What is the liquidation and distribution account?

Heirs spend months hearing nothing and then receive a notice saying an account is lying for inspection. Most do not read it, because it looks like a formality and because it is written in a format nobody encounters anywhere else.

It is not a formality. The liquidation and distribution account is the document that decides what each heir actually receives, and the inspection period is the designed moment to object to it.

What is in it

The account is the executor's formal accounting to the Master of the High Court. In plain terms it sets out:

The liquidation account. Everything the deceased owned at death, item by item, with values. Immovable property, vehicles, bank balances, investments, policies payable to the estate, household contents.

The liabilities. Everything owed: the bond, credit agreements, the funeral account, outstanding municipal charges, income tax, and any claims lodged by creditors.

The administration costs. The executor's remuneration, the Master's fee, advertising, bank charges, conveyancing on any transfer, and any valuations obtained. Our executor fees and estate duty calculator works out what those should come to.

The estate duty addendum, where duty is payable.

The distribution account. What remains after everything above, and how it is allocated between the heirs and legatees, whether under the will or under the Intestate Succession Act.

Read together, it answers the only question heirs actually have: what happened to everything, and what is left.

The 21 days

Once the Master has examined the account, section 35 requires it to lie open for inspection for not less than 21 days.

It lies at the Master's office and, where relevant, at the office of the magistrate for the district in which the deceased was ordinarily resident. The executor must advertise this, giving the period and the places, which is why notices of this kind appear in the Government Gazette and in a local newspaper.

Anyone with an interest in the estate may inspect it. That includes heirs, legatees, creditors, and a surviving spouse.

If no objection is lodged with the Master during the period, the executor proceeds to pay out in accordance with the account. That is the significance of the window. Once distribution has happened, unwinding it is considerably harder than objecting was.

How to object

An objection is lodged with the Master during the inspection period, in writing, setting out the grounds.

Grounds that are properly raised at this stage include:

• an asset has been left out, or valued at something other than its worth
• a liability is included that was not owed, or has been overstated
• the executor's remuneration has been calculated incorrectly, or charged where a will fixed a different fee
• the distribution does not follow the will, or misapplies the Intestate Succession Act. Our intestate succession calculator works out the shares
• a claim was rejected that should have been admitted, or admitted that should have been rejected
• estate duty has been calculated wrongly

What is not an objection is unhappiness with the outcome. An heir who is receiving less than they hoped because the will says so has no ground, and an objection of that kind delays everybody including the objector.

The Master considers the objection, may direct the executor to amend the account, and gives a decision. A person aggrieved by the Master's decision can approach the High Court.

What to actually check

If you are an heir and an account is lying for inspection, go and look at it. The things most often wrong are mundane:

Is everything there? Compare the assets listed against what you know the deceased owned. Missing bank accounts, forgotten policies and a vehicle nobody mentioned are common.

Are the values sensible? A property valued well below market, or household contents at a nominal figure, affect what everybody receives.

Does the executor's fee match the tariff? It is a regulated percentage of the gross value of assets plus a percentage of post-death income, unless the will fixed something different.

Are the debts real? Loans between family members claimed after death deserve scrutiny, and so does anything without documentation.

Does the distribution match the will? Read the will alongside the account rather than trusting the summary.

Are there assets that should not be there? A retirement fund death benefit does not form part of the estate at all, and neither does a life policy paid to a named beneficiary. Our guide on how retirement fund benefits are paid explains why.

Why estates take so long

Families almost always experience the delay as the executor doing nothing, and sometimes that is true. But a substantial part of the timeline is built into the process.

Reporting the estate and obtaining letters of executorship takes time. Then creditors are advertised and given a period to lodge claims. Then assets are realised, which for immovable property means a transfer. Then the account is drawn, submitted to the Master and examined, which is itself a queue. Then it lies open for at least 21 days. Then, if there are no objections, distribution happens.

Our guide on how long it takes to wind up an estate sets out the realistic timeline. Where the estate is small, the section 18(3) process avoids the account entirely, which is why it is so much faster, and our guide on section 18(3) small estates explains when it applies.

Interim distributions

Heirs in financial difficulty often ask whether anything can be paid before the account is finalised, and the answer is sometimes yes.

An executor may make an interim distribution with the Master's approval where the estate is clearly solvent and the amount is comfortably within what the heir will ultimately receive. It is a discretion rather than an entitlement, and an executor who distributes prematurely and then finds a creditor is personally exposed, which is why they are cautious.

Ask, in writing, and set out why. Funeral expenses already paid personally, or a surviving spouse with no income, are the circumstances in which it is most often allowed.

If the executor will not produce it

The commonest complaint in this area is not a wrong account but no account at all: months pass, calls go unreturned, and heirs have no idea what is happening.

The executor is accountable to the Master, and that is the pressure point. Write to the Master's office handling the estate, quoting the estate number, setting out the dates and asking what stage the administration has reached. The Master can call on an executor to account and can set a period within which the account must be lodged.

Where the executor is simply not doing the job, the Master can remove them and appoint somebody else. Our guide on removing an executor sets out the grounds, which include failing to perform the duties of the office satisfactorily.

Be realistic about the timeline before escalating, though. An estate that has been open for eight months with immovable property in it is not necessarily being neglected; an estate that has been open for four years with a single bank account probably is.

Worked example

This example is illustrative. An estate consists of a house valued at R1.4 million, a vehicle at R120 000 and R80 000 in a bank account. The bond is R300 000, the funeral cost R45 000, and there is a credit card balance of R18 000. The will leaves everything equally to three children.

The liquidation account shows R1.6 million in assets. The liabilities show R363 000. Administration costs include the executor's remuneration calculated on the gross value of R1.6 million, the Master's fee, advertising and the conveyancing to transfer the house.

One of the children inspects the account and notices two things. A motorcycle the deceased owned is not listed. And the executor's remuneration has been calculated on R1.72 million rather than R1.6 million, because a life policy paid directly to a named beneficiary has been included in the assets.

Both are proper objections. The motorcycle is an estate asset that has been omitted. The policy is not an estate asset at all, because it paid outside the estate to a nominee, and including it inflates both the gross value and the fee charged on it.

Lodged with the Master inside the 21 days, those objections are dealt with by amending the account. Raised a year later, after distribution, they are a considerably harder conversation.