for any delays in the process before putting the blame on his shoulders.
