adminSlyvia Chirawu —
Although there is a saying that death is final, this is not so when it comes to costs associated with the winding up process. This is the process which begins with the registration of an estate up to the transfer of assets left by a deceased person.
These costs are distinct from the usual funeral expenses. An estate consists of assets and liabilities. The law requires that the estate of every deceased person be registered within 14 days from the date of death.
The registration is done by way of completion of a death notice and filing it with the Master of the High Court for a person who was married under the Marriage Act (Chapter 5:11), or who left a will; and with the Magistrates’ Courts for a person who was married under the Customary Marriages Act (Chapter 5:07) or was in an unregistered customary law union.
The person expected to complete and file the death notice is the next of kin or connection who stays near or at the place that the deceased passed away.
If these are not available to register the estate, the person who at or immediately after death has chief charge of the house or the place at which the death occurred is expected to complete the death notice.
A death certificate is not a requirement to register an estate unless the master calls upon the person registering to produce it. The certificate can actually be produced later, along with other documents such as marriage and birth certificates.
It is a criminal offence to fail to register the estate of a deceased person. The process of winding up an estate is supposed to take six months to protect the interests of beneficiaries and creditors alike.
Many beneficiaries often express concern over the costs associated with winding up an estate. To begin with, the estate is not responsible for costs such as rent, rates, electricity and the like that accrue after death. These costs are payable by the persons now residing at the property left by the deceased.
The law recognises that the surviving spouse and children of the deceased should continue occupying the house that the deceased had a right to occupy and in which they were ordinarily residing.
However, these rights come with responsibilities and the law is very clear on this. The deceased’s liability insofar as these costs are concerned ends with her/his death. Often beneficiaries ignore these costs hoping that the estate will end up paying.
Local authorities owed money may end up being prejudiced because legally, the money should not come from the estate unless the debt it accrued before death.
That is why it is important to complete the process within the stipulated six months. If the deceased had no will, or had a will but did not name an executor, the sum of US$30 currently is paid through the master’s office for the purposes of convening an edict meeting to appoint an executor.
These costs should normally come from the estate but usually relatives pay and they can recover them from the estate later. Estates registered at the Magistrates’ Courts, however, do not pay fees for the edict meeting.
The law also requires that the registered estate be advertised once in the Government Gazette and once in a newspaper published or circulating within the district in which the deceased ordinarily resided. This applies even if the deceased left a will.
The purpose of these adverts is to call upon persons or entities that owe the deceased or who are owed to come forward and lodge their claims or identify themselves and how much money is in question.
Banks and some companies that are into the retail business have persons who look up deceased estates advertisements every Friday so that they can lodge claims where appropriate. Telephone companies and hospitals have also been known to lodge claims with executors.
This means that a debt does not expire at death. Claims, however, must be backed by solid proof to avoid abuse. The executor scrutinises all claims and may request a creditor to substantiate their claim through an affidavit sworn to and signed before a commissioner of oaths.
A second set of adverts at the same cost in the Government Gazette and The Herald currently is required. This is an advert stating that the first and final liquidation and distribution account will lie for inspection by interested parties at a named place, for example at the master’s offices in Harare.
The purpose of such is to enable persons who may have an interest to inspect the proposed distribution account and lodge their objections, if any, with the master of the High Court or the magistrate.
Again, even if the deceased had a will, the estate account has to be advertised. The major costs of winding up of an estate relate to the payment of the master’s fees currently pegged at four percent of the value of the estate.
The other costs are 4,3 percent for professional executors, or neutral executors. If the executor is a surviving spouse or next of kin, they are not entitled to fees. A professional executor is also allowed to charge modest sundry expenses and this has to be approved by the master.
Estate duty depends on the value of the estate. Currently, the principal residence and one vehicle are exempt from estate duty. The master and professional executors are able to provide guidance on estate duty calculation.
These costs can be quite substantial, which may mean that the executor may end up having to sell some of the assets to meet these costs. The law, however, allows beneficiaries to contribute cash to the estate to avoid selling of the assets.
If rentals are collected from a deceased’s property, the master requires that an income and expenditure account be done. From the amount realised, the master is entitled to four percent and if there is a professional executor, she/he is entitled to 18 percent of the income.
Again the next of kin or surviving spouse who is an executor is not entitled to the 18 percent. Rentals, though, also assist in the payment of estate-related costs.
If there is litigation involving the estate, the costs will depend on the court ruling. The court may state that the costs be borne by the estate or by the individuals involved in the case.
Other costs come at the time of cession for immovable properties that have no title deeds, where local authorities charge a modest fee. For those that have title deeds and are to be transferred to beneficiaries, there are also conveyancing costs to be paid and guidance can be sought from lawyers.
These costs should come from the estate but beneficiaries can also contribute to avoid sale of assets. The costs related to estate administration can be a burden and it is encouraged that persons prepare by getting insurance policies that cover such costs in the event of death.
Slyvia Chirawu is a lawyer and also teaches Family Law and the Law of Succession at the University of Zimbabwe
Online Reporter
Tinaye Agere