When a loved one dies, the remaining family members have more than enough stress to deal with without being burdened with problems relating to the inheritance of fixed property.
Saving your heirs unnecessary heartache requires forethought and planning, as well as an up-to-date and incontestable will. In addition, you need to nominate a competent person as the executor to deal with the complexities involved in winding up even the least complicated estate.
When planning your estate, there are several options for passing on fixed property to your heirs.
If you intend to have your property inherited by an individual - your spouse or sibling, for instance – you can specify in your will that the title deed must be transferred directly into their name when you die.
You can also specify direct transfer to more than one beneficiary, but this often causes complications. All the nominated beneficiaries would be co-owners of the property and may not agree on how they will use the property or whether to sell it.
Transferring property into a beneficiary’s name can take a long time. The transfer can only be completed once certain estate formalities have been concluded, which can take several months – or even years in some instances.
During this time, municipal rates and taxes will still be payable on the property. Also, although no transfer duty will be payable, the estate will still need to cover conveyancing costs, deeds office fees and various other costs. Therefore, to ensure your beneficiaries are not left out of pocket, it is wise to leave enough funds in the estate to cover all these costs until the estate is finalised.
Another alternative is to instruct the executor to sell your fixed property after your death and include the proceeds in your estate. This method will make it easier to share your assets equally if you have several heirs.
The sale of fixed property in a deceased estate can take place as soon as the Master of the High Court has approved the appointment of the executor. However, the proceeds of the sale will remain in the estate until all the formalities have been completed.
As with the direct transfer method, you should also plan to have cash available in your estate to cover costs such as clearance certificates, rates and taxes and bond cancellation fees until the date of transfer. The buyer will be liable for the conveyancing costs, so these will not be for the estate’s account.