The Mercury - KZN's Leading Law Firms - April 2023

Winding up a deceased estate – what you need to know

VERNON PILLAY

LOSING a spouse or family member is traumatic enough. Being unprepared for the financial realities of death can make it even more devastating.

“The Covid-19 pandemic brought with it an increased awareness around our own mortality, and the importance of having your affairs in order to protect loved ones,” says Madelein Steenkamp, a legal specialist.

The moment a loved one passes away, their deceased estate comes into existence and must be wound up in terms of the Administration of Estates Act – and depending on the nature of the estate, the winding-up process can be lengthy. “The time required to wind up a deceased estate will be determined by, among other things, the size and complexity of the estate,” Steenkamp points out.

For example, if an estate is smaller than R250 000, the process is simpler and an executor does not need to be appointed. In this instance, a person (usually a family member), is authorised by the Master of the High Court to pay, collect debts and distribute the assets of the deceased to the heirs. For estates above R250 000, an executor needs to be appointed and the formal process of winding up of the estate needs to be followed.

Winding up a deceased estate

Steenkamp explains that a deceased estate must be reported to the Master within 14 days from the date of death. As a first step, the nominated executor will consult with the family of the deceased to obtain all necessary information to report the estate to the Master of the High Court in the jurisdiction, where the deceased was domiciled 12 months before their death.

They will then be issued the letter of executorship, which authorises the executor to act in respect of all matters pertaining to winding up the estate. This includes taking control of all assets of the deceased, opening an estate late bank account, notifying third parties of the death of the deceased, settling liabilities and the transfer or sale of assets.

She explains that the executor will also need to advertise the estate in the government gazette and a local newspaper. “This advertisement is for the attention of debtors and creditors of the deceased, and it informs them that they are granted a period of 30 days from publication to submit their claims against the estate,” she explains. The executor must also notify South African Revenue Service (Sars) of the death – this must be done even in cases where the deceased was not registered for tax purposes and no estate duty is payable.

An income tax return must be submitted for each year of assessment until such time as the estate becomes distributable.

Steenkamp says that even when an estate is finalised during the year of assessment, an income tax return must still be submitted for the full year of assessment during which the liquidation process was finalised.

Once the 30-day period of the advertisement has expired, and all claims have been lodged, the solvency of the estate is determined. “The executor will then proceed to draft the liquidation and distribution account, which reflects all the assets and liabilities of the deceased and sets out how the assets will be distributed to the heirs. The will of the deceased determines how assets are distributed. If the deceased died without a valid will, the Intestate Succession Act will apply and it affords formulas that determine how assets are to be distributed.”

The liquidation and distribution account is then lodged at the Master’s office for approval. Once approved, permission will be granted to advertise the account that will lay open for inspection for a period of 21

days. Interested parties should lodge their objections with the master before the 21-day period for inspection expires. If no objections are received in this period, the executor may then proceed to pay creditors and distribute the estate to the heirs in accordance with the liquidation and distribution account.

Once the estate has been liquidated and distributed, as well as all creditors have been paid, the executor must notify the Master, who will then – if satisfied – issue a filing slip to confirm that the estate has formally been closed.

The costs involved Steenkamp says that one of the costs to consider is the executor’s remuneration. The maximum tariff (excluding Vat) is determined by the Administration of Estates Act and is currently 3.5% of the gross value of the estate assets, and 6% of all incomes (for example: rentals, interest and dividends), which the executor collects on behalf of the estate from the date of the testator’s death until the date of final distribution of the estate. Estate assets exclude life insurance policies and retirement fund benefits payable directly to beneficiaries.

There are also several other expenses to take into consideration, such as advertising costs, transfer costs, valuation costs, mortgage bond cancellation costs, bank charges and funeral costs. Unless the executor qualifies for an exemption in terms of the Administration of Estates Act, there will also be the cost of providing security to the master for the value of the estate. The security must be in the form of a bond of security, issued by a short-term insurance company.

What the family needs to do

The deceased’s family must notify the executor of the death and obtain the death certificate. They should also get all relevant documents of the deceased together for the first interview with the executor, says Steenkamp.

“Managing day-to-day living expenses is important. Once the deceased’s bank account is frozen, it can take several months before the executor is able to pay creditors. Therefore, it is recommended that heirs plan to maintain these payments to avoid potential adverse interest charges and possible legal collection charges,” she says.

Heirs may find themselves

in a position where they still require access to funds from the estate to meet their day-today living expenses. “This can be particularly stressful as the family is faced with both the loss of a loved one and financial concerns.”

