MASTER’S FEES INCREASE HECTICALLY!

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The Masters fee levied against estates of all persons who pass away after 1 January 2018 has been amended. Previously the maximum Masters fee which could be levied against an estate was R600.00.

As from 1 January 2018, as promulgated in the Government Gazette Notice number 41224 on 3 November 2017, the following structure is now applicable:

  • A minimum of R600 for all estates valued from R250 000.00 up to R400 000.00;
  • An additional R200 for every R100 000.00 above R400 0000.00;
  • A maximum of R7000.00.

Proper estate planning is therefore imperative.

Although death is an unfortunate, sometimes unforeseen and untimely part of life, it can be managed in order to save your loved ones unnecessary complications, if proper estate planning is implemented.

A deceased’s estate has to be administered in terms of the Administration of Deceased Estate’s Act, which can take anything from 6 months to two years depending on the complexity of the estate.

Further expenses and costs arise upon the death of a person, and must be taken into account when administering an estate. These affect the estate, the Executor, as well as the heirs, should effective planning not be done.

Expenses in a deceased estate over and above the Masters fees are:

1. Funeral Expenses

The first expense that the family of the deceased has to deal with after they pass away are the funeral expenses, these include but are not limited to:

  • The funeral parlor, burial/cremation and any other expenses associated
    with the funeral.

One can consider a funeral plan to alleviate these expenses.

2. Administration Costs/Expenses attached to winding up of the estate

The following administration costs are applicable to the winding up of an estate:

  • 3.5% Executor’s Fee on the entire value of the estate;
  • VAT on the Executor’s Fee;
  • Master’s Office fee as listed above;
  • Costs for the tax  practitioner to  provide  a  clearance  certificate from
    SARS;
  • 20% estate duty on all estates valued above R3.5 million.

Furthermore it is important to note that all Claims against the estate will effectively diminish the cash or asset value of the estate, as will the administrative costs/expenses listed above.

Should the estate not have cash available, then estate assets will have to be sold in order to cover the administrative costs/expenses and Claims against the Estate. Should the heirs wish to inherit/receive the tangible assets, then the heirs will need to pay a cash contribution into the estate in order to cover all these aforementioned costs/expenses and claims.

3. Transfer costs

Should there be immovable property in the estate that will not be sold but inherited by the heirs, then a Conveyancing Attorney needs to attend to the transfer of the immovable property once the winding up of the estate has been finalized. The transfer of the property will include transfer costs payable by the estate, such as:

  • Existing  mortgage  bond  settlement  figure  due  to  the  financial institution (if applicable);
  • Mortgage Bond  cancellation  costs  due to the  Conveyancer to cancel the existing mortgage bond (if applicable);
  • Attorney’s costs for transfer of immovable property;
  • Clearance figures (i.e. rates, taxes, water and electricity) due to the Local Authorities to obtain a clearance certificate.

NO transfer duty, however is payable, as same is exempt in terms of Section 9(1)(e)(i) of the Transfer Duty Act, 1949. In light of the above it is imperative to plan properly for the winding up of an estate and it is important to be aware of the cost and expense implication at the outset.

We at Louise Tonkin Incorporated can assist you with your estate planning, drafting of your Last Will and Testament, as well as with winding up of a deceased’s estate.

By | 2018-02-01T10:08:55+00:00 February 1st, 2018|Uncategorized|0 Comments

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