The aggregate of assets and liabilities of the deceased is termed the deceased estate. The deceased estate is not a juristic person. Consequently, the only legal person in connection with the estate is the executor in his representative capacity. The estate ‘vests’ originally in the Master of the High Court, and subsequently in one or more executors, appointed by the Master, who bear the responsibility of administering the estate:
· first, by gathering in all the assets;
· next, by liquidating the deceased’s liabilities; and
· lastly, by distributing the balance of the estate assets to the beneficiaries entitled thereto.
This administration procedure prevents the heir from initially owning the estate. The assets’ legitimate “owner” is the executor. However, the executor does not receive the assets’ beneficial use or enjoyment; they merely obtain the bare domain. Likewise, in his representative role, the executor is bound by the debts of the deceased. It follows that the executor alone can sue and be sued in respect of estate matters. Legal proceedings are brought or defended by the executor acting in a representative capacity, for the executor is the legal representative of the deceased.
Executor
The estates of all persons, whether dying testate or intestate, are administered and wound up by executors under letters of administration granted to them by the Master of the High Court. If the deceased’s will appoints specified persons as executors, the Master grants the letters to such persons; they are termed executors testamentary. Where no executors are appointed by will, and after consulting the heirs, the legatees and the creditors of the deceased, the Master appoints one or more persons as executors; they are termed executors dative. Executors testamentary who are conferred the power of assumption by a will may appoint co-executors; the latter are termed executors assumed.
Winding up
An estate is considered wound up once it has been taken into custody, all liabilities have been paid off, and the beneficiaries are free to enjoy it. First and first, the executor must collect all of the estate’s assets that are in the hands of other people, unless the Master of the High Court grants permission for those other people to keep the property. Life insurance benefits, retirement assets, and assets held in trust are not included in the ingathering process.
Debts due to the deceased include not merely pecuniary debts, but also any other obligations which can be specifically performed, such as an obligation to transfer land to the deceased. The executor may enforce such an obligation even if the deceased has died insolvent. It is not the duty of an executor to realise the estate assets—that is, to turn them into money—unless the will directs him to do so, or unless it is necessary to raise money in order either to pay estate debts or to divide the assets properly among the beneficiaries. If empowered by the will, the executor may carry on the business of the testator, but without the authority of the court he may not pledge the credit of the estate in order to maintain it as a going concern.
Liquidation
The next duty of the executor is to settle the liabilities against the deceased’s estate, after satisfying himself that the estate is solvent, and after framing and lodging a liquidation and distribution account, to which there has been no valid objection, with the Master of the High Court. An executor is liable in respect of any contractual obligation of the deceased which could have been enforced against him had he been alive, unless the obligation is of a personal nature or was clearly not intended by the parties to be transmissible. It follows that the executor must not only pay the pecuniary debts of the deceased, but must also perform obligations incurred by the deceased to transfer or to grant real rights in his property (like a sale of his land, or a contract to grant a servitude over his land, or a lease, or a mortgage).
The debts due by the estate include the deceased’s obligation to maintain his spouse and minor children (and, in appropriate circumstances, even major children) if the benefits coming to them from the deceased’s estate are insufficient to maintain them. The executor is liable for the debts only to the extent of the assets in the estate. If the estate is solvent, the executor must pay the creditors as soon as funds sufficient for that purpose have been raised out of the estate, subject to there being no valid objection to his/her liquidation and distribution account. If the executor does not have sufficient free cash in hand, he must sell assets belonging to the estate in order to raise the necessary amount, but he may not sell assets bequeathed as legacies unless there are no other assets to meet the debts.
If the estate is insolvent, the executor must inform the creditors of this fact in writing; thereafter, provided he is instructed by a majority in number and value of all the creditors to surrender the estate under the Insolvency Act, he must realise and distribute the estate in terms of the procedure laid down for insolvent estates in the Administration of Estates Act.
Distribution
After lodging a liquidation and distribution account to which there has been no objection, or any objections made have been overruled by the court, the executor must distribute the balance of the assets to the beneficiaries. Where there is no will, the assets are distributed among the heirs according to the rules of intestate succession; where there is a will, the assets are distributed according to the provisions of that will. In the latter scenario, the heirs receive the remaining amount after the legacies are paid or distributed first; as a result, the heirs are effectively residuary legatees.
The distribution of the assets to the beneficiaries is effected by transferring immovable property to them; by delivering movable property to them or by paying money to them as the case may be.
If a usufruct or other limited interest in immovable property has been bequeathed to any person, along with a direction that, upon the expiry of the interest, the property shall devolve upon some uncertain person, the executor must, instead of transferring the property, ensure that the terms of the will are endorsed against the title deeds. An endorsement is intended to safeguard the contingent rights of the uncertain persons; it does not vest the ownership or any other real right in them.