Pension fund benefits are typically not dealt with by the executor; the family must approach the pension fund directly to deal with the deceased’s retirement savings. This is a separate process to winding up the estate, and the family does not need to wait for the letters of executorship to be issued before they begin this claim process.

“The administration of a deceased estate can be a lengthy and complicated process that can take anything from six months to several years to finalise, depending on the complexity of the estate. Having your affairs in order will save your family a great deal of administrative effort and emotional stress. A qualified fiduciary expert will help you avoid the pitfalls of unintended consequences by assisting you with your will and estate plan to ensure that your loved ones are taken care of and that your estate is distributed as intended,” says Steenkamp.

Maynard Menon Govender Singh Incorporated

A proudly post-1994 Constitution compliant law firm

“THE dream of the freedom charter we may be – however, we certainly are also the nightmare of the dodgy and disingenuous operator.”

Maynard Menon Govender Singh Incorporated is incredibly unsupported, and perhaps unsurprisingly so, by significant entities.

However, the firm is equally and increasingly recognised and supported by the major banks, as well as several hand-picked national and multinational corporates. The firm refuses to “fall from the purer faith”. It flies by its own flag and makes its own steam.

It continues on an upward trajectory, spurred and cheered on by the dream of South Africa’s liberators – a country based on proper principles that are held together by a solid work ethic and underpinned by a commitment to a liberated country for all good South Africans.

The firm believes that the fertility of the soil today will determine the fruit of tomorrow, and is committed to seeing the dream become a reality.

‘What we nurture is what grows’

Maynard Menon Govender Singh Incorporated is a pre-emi-

nent, ground up and re-defined team of legal experts seeded and strengthened in the fertile and constitutionally-compliant post-1994 ground. It is a firm committed to purist egalitarianism, with solid principles that are never subservient to the relentless and often ruthless pursuit of profit.

“When I look at the profile, presence and reputation of this law firm, in my view, I think now this was the dream of our Freedom Charter.”

Dr Ela Gandhi – Peace activist and granddaughter of the late Mahatma Gandhi.

“I anticipate that this law firm will become a leading centre for critically-needed and progressive public engagement and debate.”

Professor Robert van Niekerk –Chair of public governance at the Wits School of Governance.

With a branch office in Cape Town completing the firm’s national footprint, and a 1 000-m2 purpose-built bespoke head office with state-of-the-art architecture, leading-edge systems and Zen energy, Maynard Menon Govender Singh Incorporated’s “showroom” nevertheless remains a servant of its “store room”.

The firm has a broad spectrum

of expertise across the legal spectrum. One way to start a working relationship is when you sell a property, remember that the seller has the prerogative to appoint the conveyancer.

“Maynard Menon Govender Singh Inc embodies the original spirit of the struggle for freedom and development that characterised the liberation of South Africa. Sadly, so much of that ethos and so many of those values dedicated to building the post-apartheid ‘good society’ have been lost in the headlong pursuit of naked primitive accumulation. Yet this law firm stands proudly and full-square behind those earlier and noble ideals, while remaining strongly embedded in our modern and volatile global and national context. This much is

evident in the striking architecture of its Westville head office, in the historic artefacts that pepper its walls and in the quality and care exercised by its diverse team of lawyers and specialised personable staff. It is without doubt, a beacon to the kind of company all South Africans should aspire to build. As a friend of the firm, I wish them well in the years ahead.”

- Vishnu Padayachee (1952 -2021) – former distinguished professor and Derek Schrier and Cecily Cameron Chair in Development Economics at Wits School of Economics and Finance. With seven full-time conveyancers, 15 full-time attorneys and a handpicked selection of industry expert consultants, the firm offers a full spectrum of legal services.

“This is one of the best law firms that I have dealt with. I recommend Maynard Menon Govender Singh without hesitation.”

Ian Odendaal, CEO at Omnigro Property Developers (Cape Town).

If this narrative is meaningful to you and moves you, Maynard Menon Govender Singh Incorporated looks forward to welcoming you at one of its offices for tea and a chat.

To make contact with the firm, call 087 057 5598. Please access the firm’s completely re–engineered website www.mmglaw.co.za

Getting divorced – you may need to pay spousal maintenance to your ex

FOURIE

BONNY

IN marriage, there is a reciprocal duty of support between spouses and this duty can extend beyond the marital relationship into divorce.

No matter which way you go about it, getting divorced is a hefty cost to bear, both emotionally and financially.

