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PVL3701 Assignment 1 (ANSWERS) Semester 1 2024 - DISTINCTION GUARANTEED
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AN OVERVIEW ON THE DISTRIBUTIONOF AN ESTATE OF A PERSON DYING
WITHOUT OR WITH A WILL
Access to justice for all
,
, 1
INTESTATE AND TESTATE SUCCESSION:
AN OVERVIEW
1.1 Introduction
For purposes of this note the term “succession” refers to the process whereby the heirs of
a deceased person succeed to the assets which the deceased left behind at death. Heirs can
only succeed to the assets of a deceased person which remain after all the estate expenses
and debts which the deceased had at date of death are fully paid.
The term “estate” refers to all the assets and liabilities which a deceased person leaves
behind at his or her death. If the deceased’s assets are more than his or her debts, we
speak of a solvent estate, and where the deceased’s debts are more than his or her assets,
we speak of an insolvent estate. In the latter instance all the assets of the deceased must
be sold and the proceeds thereof must be divided among the deceased’s creditors. In an
insolvent estate there are usually no assets left that can be inherited by the heirs.
The process in terms of which the deceased’s assets are collected, all debts and
administration costs are paid, and the balance of the estate assets transferred to the heirs,
is known as the administration of the estate. The person appointed to administer the estate
of a deceased person is known either as an executor (where the value of the estate assets
exceed R125 000) or a Master’s Representative (where the value of the estate assets are
less than R125 000).
The heirs to an inheritance from a deceased estate are determined either in a valid will
left by the deceased, or failing which, as determined in terms of the rules of intestate
succession. When the heirs are determined in a valid will left by the deceased we speak
of testate succession and when the heirs are determined by application of the rules of the
Intestate Succession Act, 81 of 1987 it is referred to as intestate succession. Both testate
succession and intestate succession will be dealt with more fully further on in this note.
, 2
1.2 What happens to a person’s estate when he or she dies?
At death the estate of the deceased person is frozen, and no-one may withdraw funds
from the deceased’s bank accounts or deal with any of the estate assets without the
necessary permission from the Master of the High Court. If the deceased was married in
community of property, the joint estate is frozen. This situation often creates hardship for
the surviving spouse, especially where the bank accounts were all in the name of the joint
estate or in the name of the deceased.
1.3 Reporting of the estate to the Master of the High Court
In terms of the Administration of Estates Act, 66 of 1965, if a person dies in the Republic
and leaves any assets or a will (or both), then his or her estate must be reported to the
Master of the High Court within 14 days after his or her death. The duty to report the
estate rests on the surviving spouse (if any), alternatively on the nearest relative or
connection who resides in the area where the death occurred. If there is no such relative
or connection to report the estate, then the duty rests on the person who immediately after
the death has control of the premises at which the death occurred.
In practice it often happens that where the deceased nominated a bank, trust company or
an attorney as executor in a will, that the family usually reports the death of the deceased
to the nominated executor, who in turn then reports the estate to the Master of the High
Court on behalf of the family.
When reporting an estate to the Master there are a number of prescribed forms and
documents which must be lodged in the reporting process.
The deceased’s ordinarily place of residence, and not the place where he or she died,
determines which Master has jurisdiction and consequently where the estate must be
reported. It is the Master in the area of jurisdiction where the deceased person normally
resided to whom the estate must be reported.
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