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We aim at rescuing companies, businesses and individuals to prevent liquidation and / or sequestration.

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Enco administrators employs a professional and dedicated team which is able to handle all aspects of business recovery and insolvency with empathy.

 

FAQ - We answer some of your questions

Typical questions we hear from clients are the following:

DECEASED ESTATES

What is a deceased estate?

A deceased estate comes into existence when a person dies and leaves property or a document, which is a will or is intended as a will. Such an estate must then be administered and distributed in terms of the deceased's will or, in the absence of a valid will, in terms of the Intestate Succession Act, 81 of 1987.

The procedure that must be followed to administer a deceased estate is prescribed by the Administration of Estates Act, 66 of 1965 (as amended).

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Which deaths must be reported to the Master of the High Court?

The death of a person who dies within the Republic of South Africa and leaves property or any document that is a will or is intended as a will; and the death of a person who dies outside of the Republic of South Africa, but who leaves property and/or any document that is a will or is intended as a will, in the Republic of South Africa, must be reported to the Master of the High Court.

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Where must estates be reported?

Where the deceased was living in the Republic of South Africa, the estate must be reported to the Master of the High Court in whose area of jurisdiction the deceased was living at the time of his/her death. Where the deceased was not living in the Republic of South Africa at the time of his/her death, the estate may be reported to any Master of the High Court, provided it is reported to only one Master. An affidavit in which it is stated that the letters of executorships have not already been granted by any other Master of the High Court in the Republic of South Africa must accompany the reporting documents. From 5 December 2002, all Magistrates' Offices are designated service points for the Master of the High Court and estates can be reported there. However, these service points have limited jurisdiction. All estates with wills, as well as estates that exceed R50 000 in value, will be transferred to the provincial Master's Office. Therefore, it is advisable to report these estates directly the Master's Office.

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When and by whom must estates be reported?

The estate of a deceased person must be reported to the Master of the High Court within 14 days of the date of death. The death is to be reported by any person having control or possession of any property or documents that is or intends to be a will of the deceased. The estate is reported by lodging a completed death notice with the Master. The death notice and other reporting documents may be obtained from any Office of the Master of the High Court or Magistrate's Office.

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How do you report an estate to the Master or to a service point of the Master of the High Court?

The reporting documents will differ slightly depending on the value of the estate and the type of appointment required. If the value of the estate exceeds R125 000, letters of executorship must be issued and the full process prescribed by the Administration of Estates Act must be followed.

However, if the value of the estate is less than R125 000, the Master of the High Court may dispense with letters of executorship, and issue letters of authority in terms of Section 18(3) of the Administration of Estates Act, (Act 66 of 1965). The Magistrates' Office service points will only have jurisdiction if the deceased did not leave a valid will and the gross value of the estate is less than R50 000. Letters of authority entitle the nominated representative to administer the estate without following the full procedure set out in the Administration of Estates Act.

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What documents will be required in the event of the value of the estate exceeding R125 000?

The following reporting documents are required:

  • Completed death notice
  • Original or certified copy of the death certificate
  • Original or certified copy of a marriage certificate (if applicable)
  • All original wills and codicils or documents intended as such (if any)
  • Next-of-kin affidavit if the deceased did not leave a valid will
  • Completed inventory form
  • Nominations by the heirs for the appointment of an executor in the case of an intestate estate, or where no executor has been nominated in the will, or the nominated executor has died or declines the appointment.
  • Completed acceptance of trust as executor forms in duplicate by the person(s) nominated as executor(s)
  • Undertaking and bond of security, unless the nominated executor has been exempted from providing security in the will, or is the parent, spouse or child of the deceased
  • Affidavit by the next-of-kin of a deceased person who has died without leaving a valid will, to the effect that the estate has not already been reported to another Master or service point (if applicable)

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What documents will be required in the event of the value of the estate being less than R125 000?

