FNB highlights the steps that need to be followed to finalise the estate
The most pressing and immediate cost facing families after the death of a loved one is the funeral and the associated costs.
The loss of a family member or a loved one is a challenging and emotional life experience.
“Help and guidance is essential for families to get their affairs swiftly in order. Putting financial issues off to later will not only leave families with unnecessary financial constraints, but can also lengthen the process of winding up an estate. This is why it’s important to update a will annually and ensure it reflects the wishes of the testator or testatrix,” says Matlhodi Leteane, FNB fiduciary.
Winding up a loved one’s estate takes time, but FNB highlights the steps that need to be followed to finalise the estate.
Ester Ochse, product head at FNB money management, says, “The most pressing and immediate cost facing families after the death of a loved one is the funeral and the associated costs. Most funeral homes wont be prepared to wait for payment and require a substantial deposit before proceeding with arrangements.
“To settle these costs, first determine whether the deceased held a funeral policy to help settle costs in full or in part. There may be an immediate expense benefit on any life cover policy that they may have had, which will go some way to offsetting the immediate costs.”
When no funeral cover is in place, the estate is liable for the reasonable cost of the funeral. It’s important to keep all the receipts arising from the funeral and to submit a claim to be reimbursed from the estate once an executor has been appointed.
Get a copy of the last valid will
As the legal document that outlines the deceased person’s last wishes, getting a copy of the latest will is the most essential part of the process. The will is needed to determine the distribution of assets, naming of beneficiaries, and devolution of the estate. It should also name the executor or executrix of the will, and it acts as a guide for executing the deceased’s wishes.
“A will is usually stored in a secure place at home or in safe custody with the bank. If the deceased died without a will, the family should seek assistance from a deceased estates practitioner and the estate will be administered under intestate succession rules,” says Leteane.
Notify the nominated executor
The responsibility of notifying the nominated executor falls to the family of the deceased. They should provide the executor with the information and documents needed to administer the estate, including details of all the assets and liabilities in the estate. The executor will require all this information to give effect to the provisions of the deceased’s will or the Intestate Succession Act. This will also enable the nominated executor to attend to the reporting of the estate to the Master of the High Court, who issues the nominated executor with the letters of executorship to start the administration of the estate.
Secure the day-to-day living expenses
Once the bank account is frozen, debit orders are not processed further. Executors are not able to pay creditors for several months after death and it’s recommended that heirs plan to maintain the payments to avoid potential adverse interest charges and possible legal collection charges.
“Managing the day-to-day living expenses is important. Many spouses, partners and children may find they still require access to funds from the estate to meet their day-to-day living expenses. It can be particularly stressful if the family is faced with the loss of a loved one and financial concerns,” says Ochse.
Pension and retirement savings
Pension fund benefits are normally not dealt with by the executor. The family needs to approach the pension fund directly to deal with the deceased’s retirement savings. The family does not need to wait for the letters of executorship to begin this claim process.
Each estate is different and, therefore, it’s difficult to provide an accurate estimate of the time the administration of a particular estate is likely to take. This will depend on the nature and extent of the assets, liabilities and possible complications. The executor is required to report to the Master of the High Court should they not be able to keep to the time frames. The executor can only start with the work required when the letters of executorship have been issued. The executor is not legally authorised to deal with the assets, liabilities and related complications until the letter of executorship is issued.
“There will be a time when we have to manage the estate on behalf of our families. To ensure that you and your loved ones are safe, understand what is needed to wrap up an estate,” says Leteane.
Article Courtesy of Business Day