What are the costs when administrating a deceased estate?

When administrating a deceased estate, there are certain costs that have to be incurred in order to finalize the estate. I thought I would break down the costs for you, so you know more or less what to expect. This is generally applicable to estates valued at more than R250 000 and where a Liquidation and Distribution Account is required.

Firstly, there are the advertisement costs. A deceased estate needs to be advertised twice. The first advertisement is a notice to creditors and debtors to inform them that the deceased has passed away, and that they should submit any claims that they may have. The second advertisement is to advertise that the liquidation and distribution account is lying open for inspection. Both these advertisements will need to be done in the Government Gazette and a local newspaper. The local newspaper should be in the area where the deceased resided or in a national newspaper, like Beeld. The costs of an advertisement in the Government Gazette is just under R38 per advertisement. The costs of the advertisement in the local newspaper will depend on which newspaper you make use of. The costs thereof are usually between R300 and R600 per advertisement.

The second cost is the Master's Fee. You have to pay a prescribed fee to the Master's Office for handling the estate. This fee works on a sliding scale and is determined according to the value of the estate. The minimum Master's fee is R600 and the maximum fee is R7 000.

Then there is the Executor's Fee. Whoever is appointed as Executor of the estate is entitled to compensation for the administration of the estate. If the Executor appoints an Attorney to assist with the administration of the estate, the Executor's Fee usually goes to the Attorney. The Executor's Fee is 3.6% of the total assets in the deceased estate. The Executor/Attorney can also agree on a different fee structure, should they so choose. If the Attorney or Executor is registered for VAT, then VAT will also have to be paid on the Executor's Fee.

Lastly, if there was any income received after the date of death, then the Executor/Attorney is entitled to a collection commission on that income. The collection commission is 6% of the total income received. Again, if the Executor/Attorney is registered for VAT, then VAT will have to be paid on the collection commission.

And there you have it, a breakdown of the costs involved when administrating a deceased estate. I'd love to know if you found this helpful. You can leave me a comment below. Also let me know what others topics you would like me to write about in future.