The following reporting documents are required:

  • Completed death notice
  • Original or certified copy of the death certificate
  • Original or certified copy of a marriage certificate (if applicable)
  • All original wills and codicils or documents intended as such (if any)
  • Next-of-kin affidavit if the deceased did not leave a valid will
  • Completed inventory form
  • List of creditors of deceased (if applicable)
  • Nominations by the heirs for the appointment of a Master's representative in the case of an intestate estate or where no executor has been nominated in the will or the nominated executor declines the appointment.
  • Undertaking and acceptance of Master's directions
  • Declaration confirming that the estate has not already been reported to another Master's Office or service point of the Master

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Intestate Succession

What happens if I do not leave a will (intestate succession)?

If you pass away without leaving a valid will, your estate will devolve in terms of the rules of intestate succession, as stipulated in the provisions of the Intestate Succession Act, (Act 81 of 1987). In case of a marriage in community of property, one half of the estate belongs to the surviving spouse and, although it forms part of the joint estate, will not devolve according to the rules of intestate succession. For more information on the Intestate Succession Act, please consult the Act or your legal representative.

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In the event of intestate succession, what happens if the deceased is survived by a spouse or spouses but not by (a) descendant/s?

The spouse or spouses will be the sole intestate heirs.

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In the event of intestate succession, what happens if the deceased is survived by a descendant/s, but not by a spouse?

The descendant will inherit the intestate estate.

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In the event of intestate succession, what happens if the deceased is survived by a spouse/s as well as (a) descendant/s?

The spouse or spouses inherit the greater of R125 000 per spouse or a child's share, and the children the balance of the estate. A child's share is determined by dividing the intestate estate by the number of surviving children of the deceased and deceased children who have left issue, plus the number of surviving spouses.

Example of the child's share in the event of a polygamous marriage:

In this case the value of the intestate estate is R1 000 000. The deceased is survived by two spouses and three children. A child's share amounts to R200 000 (being R1 000 000 divided by five: the three children and the two spouses). The child's share is greater than R125 000. Therefore each spouse will inherit R200 000 and each child will inherit R200 000 (R1 000 000 less R400 000 to the spouses, divided by three).

Example of the child's share in the event of a monogamous marriage:

In this case, the same calculation will apply as in the previous example, only the child's share is calculated by dividing the value of the intestate estate by four. The surviving spouse and each child will each inherit R250 000.

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In the event of intestate succession, what happens if the deceased leaves no spouse or descendants, but both parents are still alive?

His/her parents will inherit the intestate estate in equal shares.

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In the event of intestate succession, what happens if the deceased leaves no spouse and no descendants but leaves one parent, while the deceased parent left descendants (brothers/sisters of the deceased)?

The surviving parent will inherit one half of the intestate estate and the descendants of the deceased parent the other half.

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In the event of intestate succession, what happens if the deceased leaves no spouse or descendants but leaves one surviving parent, while the deceased parent did not leave any other descendants?

The surviving parent will inherit the whole estate.

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In the event of intestate succession, what happens if the deceased does not leave a spouse or descendants or parents, but both his parents left descendants?

The intestate estate will be split into equal parts. One half of the estate is then divided among the descendants related to the deceased through the predeceased mother and the other half among the descendants related to the deceased through the predeceased father.

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In the event of intestate succession, what happens if the deceased does not leave a spouse, descendant or parents, but only one of the predeceased parents left descendants?

The descendants of the predeceased parent, who left descendants, will inherit the entire intestate estate.

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In the event of intestate succession, what happens if the deceased does not leave a spouse, descendants, parents or descendants of his parents?

The nearest blood relation inherits the entire intestate estate.

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In the event of intestate succession, what happens if the deceased is not survived by any relative?

Only in this instance will the proceeds of the estate devolve on the state.

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What is the position with regard to an illegitimate child of the deceased?

An illegitimate child can inherit from both blood relations, the same as a legitimate child.

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What is the position with regard to an adopted child of the deceased?

An adopted child will be deemed to be a descendant of his adoptive parent or parents; and not to be a descendant of his natural parent or parents, except in the case of a natural parent who is also the adoptive parent of that child or was, at the time of the adoption, married to the adoptive parent of the child.

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Will

What is a will?

A will is a specialised document, which should preferably be drawn up by an expert like an attorney or trust company.

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Who is competent to make a will?

