It's a really bad time to die without a will or an estate plan

Laura du Preez | 28 September 2021

Laura du Preez has been writing about personal finance topics for more than 20 years, including eight years as personal finance editor for two leading media houses.


The Covid-19 pandemic has exacerbated the slow turnaround times for winding up deceased estates at the offices of the Master of the High Court, resulting in long delays for those expecting to inherit from family members who die.

Recent events, including a ransomware attack on the Masters Office’s email system, is expected to make matters worse.

The Master’s Office is a statutory body that supervises the winding up of the financial affairs of a deceased person and protects the interests of their heirs.

Dying without a will or having a cash shortfall in your estate, can result in your family waiting even longer, and in some cases leaving them desperate for money, practitioners dealing with estates say.

YOUR FAMILY'S NEEDS COVERED

Your spouse or family could face severe financial difficulties after your death if you are the sole, or even main breadwinner, and you have not provided for immediate access to funds for them.

Your bank account will be frozen once the bank is notified of your death and cash, investments and property in your estate will be tied up until the estate is wound up.

Money in your retirement fund will also not be distributed to your family until the trustees have investigated who was dependant on you. This could take up to a year. 

Advances on inheritances can only be requested once the executor has been appointed.

A life insurance policy on which you name a family member, or members, as beneficiaries can provide some quick relief. 

Most policies pay out quickly and delays only arise if your death is unnatural and there needs to be a post-mortem or inquest. The benefit can be paid directly to the named beneficiaries avoiding the delays that come with waiting for cash from an estate. 

Read more: Why it is important to name beneficiaries on a life policy?

Louis van Vuren, the CEO of the Fiduciary Institute of Southern Africa (FISA), says before Covid, beneficiaries could expect an estate to be wound up in anything from five months to two years.

These timelines are now considered “optimistic” and it is not uncommon for any estate to take two years to wind up, he says.

Over the past 18 months, practitioners dealing with estates say the backlog of cases at the Masters Office has been exacerbated by:

  • An increase in deaths as a result of the pandemic and hence the number of estates that need to be processed;
  • The closure of Masters Offices around the country during the hard lockdowns;
  • The Masters Offices functioning at only 50% capacity during lower levels of lockdown and the inability of some staff to work from home;
  • The ongoing short-term closures of Masters Offices for decontamination after Covid cases among staff;
  • The suspension of two senior officials; and
  • The recent ransomware attack on the Department of Justice and Masters Offices’ email system.

What the backlog means for heirs

Christel Botha, fiduciary services manager at Alexander Forbes, says since the Covid-19 pandemic there have been extreme delays in getting necessary letters of executorship or approval of estate liquidation and distribution accounts.

She says some estates have waited seven months before a letter of executorship has been issued, while Van Vuren says some estates still do not have these letters a year after the death was reported.

An executor needs a letter of executorship before any bank accounts can be closed, assets can be transferred or urgent payments can be made from estates.

Botha says the ransomware attack will result in further delays as the offices are now issuing letters of executorships manually.

She says some families left destitute after the death of a breadwinner have been unable to sell property, as no offers can be accepted without the executor being appointed.

Van Vuren says it is “pot luck” as to how long it now takes to process an estate. Some Masters Offices are operating well, but many are not, he says.

Practitioners following up on estates are stymied by unanswered phones and emails, Masters Office closures, offices operating on short staff and the inability to make appointments, Van Vuren says.

He says the Masters Offices are piloting an online portal to which practitioners can upload documents to avoid them being left lying around for long periods and to monitor turnaround times.

However, he notes that poor management has dogged the Masters Offices since before Covid and there does not seem to be any urgency in dealing with the rotation of staff and their inability to work offsite.

The Masters Office was approached for comment, without success.

Cash shortfalls also delay estates

Van Vuren says while the Masters Office is the biggest problem, cash shortfalls in estates also cause delays in the finalisation of estates and pay outs to heirs.

Retirement savings and property are South Africans’ biggest assets. Your retirement savings do not form part of your estate and your property is not liquid – it cannot provide cash to pay debts, hospital bills and taxes until it is sold, he says.

Many middle-class families have cash shortfalls in their estates, Van Vuren says.

Renate Jute, the founder of trust and estate administration company Noble Prosperity, told a recent Financial Planning Institute (FPI) workshop on estates that a lack of tax planning is a common problem in estates.

People often forget to check what capital gains tax the estate will be liable for and this can cause estates, including very large ones, problems when it comes to paying the tax that is due, she says.

A will can prevent delays

Dying without a will can further delay the winding up an estate. If you die without a will, your worldly possessions are dealt with in terms of the Intestate Succession Act and the Master’s Office must appoint the executor.

Covid-19 has reminded us of our mortality and more people have been signing wills, encouraged by the recent wills week - a Law Society initiative that encourages law firms to offer free wills for a week in September.

However, many more South Africans still need wills. The Master’s Office has previously estimated that 70% of working South Africans are at risk of dying without a will.

Van Vuren says the Intestate Succession Act ensures that the assets of a parent who dies without a will are distributed among his or her spouse and children, but this includes adult children.

If the father of two adult children dies without a will, a house in his estate will be divided among his surviving spouse and the two children.  

This situation can become more messy if the adult children are from a previous marriage.

Executor appointment

Dying without a will also means your family will have to consult with the Master about the appointment of an executor – a difficult task when appointments cannot be made, offices are closed or working below capacity, Van Vuren says.

Family disagreements about who should be an executor also causes delays.

It is not a good idea to die without a will, Van Vuren says.  

Bad wills

It is also not a good idea to draw up a will without good advice.

Jute told the FPI conference that estates are delayed by problems arising from poorly crafted wills. She has encountered families who are unable to find the original will, or find wills with the incorrect ID numbers and clauses that cannot be implemented.

Van Vuren says you should always use trained adviser qualified in wills and estates for an important document like a will and you should plan your estate.

Estate planning is not only for the rich – it is critical if you have a small estate and minor children who will rely on the proceeds from the estate, he says.

Estate planning is about role playing what will happen when you die. What debts do you have, what cash is available to pay the debts in the estate and which assets will go where, Phia van der Spuy, founder of Trusteeze, told the FPI workshop.