Nobody likes the idea of thinking about their own death. It’s not a subject people enjoy discussing or planning. But the consequences of not doing that could be dire for the ones you leave behind. The loss of a loved one is an extremely challenging and emotional life experience. Coupled with the emotional trauma of loss, the aftermath of finalising an estate can prove to be challenging if one hasn’t planned and shared the information needed to close off their estate.
Heather Muller, Estate Products Head at FNB Fiduciary says, “Putting financial issues off to a later stage not only leaves families with unnecessary financial constraints but it can also lengthen the process of winding up an estate. Therefore, attending to your financial issues and sharing this information with your family will shorten the process without leaving your beneficiaries in a very difficult position.”
“As a trusted banking partner to our clients, we are committed to ensuring that estate funds and assets reach the rightful beneficiaries as soon as possible and part of our efforts is to address our client’s current challenges and minimise the adverse impact on beneficiaries and their families. We’ve worked hard on increasing our internal capacity to better shorten the time it takes to close out deceased estates and are improving the processing of less complex estates. Estate planning makes use of various structures, such as wills, trusts and life cover to ensure that the dependants are looked after if something should happen to the breadwinner. Help and guidance are essential for families to get their affairs swiftly in order, in the event of a breadwinner passing on and this is why it is equally as important to update a will annually and ensure that it reflects the wishes of the Testator or Testatrix,” adds Ester Ochse, Product Head of FNB Integrated Advise.
Below are 5 things your family needs to consider following the death of a loved one:
- Get a copy of the last valid Will – As the legal document which outlines the deceased person’s last wishes, obtaining a copy of the latest Will is the most essential part of the process. The Will is the document needed to determine the distribution of assets, the naming of beneficiaries, and the devolution of the estate. It should also name the executor or executrix of the Will and it will act as a guide for executing the deceased’s wishes.
“A Will is usually stored in a secure place at home or held in safe custody with the bank. If the deceased died without a Will, then the family should seek assistance from a deceased estates practitioner and the estate will be administered under intestate succession rules,” adds Muller.
- Consolidate all the costs – “The most pressing and immediate cost facing families after the death of a loved one is the funeral and the associated costs. Most funeral homes will not be prepared to wait for payment and will require a substantial deposit before proceeding with arrangements. To settle these costs, first determine whether the deceased held a funeral policy to help settle costs in full or in part. Or there may be an immediate expense benefit on any life cover policy that they may have had. This will go some way to offsetting the immediate costs, “adds Ochse.
In instances where no funeral cover is in place, then the estate is liable for the reasonable cost of the funeral. “It is important to keep all the receipts arising from the funeral and to submit a claim to be reimbursed from the estate once an executor has been appointed,” she says.
- Notify the nominated executor – The responsibility of notifying the nominated executor falls to the family of the deceased. They should provide the executor with the necessary information and documents needed to administer the estate, including details of all the assets and liabilities in the estate. The executor will require all this information to give effect to the provisions of the deceased’s Will or the Intestate Succession Act. This will also enable the nominated executor to attend to the reporting of the estate to the Master of the High Court, who will thereafter issue the nominated executor with the letters of executorship to commence the administration of the estate.
- Secure the day-to-day living expenses – Once the bank account is frozen, debit orders are not processed further. Executors are not able to pay creditors for several months after death and it is recommended that heirs plan to maintain the payments to avoid potential adverse interest charges and possible legal collection charges.
“Managing the day-to-day living expenses is important. Many spouses, partners, and children may find themselves in a position where they still require access to funds from the estate to meet their day-to-day living expenses. It can be particularly stressful if the family is faced with both the loss of a loved one and financial concerns,” explains Ochse.
- Pension and retirement savings – Pension funds benefits are normally not dealt with by the executor. The family need to approach the Pension Fund directly to deal with the deceased’s retirement savings. The family does not need to wait for the Letters of Executorship to begin this claim process.
“Each estate is unique and, therefore, it is difficult to provide an accurate estimate of the time the administration of a particular estate is likely to take. This will depend upon the nature and extent of the assets, liabilities, and possible complications. The executor is required to report to the Master of the High Court should he or she not be able to keep to the timeframes. Keep in mind that the executor can only start with the work required when the Letters of Executorship have been issued by the Master of the High Court. The executor is not legally authorised to deal with the assets, liabilities, and related complications until the letter of executorship is issued,” says Muller.
“There will be a time when we have to manage the estate on behalf of our families. To ensure that you and your loved ones are safe, understand what is needed to wrap up an estate. It is important that you look at your estate plan and liquidity in the estate on an annual basis and we encourage clients to contact their banks or advisors for any assistance on their estates.” concluded Muller.
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