And the bottom line is that, more often than not, dissolving a marriage results in a drop in living standards for both parties.

A few divorce cases have even made headlines in South Africa recently, with ex-partners either being ordered to pay exorbitant maintenance costs to their former spouses or asking the court for such relief.

Legal experts say individual cases will depend a lot on the way a couple is married, the lifestyle they lived while together and the financial status of each partner.

Family law and divorce attorney, Simon Dippenaar explained that a reciprocal duty of support exists between spouses during their marriage. This is an automatic duty that arises by operation of law, and in certain circumstances can extend beyond the marital relationship into divorce in the form of spousal maintenance.

“Spousal maintenance may be permanent, but more commonly it is rehabilitative. This allows a party, usually the wife, who devoted her time and energy to raising the children of the marriage, to re-train or bring existing skills up to speed after a career break, with a view to resuming full-time employment.”

Or, the stated period might be until the children reach the age of majority, when it is assumed the woman can re-enter the workforce. The relevant factors that the courts take into account when making an order in terms of spousal maintenance are set out in Section 7(2) of the Divorce Act 70 of 1979.

One factor the court won’t consider, however, is who initiated the divorce action.

“A wife can file for divorce against her husband and still request spousal support. However, if, for example, a higher-earning wife has filed for divorce because of her husband’s infidelity or abusive behaviour and he requests maintenance, his request may be denied on the basis of his conduct.

“The converse is also true – a wife who has been unfaithful or unreasonable and caused her husband extreme pain may be refused maintenance, even if he is the one to initiate the divorce. However, cases like these are rare.”

Dippenaar says the final amount of maintenance calculated will be the result of a factual enquiry – this means that the income and expenses of the non or lower-earning spouse are calculated to arrive at the shortfall required each month.

To enable the court to make a judgment and grant a fair maintenance order, both parties are obliged to provide the court with proof of their expenses.

“The higher-earning spouse will then need to contribute towards that shortfall in line with their affordability.”

The process is not as simple as this explanation may suggest, and Dippenaar strongly recommends relevant parties consult a divorce attorney to obtain advice relevant to the specific case and legal needs.

A balancing act

The issue of spousal maintenance is quite a wide-ranging one, agrees Cape Town attorney Eduan Milner, as in short, neither spouse has a right to maintenance upon divorce. The right for a spouse to claim maintenance on divorce is a creation of statute.

“The language of Section 7(2) of the Divorce Act 70 of 1979 is clearly discretionary and the

ex-spouse seeking an award has no right as such. It is solely within the court’s discretion, even if to make no award at all.”

The most important factor a court keeps in mind is the balancing act of the requirements of “need” on the one hand versus the “ability to pay” on the other. So there can be no hard-and-fast rules.

“The court will take the needs of the one spouse into consideration, but will weigh that against the ability of the other spouse to pay. From a practical point of view, I have found that, if one spouse has certain maintenance needs, but the other spouse does not have the financial ability to meet them, then the court will obviously not be able to make an order whereby they are all fulfilled.”

However, if the ability to pay is there, it will be easier for the court to take into account factors such as the standard of living prior to the divorce.

“It is invariably in the situations where the one spouse has the ability to pay and they have maintained a high standard of living that you find the larger awards.”

As an illustration, he gives an example in which the parties have been married for 20 years and the wife had left her employment to care for the children and be a home executive. Here, there would be a successful claim for maintenance.

“However, the amount will be determined by the above factors, as well as the husband’s ability to pay that amount. The duration thereof will also be determined by the ability of the wife to re-enter the workplace and earn an income. Once again, that will depend, inter alia, on her age. A maintenance claim will potentially be different for a 35-year-old woman as opposed to a 55-yearold woman, even if all the other factors are the same.”

As a further example, Milner

says a 40-year-old woman who has not been employed for the last 20 years will have a potentially different claim than a 50-year-old woman who left the workplace five years ago and can easily re-enter it.

“So it really does depend solely on the circumstances of that particular marriage.”

Just like issues relating to the matrimonial home, there are also a number of assumptions when it comes to spousal maintenance after divorce. However, maintenance, says legal expert Maria Davey, is about need and affordability and “seldom happens these days”.

Rather, in cases where one ex-partner has to pay maintenance to the other, she says it is usually rehabilitative maintenance to allow one partner to up-skill in order to obtain employment and be self-supporting.

“When it comes to divorce, the principle of a ‘clean break’ is sought.”

