But the consequence of not preparing for this inevitable part of life can be devastating for those left behind when a family member passes away.
“Very few people have their estate planning in order or the right executor appointed. When they pass away, the people they leave behind are faced with the dual challenge of coping with bereavement while trying to make sense of a very complex estate administration process for which they are entirely unprepared,” says Johan Strydom, FNB Fiduciary Specialist.
He adds, “Having a cursory understanding of the process that needs to be followed after someone dies is not only a good way of smoothing over the challenges that loved ones will face, but is a good incentive to get our estate affairs in order before it’s too late.”
Strydom outlines a few high-level steps that need to be followed when somebody dies:
Step 1: Dealing with the funeral and associated costs
The most pressing and immediate cost that you will face will be the funeral and associated costs. Most funeral homes will not be prepared to wait for payment and will require a substantial deposit before proceeding with arrangements. In order to settle these costs, first determine whether or not the deceased held a funeral policy to help settle costs in full or in part. This will go some way to offsetting the immediate costs. In instances where no funeral cover is in place, then the estate is liable for the reasonable cost of the funeral. It is important to keep all the receipts arising from the funeral and submit a claim to be reimbursed from the estate once an executor has been appointed.
Step 2: Obtain the Will (or copy of the Will)
Obtaining a copy of the Will is the most essential document needed to determine the distribution of assets, the naming of beneficiaries and the devolution of the estate. It should also name the executor or executrix of the Will and will act as a guide for executing the deceased’s wishes. A Will is usually stored in a secure place at home or held in safe custody with the bank. If your loved one died without a Will, then the family/ intestate heirs nominate an executor from amongst themselves and the estate will be administered under intestate succession rules.
Step 3: Contact your financial institution to assist with immediate notifications
Most banks don’t automatically freeze a deceased person’s bank account; in fact, they require a certified copy of the death certificate in order to place a freeze on the accounts. Until then, accounts will continue to operate as normal. When an executor is appointed, he or she will instruct the bank to place a hold on the account and close it. FNB Fiduciary can assist by making important notifications during the estate administration process.
Step 4: Notify the nominated executor
The responsibility of notifying the nominated executor of their role falls to the family of the deceased. They should provide the executor with the information and documents needed to administer the estate, including details of all the assets and liabilities in the estate. The executor will require all this information in order to give effect to the provisions of the deceased’s Will or the Intestate Succession Act.
Step 5: Secure your day-to-day living expenses
Many spouses, partners and children may find themselves in a position where they still require access funds from the estate in order to meet their day-to-day living expenses. Once the bank account is frozen, debit orders are not processed further. Executors are not able to pay creditors for several months after death and it is recommended that heirs make arrangements to maintain the payments to avoid potential adverse interest charges and possible legal collection charges. FNB Fiduciary can help you identify monthly debit orders, as it is best to meet these obligations to protect the assets from being repossessed.
Step 6: Obtain all required documentation
As a beneficiary, you must assemble important documentation and attend to matters personally that will enable the executor to deal with the estate and to transfer any assets to you. This includes providing your FICA details, opening a utilities account in your name at the municipality, or visiting the traffic licensing department to transfer any vehicles into your name.
“The process of dealing with a deceased estate can be very complicated, so the best approach you can take if you’re faced with this difficult situation is to partner with a knowledgeable, experienced and reputable Estate Executor to help you wind up the estate,” concludes Strydom.
