A reader is finalising the estate after her late husband and would like to know how the cost of the exercise is determined, including expenses related to the fixed property they owned.
She says they were married in community of property and she has been receiving information from the attorney administering the estate but has difficulty understanding the implications.
See the reader’s question here.
A marriage in community of property results in one estate, with each asset owned in undivided half-shares by the respective spouses.
The result of this is that in the event of either spouse’s death the executor takes charge of the whole estate and needs to deal with all assets and liabilities of the joint estate.
The surviving spouse is firstly entitled to their undivided half-share in terms of the marriage in community of property and thereafter to anything they may inherit in terms of the deceased’s will.
According to the reader, the executor included a car and furniture that she owned – meaning it was in her name – in the inventory of the deceased estate.
Except for very limited instances, a spouse cannot be the outright owner of assets when married in community of property.
Each and every asset forms part of the joint estate and the other spouse owns an undivided half-share by operation of law.
The executor was, therefore, acting correctly by including these assets in the estate of her deceased husband.
The executor’s fee is determined by legislation at a maximum of 3.5% of the gross value of the assets dealt with by him in finalising the estate and VAT may be added if the executor is a vendor.
As the deceased was married in community of property the fee is calculated on the value of the joint estate.
The reader says the attorneys dealing with her late husband’s estate are charging an executor’s fee, attorneys’ fees and also transfer duty in the finalisation of the estate.
The fixed property in a deceased estate must be dealt with by a conveyancing attorney.
For example, the property may be sold and transferred or the title deed may be endorsed to reflect the acquisition of a further half-share by the surviving spouse.
If the executor is an attorney and also a conveyancing attorney he may act in both capacities.
Conveyancing fees are also dealt with in a prescribed manner and are usually determined by the value of the property being transferred.
Typically, no transfer duties are payable in a deceased estate.
The value of all assets in the estate, liabilities and expenses are set out in a document called the liquidation and distribution account.
This document also records how the wishes of the deceased have been executed, as contained in his will.
Any interested party is entitled to a copy of this account and it is also advertised before the assets are finally distributed in accordance with the account.
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