COX YEATS ATTORNEYS

Offering the highest quality legal advice and representation since 1964

SITUATED in South Africa’s key economic hubs – Sandton (Gauteng), Cape Town and uMhlanga (Durban) – Cox Yeats is a dynamic national law firm that has earned a reputation for being a leader in commercial and personal legal services.

The firm offers the highest quality legal advice and representation to its clients, and the results have set it apart for more than 50 years.

Cox Yeats believes its success lies in the ability to provide appropriate legal counsel that is based on its clients’ needs, as well as the larger strategic picture. The firm aims to understand each client’s business intimately, as well as the commercial realities of the business environment and market in which they operate.

Service offering As a national law firm, Cox Yeats is well-positioned to render a range of legal services across provincial borders, regardless of location.

It services include business

law, competition law, construction law, engineering and infrastructure law, insurance law, corporate mergers and acquisitions law, insolvency and business rescue law, maritime and

international trade law, property law, empowerment and transformation, information technology law, litigation and alternative dispute resolution, medical schemes, natural resources and

energy, tax law, as well as trust and estate planning.

Awards, recognitions and accolades

Cox Yeats has been consist-

ently rated among the top law firms in the country, with many of its professionals listed in top legal publications as well as various industry-specific guides. The firm and several of its professionals have been recognised in national, continental and international legal directories and awards such as the Best Lawyers, Legal 500, Chambers Global, The African Legal Awards, and PMR Africa, among others.

In 2022, the firm won the Employee Wellbeing category in the 16th edition of the Standard Bank KZN Top Business Awards.

Cox Yeats has been rated the number one medium law firm in South Africa for the fourth consecutive year, after winning the PMR Africa 2023 Diamond Arrow Award. The firm was also named the 2023 Property and Insurance Law Firm of the Year by Best Lawyers.

For more information, visit www.coxyeats.co.za

Culture of exemplary service a core focus at Shepstone & Wylie

“WE PRIDE ourselves on our firm culture with a dynamic team of professionals and support staff, who work together to achieve our goals,” says Nigel Woodroffe, managing partner at Shepstone & Wylie.

The firm has a history of an extremely high staff retention rate.

“The number of long-term staff awards handed out annually is always a pleasant surprise. We have staff members who have been with the firm for as long as 35 years, and countless others who have been with us for many years.

A standout member of our team was Shane Dwyer – an extraordinary lawyer in our shipping and logistics team who was with us for 50 years before his passing last year.

“You can write the best business plan or strategy on a chart, but without the right people, those business plans become meaningless. The right people are everything in a business, which is why our key strategy is to attract and retain enough of the right people.

“Our approach is to employ standout industry specialists in their areas of expertise who are in the strongest position to provide the best practical and solution-driven advice to our clients.

“Shepstone & Wylie has been one of the leading law firms since 1892 and has grown from strength to strength, with 131 years of excellence and experience.”

The firm is consistently recognised as one of the country’s highest rated law firms. A recent feather in the cap is the recognition in the 14th edition of Best Lawyers – where 12 lawyers were acknowledged as leaders in their respective fields.

David Warmback, one of the firm’s leading commercial lawyers,

went on to receive the Lawyer of the Year Award in South Africa for commercial law.

Chambers and Partners is one of the most regarded accolades globally, and five partners from the firm received recognition this year.

Who’s Who Legal continued the winning streak by recognising Shepstone & Wylie as a leading law firm for labour, employment and benefits, as well as environmental law in Europe, Africa and the Middle East regions. The

annual PMR.africa survey awarded Shepstone & Wylie as a top law firm in KwaZulu-Natal, an accolade consistently achieved over the years.

Another core focus is the firm’s commitment to transformation and corporate social responsibility (CSR).

“We continually strive to reflect the demographics of the South African population and promote these objectives by actively recruiting, training, developing and retaining both professional

Here’s why it’s vital to have a valid will

EVERY year, tens of thousands of South Africans die without a valid will. The effects on their families and loved ones can be devastating, as they are often left without access to funds while the estate is being wound up – a process that can take up to a year or longer.

It doesn’t have to be that way. Melody Stander, a training specialist at life insurer FMI, says a will gives you the opportunity to ensure your loved ones are looked after once you’ve passed on, and helps prevent undignified disputes over the assets that you leave behind.

“Nobody likes to talk about death, but it’s a reality that we cannot ignore. Having a valid will in place means your loved ones have so much less stress to deal with after you’re gone,” says Stander. If you die without a valid

will, you are deemed to have died intestate. This means that you have no say over who inherits your worldly possessions. Instead, your assets and personal belongings will be divided based on the rules of intestate succession, which is dictated by the government.

