Based on the outcome of the most recent court case in the Supreme Court of Appeal, Jones v Pretorius, a strong word of warning was issued by the Court to those appointed as executors and their agents.
The Administration of Estates Act (Act) makes it very clear when you are entitled to your well-earned fee. The executor is only entitled to payment of his remuneration after all debts have been paid and the other estate assets have been distributed among the beneficiaries in accordance with the approved Liquidation and Distribution Account.
Contrary to popular belief, the Executor is not exempt from the rights and obligations of being appointed as such by the Master of the High Court when appointing an agent to act on his behalf. When issuing a Letter of Executorship for an estate larger than R250 000, the Master requests the nominated Executor as a private person to approach an attorney or an auditor. This is mainly because these professionals are members of governing bodies such as the Legal Practice Council (LPC) or the Independent Regulatory Board for Auditors (IRBA). These professionals must adhere to a structure of rules and regulations which allows the Master to trust the Executor and his/her agent to attend to the administration of the estate as per the Act.
Even though, and as in the matter of Jones v Pretorius, the agent is appointed by the Executor to deal with the administration of the estate according to the Act, the Will. In the best interests of the heirs as well as for the appointed Executor, the Executor is the one who will be a party to legal action for or against the estate.
So, when do you stop being an Executor? The duties and responsibilities of an Executor are terminated automatically when he dies, or when the Master (or the High Court), relieves him of his duties. Therefore, if you are appointed as an agent to act on behalf of the Executor and he passes away, your instruction also ends. A new Executor must first be appointed, and a new formal Estate Power of Attorney must be signed by the new Executor for you to proceed with your administration. You, as the appointed agent, will not be entitled to deal with the administration or be entitled to the executor's remuneration until such time as you have been appointed by the new executor.
The Executor only hangs up his hat when the estate has been finalised and the Master has issued a filing note. It is important to remember that for the Executor to be discharged (meaning to no longer be responsible for the estate), he must apply in writing to the Master. Only after he has received his discharge letter from the Master, can he breathe again!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
