Master moves to alleviate estate headaches
Envisages policy change to hold ‘agents’ accountable and speed up the finalisation of estates, Fisa conference hears.
The Master’s Office may soon announce a major policy change regarding the appointment of ‘agents’ acting on behalf of executors of deceased estates, delegates to the Fiduciary Institute of Southern Africa (Fisa) conference heard.
This comes amid uncertainty about the appointment of executors and agents, requirements related to the lodging of security, and fraud in its own offices.
The master hopes that Regulation 910 will soon be recalled in its totality.
Regulation 910, previously issued by the minister of justice in terms of the Attorneys, Notaries and Conveyancers Act, was aimed at enabling attorneys to administer estates. The act was later repealed, but Regulation 910 was still applied. It indicates who may administer estates but does not explicitly exempt any of the parties from lodging security.
The Administration of Estates Act on the other hand provides for three categories of executors – people who are permanently disqualified, people who administer estates without security (such as the spouse, direct family or anyone exempted from lodging security in the will) or people who administer estates with security. The master may demand security from the executor to protect the beneficiaries or creditors in the event that something goes wrong – usually through a type of short-term insurance cover called a court bond.
The master may insist that security be provided even where a will specifies otherwise, but acting chief master Tessie Bezuidenhout says officials have not been using their discretion as required and have demanded security in cases where it isn’t appropriate (from a surviving spouse, for example). Officials have sometimes also required that an agent be appointed for an estate where the value is more than R250 000 to be administered, even though neither the act nor Regulation 910 provides for the appointment of an agent.
“It only deals with an appointment of an executor or a representative,” says Bezuidenhout, explaining that need for security or the appointment of agents is something that officials often thumb-suck.
She adds that her office has had various challenges in this regard.
“We don’t appoint the agent as an executor. We appoint the executor.”
Queries indicate that when a beneficiary complains that the executor hasn’t lodged a liquidation and distribution (L&D) account it is often because the executor is waiting for their attorney (the agent) – but the master has no recourse against agents who don’t do their work.
“We’ve got recourse against the executor, but not against the agent, and that for us is a severe problem,” she says.
Another concern is that some officials in the Master’s Office are referring clients to agents in exchange for kickbacks.
Bezuidenhout says these agents often charge R6 000 before any work is done. The executor quickly obtains a letter of executorship, but the agent does nothing thereafter. No L&D is lodged, and the estate isn’t finalised.
“Once again we’ve got no recourse against the agent. We’ve only got recourse against the appointed executor.”
The proposed change in policy will be discussed with the industry at workshops once the minister gives the green light for the change.
“They have indicated that they are quite willing, and they support where the master wants to go with this.”
Bezuidenhout says to ensure that there are no more uncertainties or differences of opinion, the Master’s Office wants Regulation 910 to be recalled in its totality and to apply only the Administration of Estates Act, which provides for people doing estates without security. Every executor will go through the Master’s Own Verification Technology (Movit) system to ensure that the appointed executor has been verified and their details checked. Where a person cannot obtain security, that person will be referred to an attorney who can provide security.
However, the moment an agent provides security, they will be appointed as executor so that the master will have recourse if something goes wrong.
“We fully believe that this will also curtail the long process that some estates are really going through in South Africa,” says Bezuidenhout.
Some estates take two to three years to complete even where there is no good reason for the delay.
If the minister agrees to the change, the master will issue a directive outlining the requirements for appointment as a trusted executor.
Ingé Lamprecht / 26 September 2018This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.