Filing a late estate claim

What is a Deceased Estate?

A deceased Estate comes into existence when a person dies and leaves property or a Will. The Estate must then be administered and distributed in terms of the deceased’s Last Will and Testament. If there is no valid Will, it will be administered and distributed in terms of the Intestate Succession Act (Act 81 of 1987).

What happens to a person’s Estate when he or she dies?

At death the Estate of the deceased person is frozen. This means that the Master of the High Court’s permission must be obtained to withdraw funds from the deceased’s bank accounts or deal with any of the Estate assets.  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.

What steps must be followed when a person dies?

The Estate of a deceased person must be reported to the Master of the High Court within 14 days of the date of death. Any person who has control or possession of any property or a Will of the deceased, can report the death by lodging a completed death notice and other reporting documents with the Master of the High Court. These documents may be obtained from any Office of the Master, or Magistrate’s Office.

The Master then appoints an Executor of the Estate within two to three months, by issuing Letters of Executorship or Letters of Authority. The Letters of Executorship are issued to appoint an Executor if the value of the Estate is higher than R250 000. Letters of Authority deal with an Estate worth less than R250 000. The Letters of Executorship gives power to the Executor to act on behalf of the Deceased Estate. The duties of an Executor include, but are not limited to, the following:

• The identification and collection of the assets of the Estate. 
• The safeguarding and investment of those assets pending distribution to beneficiaries.
• The payment of debts and liabilities owed by the Estate.
• The filing of appropriate tax returns for the deceased and the Estate. 
• Ultimately the distribution of assets to beneficiaries in accordance with the provisions of the Will. 

Winding up the Deceased’s Estate

The Executor must place an advertisement in the Government Gazette and another newspaper, alerting all parties concerned, of the person’s passing. 

Thirty days after the advertisements has appeared, the Liquidation and Distribution Account must be submitted to the Master for approval. Once the Master has approved the Liquidation and Distribution Account, it must be advertised in the Government Gazette and a local newspaper.

The Liquidation and Distribution Account must be accessible for inspection for at least 21 days.

During this period late claims can be brought against the Estate.

Before the assets can be distributed to the beneficiaries in accordance with the Will, the Executor must pay the debts and liabilities owed by the Estate. If the process runs smoothly the Estate can be distributed 30 days after the advertisement of the Liquidation and Distribution account.

Creditors and an Estate:

The Executor is not obliged to pay a creditor until the account in which the claim is reflected has lain for inspection and any objections thereto have been disposed of.

Once the Executor has lodged his account, payment should be made if no successful objection has been made to it.

What is a late claim against a deceased Estate?

A late claim against a deceased Estate is when a creditor lodges a claim after the specified period.

If the Executor is of the meaning that the claim isn’t legal or reasonable, the Executor might refer it to the Master for a decision. 

If the Master is satisfied that the claim is valid and that the Executor has not yet distributed the assets, the Executor will have to reframe his account to include the claim. An example of where the Master might be satisfied that the creditor has a reasonable excuse for the delay, is if the creditor was out of the country at the time of the notice to the creditors. Costs entailed in reframing the account, re-advertising it, etcetera, will have to be paid for by the creditor.  

How is a late claim (but still before distribution) lodged against an Estate?

The claimant must lodge his claim with the Executor in writing.

If the Executor disputes any claim against the Estate, he must forthwith notify the claimant in writing by registered post and state his reasons for rejecting the claim. 

The Executor can then require the claimant to lodge, within a period specified in the notice, an affidavit in support of his or her claim. The affidavit must clearly give details of the claim as the Executor may indicate in the notice.

The Executor might also, with the consent of the Master, require the claimant or any other person who may give material information in connection with the claim, to appear before the Master or a magistrate nominated by the Master to be examined under oath.

Remedies and restitution in case of a dispute:

As mentioned, If the Executor disputes any claim against the Estate, he must forthwith notify the claimant in writing, by registered post and state his reasons for rejecting the claim. The creditor can then take legal proceedings to establish his or her claim.

The other option is to wait until the Executor has lodged his account and then avail himself or herself of the procedure of objecting to the account.

If the Master isn’t satisfied that the creditor has a reasonable excuse for the delay, the creditor will be liable for costs payable out of the Estate, because of the delay. 

If the creditor lodges his claim after distribution, he or she is not entitled to demand restitution from any creditor for any moneys paid to such claimant in pursuance of a valid claim against the Estate.

Where a creditor has lodged a valid claim after the distribution of assets by the Executor, there is still legal remedies.

Remedies for lodging a valid claim after distribution:

In the first instance the creditor will be entitled to participate in the distribution of any further assets of the Estate which for whatever reason, may not yet have been distributed or which may later be discovered.  

Secondly, he or she can recover from the heirs and legatees to the extent of their inheritances and legacies.

The action of recovery against heirs and legatees is based on the legal ground that because of the non-payment of the creditor’s claim the heirs and legatees have received more than they were entitled to. This action prescribes in three years. The prescription begins to run from the date of payment to the legatee or heir. But to claim from the heirs and legatees the creditor must allege and prove an enforceable claim against the deceased in a civil suit in court. 

It might be very costly and take a long time though.

Contact SA’s leading Wills and Estates Specialists, Capital Legacy, for more information.