Even if there is a valid will and if you are married in community of property, the joint estate will be frozen when one spouse dies. This means the surviving spouse’s bank accounts and assets will also be frozen, along with their deceased spouse’s.

Many people are also not aware that customary marriages are legally regarded as being married in community of property.

“Most South Africans who are married in community of property don’t realise the impact it will have on their family if a joint estate is frozen. During this time, the surviving dependants still need to pay bills, pay

for studies and put food on the table. How do they do that if their access to funds is cut off?” she adds.

Once you have a will in place, a good next step in estate planning is to have life insurance in place.

Many people die without having enough cash in their estate to pay for estate duty, debts and executor’s fees. In some cases, assets might need to be sold to settle these debts, leaving surviving dependants without a home or an income.

“Everybody wants to leave a legacy when they’re gone. There are few better ways of doing that than ensuring the future security of your family – by getting a will and looking after their financial needs, you will be doing exactly that.

That’s why it’s so important to speak to your financial adviser to ensure that your will is in place,” says Stander.

and support staff from previously disadvantaged and designated groups.”

Shepstone & Wylie embraces change and encourages diversity in the workplace and wherever possible.

The firm makes use of preferential procurement policies to advance transformation, and some of its CSR initiatives include dedicated investments into Wylie House, Durban and Coastal Mental Health, KZN Community Chest, the Natal University Development

Foundation, Operation Upgrade, and TAFTA.

“The overarching focus, however, is our clients. Without our clients’ loyalty, we would not be where we are today.”

The firm’s fundamental focus and values are to provide the most exemplary service with innovative, objective and practical advice which is strongly embedded in the culture of Shepstone & Wylie, to ensure the firm’s clients are continually satisfied with the highest standard of legal advice.

Adams & Adams – recognised leader in intellectual property law in Africa

ADAMS & ADAMS is a leading African law firm that specialises in intellectual property (IP), corporate and commercial services. The firm is internationally recognised for its work in South Africa and across the African continent, and prides itself on its valuable client relationships and highly regarded expertise of more than 200 professionals.

With offices in four major centres in South Africa, as well as associate offices across the continent, the firm serves as the gateway into Africa for IP clients – providing support in any of the jurisdictions on the continent and surrounding islands.

Recognised for excellence in global legal practice, Adams &

Adams is consistently ranked as a Tier-1 IP firm by industry bodies worldwide and is acknowledged by renowned peer-review indices. These include Legal 500, Chambers Global Directory, Managing Intellectual Property, Who’s Who Legal, IAM Patent 1000, World Trademark Review, and Best Lawyers.

As a firm strongly committed to promoting diversity and inclusion – both within the workplace and in IP across the continent – Adams & Adams continues to advance empowerment opportunities and its transformative goals.

Kelly Thompson is the first female chairperson of the firm in its 115-year history. Thomp-

son, an experienced trade mark litigation attorney, is one of 28 women who make up 48.28% of the firm’s partners.

In 2021, Adams & Adams was the only law firm globally to have a female lawyer recognised in all three categories of the internationally reputable World Intellectual Property Review (WIPR) Diversity 2021 publication. This includes Nishi Chetty, who was acknowledged as one of 20 Diversity Champions for her efforts in promoting the diversity and inclusion agenda in IP law. Recently joining the firm’s female partner complement is Udi Pillay, who was promoted from senior associate to partner in the trade marks department.

Pillay holds an LLB degree from the University of KwaZulu-Natal, and was admitted as an attorney in 2006 before starting her career as a junior attorney at Adams & Adams in 2007. Pillay is a member of the Legal Practice Council and a fellow of the South African Institute of Intellectual Property Law (SAIIPL). Specialising in trade mark searches/clearance, filing of trade mark applications, prosecution and maintenance of trade marks (in South Africa and abroad), assignments, recordals and renewals, Pillay assists clients from small start-up businesses to large corporations in various fields of business and countries.

With her skills and experi-

ence, Pillay grows the expertise at the firm’s Durban office, working alongside other partners Nishi Chetty, Vishen Pillay and Amina Suliman.

Demonstrating excellence in their respective IP fields and delivering the best results for their clients, the Adams & Adams Durban office is ready to assist any business in incorporating the protection and commercialisation of IP into their strategy and operations.

Contact Nishi Chetty, Vishen Pillay, Amina Suliman and Udi Pillay to learn more about how the firm can be of assistance to you and your business. Email dbn@adams.africa or call 031 536 3740.