The short answer
The executor, who is usually named in the will, is responsible for winding up the estate. Here are the costs involved in doing that.
The whole question
I am inheriting my father's house, as stated in his Last Will and Testament. What are all the costs that will be involved in this process?
The long answer
There are a lot of costs and administrative duties involved in winding up an estate, and the executor, who is usually named in the will, is responsible for handling these. Anyone can be an executor but the Master of the High Court will only appoint an executor who is able to carry out all the requirements. It is a position that carries a lot of responsibility.
The costs of winding up an estate are:
Advertising costs: Adverts need to be placed in two newspapers – a local one and the Government Gazette. This could cost up to R1500.
Conveyancing fees: (transferring the title deed of the house into your name.) This is done by lawyers called conveyancers and their fee depends on the value of the property on a sliding scale. For example, for an RDP house the fee could be around R7 000 – R8 000. For a property worth R1 000 000, the fee could be about R16 000. No transfer duty (tax) is paid on transferring a property to a beneficiary but the conveyancers must be paid for transferring or endorsing the title deeds into your name.
Rates and taxes: The municipality needs to issue a clearance certificate for rates and taxes which must be paid six months in advance.
Master’s fees: this is the fee paid to the Master’s Office of the High Court, which handles all deceased estates. There is a formula to calculate this but it should not be more than R600.
Executor’s fees: these are usually 3.5% of the gross value of the estate (3.99% if they include VAT). This gross value includes all assets, fixed and otherwise, that the executor is required to deal with, or that fall into the estate.
Taxes: All outstanding taxes must be paid.
Other debts: bond payments, credit cards, etc.
Answered on Oct. 21, 2020, 11 a.m.
Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.