Winding up an estate still takes longer than before the pandemic - what you can do

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The timelines for winding up an estate have improved since the peak of the Covid-19 pandemic but are still likely to take longer than before Covid, as pandemic backlogs and other problems persist.A year was a good expectation for an estate where the deceased left a sound will and the estate was dealt with by an experienced executor, Angelique Visser, Fiduciary Institute of Southern Africa (FISA) National Councillor, says.

During the pandemic, however, timelines deteriorated, making it common for any estate to take two years to wind up, FISA reported last year. Increased deaths during the pandemic were responsible for much of the delays, but the offices of the Master of the High Court (the Master’s Offices) also took much longer to issue the letters that appoint executors, approve the estate accounts and authorise the distribution of estate assets to the heirs.

Bank delays frustrate estate professionals

Recently FISA has expressed its frustration with delays caused by banks and banks have admitted they too were slowed up by Covid and are still catching up.

To wind up an estate, the executor of the estate needs information about, among other things, your deceased family member’s bank accounts and investments. The accounts then need to be closed and the balances or investments transferred into a bank account in the estate’s name.The executor also needs the tax certificates for those accounts in order to file the deceased’s tax return and the estate’s return.

Ian Brink, chairperson of FISA, said banks are dragging their feet on these three tasks.He says banks have different procedures which they sometimes change without consultation, leading to confusion among bank staff, as well as much frustration for FISA members trying to help families wind up estates.

Months to respond

Visser says practitioners are now able to obtain a letter of executorship from the Master’s Office within two to three weeks, but then battle for three to four months for a response from some of the banks. She says she has approached the senior management of several banks for assistance but there has been no improvement.

Aneesa Razack, chief executive officer of FNB Fiduciary, says Covid-19 negatively affected the industry’s processes for winding up deceased estates. In addition to the increase in deaths, there has been an increase in fraud and administrative hurdles that are frequently beyond the control of executors and/or banks, she says.

Razack says banks are working through the Banking Association of South Africa with the Chief Master's Office to address the challenges and minimise the adverse impact on the families of those who have died. FNB is also trying to shorten the time it takes to wind up estates by increasing its capacity to help its clients and improving the processing of smaller estates using digital platforms, she says.

Two weeks to close account

Graham Mcpherson, head of Nedgroup Trust, says once the correct documents have been submitted, it takes 14 days to close an account and pay any money into the estate account.

Delays are primarily due to outages on the Master’s Office portal that banks and estate practitioners use and the need to get all the necessary documents from different parties, Mcpherson says. All of this has been compounded by the large volumes of estates currently experienced, he says.

During the peak of the pandemic the Master’s Offices worked at 50% capacity and closed frequently when staff became ill. The offices and the Department of Justice’s computer system also suffered a ransomware attack in July 2021.

IT problems

The Master’s Offices are now open but continue to be plagued by computer problems, the recent FISA conference heard. Martin Mafojane, the Chief Master of the High Court, said the Master's Offices do not have stable and reliable IT infrastructure resulting in the offices’ portal frequently being unavailable to professionals dealing with estates.

He said the offices fall within the Department of Justice and Constitutional Development which has now realised that rather than relying on contractors, it needs to recruit competent, qualified and skilful people to provide the tools that the offices require.

Confidence lost

Bongiwe Adonis, assistant manager at the Cape Town Master of the High Court, said the Master’s Office realised that practitioners and the public had lost confidence in it and that it needs to modernise its systems.

Online registration of deceased estates and trusts is one goal, and the aim is to have a user-friendly system like the South African Revenue Service’s eFiling system, enabling registration of an estate from anywhere in the world, she says. But we are not there yet, an in the meantime, members of FISA, the Legal Practice Council and the South African Institute of Chartered Accountants can use a self-help system available at the Master’s Offices to register estates, she says.

The Master’s Offices have committed to processing applications registered this way within 10 days, Adonis says.

Estates that are not registered on this self-help system – for example when documents are couriered to the Master's Office have a 21-day turnaround time from the time, she said. If the timeline is not met, the Master’s Office must explain the delay, she says. Information is also being pulled from the Department of Home Affairs so that dependants can be identified and fraudulent activities minimised, Adonis says. With these and other initiatives, the Master’s Offices are headed towards better and improved services by 2025, she says.

You can help

Both Standard Bank and Nedbank said delays in dealing with deceased’s accounts are often a result of families not knowing what documents must be submitted when and by whom. Both banks provide step-by-step assistance helping you to understand the process and requirements, they say.

Standard Bank’s Ross Linstrom encourages families and executors to contact the bank as soon as possible for assistance and guidance. If emergency access to the deceased’s finances is required, this can be arranged if the necessary information is provided to the bank, he says.

This article was first published on SmartAboutMoney.co.zaan initiative by the Association for Savings and Investment South Africa (ASISA).

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