How can I check if my deceased son's estate was overcharged by the executor, and whether the payout was lawful?

The long answer

Estate law is a lengthy process to navigate, and the assets, debts and family dynamics of each estate are always complex. Challenging cases can take years to finalise. It is of course also true that the Master’s Offices with their paper files and inefficient systems have been in disarray for some years, but this is now being tackled. 

Executors are entitled to a maximum fee of 3.5% of the gross value of all assets in the estate (excluding VAT). This 3.5% is calculated before any debts are deducted. The Master of the High Court oversees and approves this amount. The executor must explain how they calculated their fee in the Liquidation and Distribution (L&D) Account, which must be submitted to the Master for approval within six months of being appointed as an executor.

The L&D Account must include all assets, liabilities, income, expenditure and what the executor proposes that the heirs will get. The executor’s fees are explicitly listed in the L&D account.  

The executor is also entitled to charge 6% (excluding VAT) on any income (such as interest or rental income) that the estate collects from the date of death until the estate is wound up. 

The Master examines this account to ensure it is correct and complies with the law. Once the Master is satisfied, the account “lies open for inspection” for a period of 21 days at the Master's office and the local Magistrate's office. During this time, any interested party, including beneficiaries, can inspect the account and lodge an objection with the Master if they believe the fees or any other aspect are incorrect.

The executor can only pay themselves the fee they are owed and distribute the inheritance to the heirs after the L&D Account has lain open without objection and the Master has given the final permission to distribute the estate.

So, the executor calculates their “cut” based on the 3.5% of the gross, and the 6% of income that comes in after the deceased’s death, but the Master must approve it all first. 

SARS explains that the last step in the administration of the estate is to get the Deceased Estate Compliance (DEC) letter from SARS, which tells the Master that all the tax obligations of the deceased person and his estate have been complied with. The deceased person and his estate are then deregistered for tax. 

Mohammed Moolla, a magistrate in Wynberg wrote a very useful article for de Rebus in 2022, explaining how a deceased estate is wound up. I quote from it: “When an account has been laid out for inspection and no objection has been lodged, the executor shall forthwith pay the creditors and distribute the estate among the heirs in accordance with the account. The executor must lodge with the Master the receipts and acquittances of such creditors and heirs” (my emphasis). Acquittances are signed documents showing that an heir (beneficiary) or creditor received their inheritance (assets) or payment (debts).

Moolla goes on to say that all of the deceased's property passes to the executor upon the issuance of the letters of executorship. According to the Act, the executor has complete authority over all assets that are a part of the estate. The executor's responsibilities include selling the property, realising the proceeds, paying off debts, and distributing the remaining amount to the heirs. Because of the Act's empowering provisions, the executor manages the deceased's property while standing in the deceased's shoes.

So if the executor were to overcharge, this would be picked up by the Master, who would not allow the estate to be distributed until he was satisfied that it was correct and according to the law.

Wishing you the best,
Athalie