When a person dies, their estate must be reported to the Master of the High Court within 14 days of the date of death. The estate consists of all the assets and liabilities that the deceased left behind, such as property, money, debts, etc. The Master of the High Court is the authority that oversees the administration and distribution of deceased estates in accordance with the law and the wishes of the deceased.
But what if the deceased owned nothing? What if they had no assets or only debts? Do you still have to report their estate to the Master? The answer is yes, you do. Here are some of the reasons why:
To confirm that the deceased had no assets
Even if you think that the deceased had no assets, you may not be aware of everything that they owned or were entitled to. For example, they may have had a bank account, a pension fund, a life insurance policy, or an inheritance that you did not know about. They may also have had assets that were jointly owned with someone else, such as a spouse or a partner. These assets may form part of their estate and may have to be dealt with accordingly.
By reporting the estate to the Master, you can confirm whether the deceased had any assets or not. The Master will require you to submit an inventory form (J243) that lists all the assets and liabilities of the deceased. If you are not sure what to include in the inventory, you can consult with a professional legal service that specialises in estate administration. They can help you identify and value the assets and liabilities of the deceased and prepare the inventory form for you.
To obtain a letter of authority
If the deceased had no assets or only debts, you may not need to appoint an executor to administer their estate. However, you may still need to obtain a letter of authority from the Master to deal with certain matters on behalf of the deceased. A letter of authority is a document that authorises you or someone else to act as a representative of the estate.
For example, you may need a letter of authority to:
- Close any bank accounts or cancel any contracts that were in the name of the deceased
- Claim any benefits or refunds that were due to the deceased
- Notify any creditors or debt collectors that the deceased had no assets to pay their debts
- Apply for an indemnity from SARS if the estate is insolvent
To obtain a letter of authority, you will have to report the estate to the Master and submit certain documents, such as:
- A death notice form (J294)
- A death certificate
- A marriage certificate or proof of marriage (if applicable)
- A next-of-kin affidavit form (J192) (if the deceased did not leave a will)
- A nomination form by the heirs for the appointment of a representative (if there is no will or no executor nominated in the will)
- An acceptance of trust form by the representative (J190)
- An inventory form (J243)
The Master will then issue a letter of authority in terms of Section 18(3) of the Administration of Estates Act 66 of 1965. This letter will specify who is authorised to act as a representative and what powers they have.
To protect yourself from liability
If you do not report a deceased estate, even if it has no assets or only debts, you may expose yourself to liability or legal action. For example:
- You may be held liable for any debts or taxes that were owed by the deceased
- You may be accused of fraud or theft if you dispose of any assets that belonged to the deceased without proper authority
- You may be sued by any beneficiaries or creditors who have a claim against the estate
- You may be fined or penalised by SARS or other authorities for failing to comply with your legal obligations
- By reporting the estate to the Master, you can protect yourself from these risks and ensure that you act lawfully and transparently.
How can an attorney help you?
You can obtain legal advice and professional assistance, who can help you report and finalise an insolvent or an assetless estate. They can also advise you on how to deal with any claims or disputes that may arise from such an estate. Their services would usually include the following services:
- Administration of Section 18 (3) estates: This is for estates that are valued at less than R250 000 and do not require an executor to be appointed by the Master of the High Court.
- Administration of deceased estates: This is for estates that are valued at more than R250 000 and require an executor to be appointed by the Master of the High Court. The attorneys can handle the entire process of winding up the estate, from reporting it to the Master, to paying the creditors, to distributing the assets to the heirs.
- Administration of insolvent deceased estates: This is for estates that have more liabilities than assets and require a special procedure to be followed. Your attorney can assist with applying for a sequestration order, appointing a trustee, and dealing with the creditors’ claims.
- Your attorney can also advise you on the tax implications of a deceased estate, such as estate duty, capital gains tax, and income tax.
For more information about your estate, handling grief, or funeral arrangements – visit our website at https://sonjasmith-funerals.co.za/
