Question posted in the Family Law category relating to Gauteng
I am trying to get a deceased estate finalised.
I have been told by the lawyer, who is the excutrix of the estate, that she needs to complete an L&D statement. We have given her all the information we have regarding any accounts and movables (which there were none), but she keeps stalling and not completing the statement asking for statements of a particular bank account, going back 15 years, which she already has the statements for as she got them from the bank herself.
There was a property that was sold and all the money went into an account that she holds. From that money she gave the other heir to the Will their share about 4 years ago, but is refusing to close it off and give the other share to us. Is she allowed to distribute money from this estate account without an L&D in place and signed off by the master of the court ? We have also agreed upon a split of money that was in another account and accepted that it can be taken off the final amount of this account she holds to be given to the other heir.
Also she says that interest made on the account during this time, part of it will have to be given to the law society. Is this correct? We understand that there is a 3.5% executors remuneration, but I don't know what this other payment is she is talking about.
You help would be most appreciative
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Information provided by client
Answer to the Question
When you say that "there was a property that was sold and all the money went into an account that she holds", I assume that you mean all of the money went into the Estate Late banking account which the executrix opened in the name of the estate? That's normal.
In general, an executor is only allowed to distribute assets / inheritances from the estate IF he/she gets the Master's written permission to do so. In general, the Master will only give such permission if the L&D account has already been drawn, and has lain for inspection, and no objections have been received.
In terms of section 26(1A) of the Administration of Estates Act, the Executor is warranted to release an amount of money or property from the estate of a deceased person, which the Executor deems to be sufficient to provide for the subsistence of the deceased’s family or household. The Executor may do so with the consent of the Master of the High Court and before the L&D Account has lain open for inspection.
The executor has the duty of lodging an L&D Account with the Master, which shall lie open for inspection by anyone with an interest in the estate, at the office of the Master. If the executor has failed in this regard, then you guys (as heirs) need to write to the Master to complain that the executor is not doing his/her job. The Master will then make directions which the executor will need to follow. An example of this would be to direct the executor to file the L&D account within a certain period of time.
"Also she says that interest made on the account during this time, part of it will have to be given to the law society." --> An attorney is required to pay the interest on any trust money over to the law society each month, but it is only on money which is sitting in the attorney's trust account. The money of an estate should NOT be sitting in an attorney's trust account, but rather in the Estate Late banking account which the executrix opened in the name of the estate - where the interest is for the benefit of the estate.
I think that you need to demand that the executor shows you where the estate's money is currently sitting. In trust, or in an Estate Late banking account. If the money is in trust, you need to complain to the Master.
I'm not 100% sure what you are talking about regarding the "split of money that was in another account", but in general, the heirs can only do this through a written redistribution agreement which is signed.
A redistribution agreement is signed when (for example) a house (worth R1m) and cash (R1.2m) is left to children A and B, and the children (who don't want to share the house) agree to a redistribution of the estate so child A can get the house and R100k and child B can get the R1.1m. In effect, the deceased's wishes are still being given effect to, however slightly different.
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Information provided by client
Thank you for responding.
To give a little history on this. This was the estate of my great uncle (died in 2005). At the time of his suspect death, he was with another woman for a few years. They were never married, they just lived together. He had changed his will during this time to split the property he had 60/40. 60% to my mother and 40% to this other woman.
My mother took on being the executor of the Will at the time of his death. Unfortunately the animosity between my mother and this other woman clouded my mothers judgement and this estate dragged on for quite a while. This other woman filed for my mother to be removed as executor (which I do agree as she was not doing the duties she should have to wind up the estate), and appoint another lawyer as executor. This other lawyer is a family friend of this other woman. So things have become a little heated and she has demanded things that were unnecessary, like details of my father (who was not stated in the will nor was a beneficiary)
My mother was not innocent in all this either, and also dragged her heals, and at times dug them in obstructing that this be finalised, but the other lawyer now does seem to be playing some delaying tactics (possibly in the hope my mother will die and the rest of the money give to the other beneficiary)
This is where I have taken over this as I could not bear this anymore, and trying to mediate this process to a conclusion.
To clarify a couple of points.
When the property was finally sold about 5 years ago the money was put into an FNB Money on Call account. This was an interest bearing account, but there is no information as to whether or not this was set up as an Estate Late account. The only statement we have shows the account is in her name. Only the money from the property that was sold was put into this account. And the other heir got their share from this almost straight away. And she has confirmed that was the case. The money that is sitting in this account is the left over that is owed to us.
During the time my mother was executor of the estate she did open an Estate Late account, and all monies with regards to pensions, insurance and balances from his personal account were transferred into. My mother, under bad advice from an accountant told her she could close the account and transfer the money to herself. The current executor of the Will got the statements from this bank account from the bank itself and during my mediation have agreed that the accumulated amount that was in the account be split as per the will. In this case it was stipulated as 50/50 for all cash and balances.
I hope this sheds a little more light on the current dilemma.
Answer to the Question
If the FNB Money on Call account was opened in the name of the estate, i.e. Estate Late Joe Blogs, then it is an estate account.
As you say that the statement shows that the account is in her name (I assume you mean the other woman's name) then I don't know if this is correct. If the money came from the sale of a property, then the money should end up in an estate account.
If you mean that the account is in the executor's name (as a lawyer) then this is definitely wrong and the money needs to be moved into an estate account.
"My mother, under bad advice from an accountant told her she could close the account and transfer the money to herself. " Bad advice, but it could have been done with the Master's approval, on condition that only enough was taken to cover her needs, and also to ensure that 60% was left for the other heir.
Information provided by client
The account is in the lawyer's name and has been for years as a result. No name change was done and no transfer was done to any other Estate Late account. So with regards to this do we have some leverage with regards to getting closure on this estate ? What standing do we have to demand loss of interest on the account? Would the lawyer have to make good on loss of interest for failing to open the wrong account?
All the money in the Estate Late account my mother opened was transferred to my Mother's account, but what was now agreed was that the mount owing to the other heir should be taken off the final amount in this Lawyer's account (Non-Estate account), before the rest is transferred to my mother.
Answer to the Question
Okay, so I assume that the money came from the sale of the property, and was received into the lawyer's trust account. That's normal. But then the lawyer should transfer that money into the estate account.
You can threaten to report the lawyer to the Legal Practice Council for failing to administer the estate properly, and/or failing to act correctly in a conveyancing matter.
What standing do we have to demand loss of interest on the account? --> You can try to sue the lawyer for the loss, but you need to realise that this will most certainly cause a delay in the finalisation of the estate.
All the money in the Estate Late account my mother opened was transferred to my Mother's account, but what was now agreed was that the mount owing to the other heir should be taken off the final amount in this Lawyer's account (Non-Estate account), before the rest is transferred to my mother. --> Okay, understood. I suppose that as long as the other heir is happy that he/she receives his/her money, there isn't really any issue.