WHAT HAPPENS TO MY BANK ACCOUNTS WHEN I DIE?
In previous articles we suggested that the best way to ensure that your assets are distributed as you want them to be distributed, is to draw up and maintain a will. Should you die without a valid will, your assets will be distributed in terms of the Intestate Succession Act . This may result in unpractical distribution of assets and may lead to someone inheriting whom you did not want to inherit.
In your will you have the choice to determine what should be done with your assets. You should also appoint an Executor who will distribute your assets and manage the administrative tasks in order to fulfil the stipulations of the will and finalise the administering of your will.
As mentioned in previous articles, the death must first be reported to the Master of the High Court and the original will (or the lack of relevant required documentation) must be sent to him. The Master will then formally appoint the Executor by sending him an Executor’s letter and allocating a unique estate number to the estate. This estate number wil then be used in all future correspondence with and enquiries from the Master’s Office.
What happens to my bank accounts?
The Administration of Estates Act determines that all bank accounts in the name of the deceased should be frozen and closed eventually, therefore it is extremely important that you make provision for your loved ones, so that they will have cash in hand when you pass away. Usually the accounts are frozen immediately after word of the passing has been received, so money can still be deposited, but no withdrawals will be allowed. As soon as the Executor has been appointed he/she should open a new bank account in the name of “Estate Late XYZ” according to the stipulations of the Administration of Estates Act. This is because you leave your assets to what forms your “estate”. A new bank account will be opened by the Executor and all monies of the deceased in any other bank accounts (as well as his/her spouse in the case of a marriage in community of property) will be transferred to the new bank account in the name of the estate. All estate funds will then be administrated in the estate’s bank account by the Executor until the Liquidation account (statement of assets and liabilities) is approved by the Master and has been open for inspection and remained unchallenged. The Executor will then be in a position to proceed with the distribution of estate assets and finalising of the administration of the estate.
Support to the next of kin
It may, however, take anything from 3 weeks to 3 months or longer for the Master of the High Court to formally appoint the Executor. The fact that the Administration of Estates Act requires that all bank accounts be frozen as soon as possible after date of death may result in the next of kin or other financially dependent parties not being able to access the funds of the deceased while awaiting the appointment of the Executor. In case of a marriage in community of property the bank accounts in the name of the surviving spouse will also be frozen and closed, according to the stipulations of the Administration of Estates Act, which may have dramatic consequences. Once the Executor has been appointed, he/she may start administering the estate assets, and only then will he/she be in a position to consider interim advances against inheritance. We therefore urge you to make provision for the time following your passing, so that your next of kin have money available for their immediate needs.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Source: NGL Attorneys