The person who draws up a will is called the testator/testatrix. All persons 16 years and older are competent to make a will in order to determine how their estate should devolve upon their death, unless they were mentally incapable of appreciating the consequence of their actions at the time of making the will.

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Who is competent to act as a witness to a will?

All persons of 14 years and over are competent to act as a witness to a will, provided that at the time they witnessed the will they were not incompetent to give evidence in a court of law.

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What are the requirements for a valid will?

Since 1 January 1954 all wills must be in writing. They can be written by hand, typed or printed. The signature of the testator/testatrix must appear at the end of the will. This signature must be made in the presence of two or more competent witnesses. The witnesses must attest and sign the will in the presence of the testator/testatrix and of each other. If the will consists of more than one page, each page other than the page on which it ends must be signed anywhere on the page by the testator/testatrix. Although the testator/testatrix must sign all the pages of the will, only the last page of the will needs to be signed by the witnesses.

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What are the requirements for a valid will if the testator/testatrix cannot sign his/her name?

If the testator/testatrix cannot sign his/her name, he/she may ask someone to sign the will on his/her behalf or he/she can sign the will by making a mark (a thumbprint or a cross). When the will is signed by someone on behalf of the testator/testatrix or by making a mark, a Commissioner of Oaths must certify that he/she has satisfied him/herself as to the identity of the testator/testatrix and that the will so signed is the will of the testator/testatrix. The Commissioner of Oaths must sign his/her certificate and he/she must also sign every other page of the will, anywhere on the page. The Commissioner of Oaths must also be present when the will is signed and must append his/her certificate as soon as possible after the will is signed even if the testator/testatrix dies soon after signing the will.

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What is a codicil?

A codicil is a schedule or annexure to an existing will, which is made to supplement or amend an existing will. A codicil must comply with the same requirements for a valid will. A codicil need not be signed by the same witnesses who signed the original will.

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What if I want to amend my will?

Amendments to a will can only be made while executing a will or after the date of execution of the will. Amendments to a will must comply with the same requirements for a valid will and, if a testator/testatrix cannot sign it, with the same requirements that apply for persons who cannot sign a will. When amending a will, the same witnesses who signed the original will need not sign it again.

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Must I amend my will after a divorce?

A bequest to your divorced spouse in your will, which was made prior to your divorce, will not necessary fall away after divorce. The Wills Act stipulates that, except where you expressly provide otherwise, a bequest to your divorced spouse will be deemed revoked if you die within three months of the divorce. This provision is to allow a divorced person a period of three months to amend his/her will, after the trauma of a divorce. Should you, however, fail to amend your will within three months after your divorce, the deemed revocation rule will fall away, and your divorced spouse will benefit as indicated in the will.

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Who is disqualified from inheriting under a will?

The following people are disqualified from inheriting under a will: a person or his/her spouse who writes a will or any part thereof on behalf of the testator; and a person or his/her spouse who signs the will on instruction of the testator or as a witness. Consult your legal representative for more information in this regard.

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Customary Law

What happens in the case of a customary union?

When a spouse alleges that he or she is a partner in customary union, proof in the form of a certificate of registration must be lodged (see Section 4(5)(b) of the Recognition of Customary Marriages Act 120 of 1998, as amended).

Application for a registration certificate can be made to the Department of Home Affairs. The service point of the Master can assist with advice in this regard. When a certificate of registration cannot be lodged, the spouse must approach an appropriate court for a remedy (see Section 4(7) of the Recognition of Customary Marriages Act 120 of 1998, as amended). The abovementioned reporting documents must be posted to, or handed in at the Master's Office or service point.

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How has customary law and the distribution of estates of deceased persons been affected by the Soap decision?

Customary law has been dramatically affected by the decision in the Soap and others vs. the Magistrate Khayelitsha and another case, which changed the way estates of deceased persons will be distributed. It also changed the way the Department of Justice and Constitutional Development will supervise the administration of deceased estates.

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What happened in the Soap decision?

