If a retirement annuity, money market and other investments fall outside of an estate, does a unit trust also fall outside an estate? I have a Letter of Authority and I am submitting my claim for my late father to Old Mutual. They are now saying I must go back to the Master and the unit trust must be listed under assets. It took me 4/5 hours sitting at the Master’s office to obtain the letter after six months, can you imagine how long it would take to get an amended letter?
A deceased estate comes into being when someone passes away. At death, the estate of the person who has died is frozen. A death should be reported to the Master’s office within 14 days of the person passing away. This means that nobody can withdraw funds from the deceased’s bank account or deal with any of the deceased’s assets without having permission to do so. This permission is granted by the Master of the High Court.
The permission is granted once the Master has been notified of the death and has been supplied with a number of reporting documents. These prescribed documents vary depending on the size of the estate. For estates valued at more than R250 000 ‘letters of executorship’ will be issued and the full process prescribed by the Administration of Estates Act must be followed by the executor.
Where estates are valued at less than R250 000 a simpler process is applicable and a ‘letter of authority’ is granted. For the letter of authority to be granted a number of reporting documents are needed by the Master.
The main documents needed are:
- Death notice;
- Original or certified copy of the death certificate;
- Original or certified copy of marriage certificate (if applicable);
- Original will or a next-of-kin affidavit (if the deceased did not leave a valid will);
- Completed J243 inventory showing all the assets of the deceased;
- List of creditors of the deceased (if applicable); and
- Nominations by the heirs for the appointment of a Master’s representative in the case of an intestate estate or where no executor.
Importantly, a completed J243 inventory showing all the assets is needed. The Master, if satisfied that the estate is below the R250 000 threshold and that all the applicable prescribed documents have been received, then issues the letter of authority allowing that person to deal with those listed assets.
Certain assets, namely retirement funds, fall outside an estate and will flow by way of a beneficiary nomination. All other assets will form part of the deceased estate, including fixed property, vehicles, money market accounts, bank accounts, investments including share portfolios and unit trusts.
All of these investments will need to be listed on the J243 inventory schedule of assets presented to the Master in order for the letter of authority to be issued. Old Mutual, like all other providers, will ask to see the inventory form to ensure that the investment is listed on the list of assets the Master has granted authority over.
I am sorry to say that you will need to make a return trip to the Master’s office and get the list of assets updated with all of the relevant assets that fall within your late father’s estate. Only then will the providers accept your letter of authority to act over that listed investment.
I understand that currently there is a big delay at the Master’s office relating to Covid-19, but apparently this backlog is slowly being cleared.