She explains that an attorney was appointed as executor to deal with the administering of the estate, which included a fixed property among other assets.
The reader says her mother-in-law recently received a letter from the attorney setting out that she must pay R15 000 for the transfer of the property, which is valued at R490 000, and almost R19 000 in executor’s fees.
The surviving spouse is a pensioner and neither she nor her children can afford to pay these costs. The reader would therefore like to know whether these costs are justified.
Although she does not provide details of the other assets in the estate, the reader mentions that her in-laws were married in community of property.
In simple terms, this means that the couple pools their assets upon marriage with their estates becoming one.
See the reader’s question here.
When a person who is married in community of property dies, the executor takes charge of and is obliged to deal with the total, communal estate.
This is because each spouse owns an undivided half share in each asset in the joint estate.
If there are, for example, two vehicles, one cannot ascribe one vehicle to each of the spouses. Rather, each spouse owns an undivided half share of both vehicles.
This results in the executor charging his fee for the total, gross value of the communal estate.
Without knowledge of other assets in the estate, it’s not a simple matter to evaluate as to whether his fee is justified.
The reader does mention that, to her knowledge, the executor’s fees are 3.5 per cent of the total value of the fixed property.
Executor’s fees are charged on all assets, fixed and otherwise, that the executor is required to deal with, or that fall into the estate.
Where the executor is a VAT vendor, he or she will charge VAT on top of the 3.5 per cent.
If the fixed property is the primary asset in the estate, a quick calculation based on its estimated value shows that this is roughly the amount now due.
Certain assets are excluded from the administration and accordingly the executor’s fee.
It is worth mentioning that the costs associated with the finalisation of the estate, including executor’s fees and transfer costs, are to be paid by the estate.
If there is no cash in the estate, assets may have to be sold to cover costs. Beneficiaries may wish to cover these costs to prevent these assets from being sold.
In this instance, the fact that the surviving spouse does not have the financial means to contribute may result in the executor liquidating certain of the estate assets to cover costs.
Bear in mind that such costs do not only include his fees but also costs for advertising, bank charges and the like.
No transfer duty is applicable in a deceased estate for the transfer of a property to a beneficiary.
As with other assets, the fixed property will be owned in undivided half shares by both spouses.
The transfer then merely involves the endorsement of the title deed to reflect that the surviving spouse is now the full owner of the fixed property and the conveyancing attorney is also entitled to his or her fee to effect this endorsement.
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