While he was still alive, the deceased lived with Ms Soap and one of their two daughters in Khayelitsha. There was some doubt whether Ms Soap and the deceased were married or not. Their second daughter lived with the father of the deceased in Berlin in the Eastern Cape. The deceased died without a will, and his estate was to be distributed in terms of customary law. This meant that the father of the deceased would have inherited the estate to the exclusion of Ms Soap and her two daughters. The estate consisted of a shack and the property on which the shack was built. The father wanted to sell the property to pay for his son's funeral. If he proceeded, Ms Soap and her children would have been destitute.

Ms Soap applied to Court to have her two daughters declared the only beneficiaries of her husband's estate. The Constitutional Court held that the customary law of succession was constrained by Section 23 of the Black Administration Act, and was not allowed to develop to meet the changes in the society that it was meant to serve. As a result it stagnated and became out of touch with the realities of urbanisation and changing family relationships. In its current guise it is unconstitutional since it discriminates on the basis of gender and birth.

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How did the Soap decision change the way estates will be distributed?

All deceased estates will be distributed in terms of the Intestate Succession Act. This means that the beneficiaries in order of reference are: the spouse of the deceased; the descendants of the deceased; the parents of the deceased (only if the deceased died without a surviving spouse or descendants); and the siblings of the deceased (only if one or both parents are predeceased). The Intestate Succession Act should be read in such a way that it could accommodate cases where the deceased was a husband in a polygamous customary union. When the deceased leaves only spouses and no descendants, the wives will inherit the estate in equal shares. When the deceased leaves spouses and descendants the spouses and descendants will inherit the estate in equal shares but each wife shall inherit at least R125 000.

When the estate is not large enough to allow each wife to inherit the R125 000, the spouses will inherit the estate in equal shares while the descendants will not receive anything.

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How did the Soap decision change the way the administration of estates will be supervised?

After the Soap decision, deceased estates will all be administered in terms of the Administration of Estates Act (Act 66 of 1965, as amended). This implies that Magistrates will no longer supervise and administer deceased estates; only the Master of the High Court will do so. It also implies that the Master of the High Court does not have the power to administer estates on behalf of beneficiaries. The Master will appoint a suitable person to administer the estate.

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Has the customary law of succession been abolished?

No, when planning his/her estate, a person may still arrange that his/her estate be distributed in terms of customary law. This should be done by making a will. The Master of the High Court has a constitutional obligation to ensure the development of customary law. This should be done by allowing the family of a deceased to agree on the way the estate should be distributed. The Master of the High Court may not, however, allow vulnerable groups like women and children to be exploited as a result of a family agreement.

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How are deceased estates now administered and distributed?

The Soap decision fundamentally changed the way deceased estates will be administered and distributed. All estates will not be administered in terms of the Administration of Estates Act (Act 66 of 1965, as amended) and will be distributed in terms of the intestate Succession Act (Act 81 of 1987, as amended). It is important that all South Africans be made aware of these changes, so that they can plan their estates accordingly. The Chief Master of the High Court has established a helpline where more information can be obtained. The number of this helpline is 012 315 1880.

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What is the comparison between a Company and a Close Corporation?

Close Corporation Company
Juristic person Jusritic person
Enjoys perpetual succession Enjoys perpetual succession
Can have a maximum of 10 members A private company can have up to 50 shareholders
A public company can have an unlimited number of shareholders
Companies cannot hold a member's interest Companies can be shareholders
Comprise of members Comprise of directors and shareholders
Has a founding statement Has a memorandum
Articles of association are not required Registered articles of association
Has member's contributions Has a share capital
Has an accounting officer (CFA) Has an Accountant (CA)
Annual general meeting not required Convenes an annual general meeting
Certificate of incorporation Certificate of incorporation
Members hold member's interest Members hold shares (shareholders)
Can purchase a members interest Can acquire its own shares under certain circumstances
Members are responsible for the day to day management of the CC Directors are responsible for the day to day management of the company
No register of members Register of members
Limited liability Limited liability
Financial statements Audited financial statements
No prohibition on a CC to provide financial assistance for the acquisition of a member's interest Prohibition on a company to provide financial assistance for the acquisition of its own shares

* Since January 2006 an inter vivos trust can be member of a CC

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