Property Transfer After Death: Estate Guide South Africa

Transferring property from a deceased estate involves specific legal processes. This guide explains everything executors, heirs, and beneficiaries need to know.

How Estate Property Transfer Differs

Normal Transfer vs Estate Transfer

Normal Transfer:

• Between living parties
• 8-12 week timeline
• Seller signs documents
• Straightforward

Estate Transfer:

• From estate to heir/beneficiary
• 6-18 month timeline
• Executor signs (not deceased or heirs)
• Master of High Court involved
• More complex documentation
• Possible estate duty

Who Can Transfer

Only the Executor with:

• Letters of Executorship from Master of High Court
• Legal authority to act for estate
• Duty to protect heirs' interests

Not Permitted:

• Heirs cannot transfer
• Family members cannot sign
• Spouses cannot transfer (unless also executor)

Property Scenarios

1. Property in Deceased's Name Only

Most Common:

• Property solely in deceased's name
• Forms part of estate
• Goes through full estate administration
• Transferred by executor to heir

2. Property in Joint Names

Tenants in Common (Most Common in SA):

• Each owns specific share (usually 50/50)
• Deceased's share goes through estate
• Surviving owner keeps their share

Example:
Husband and wife own 50/50. Husband dies. His 50% goes through estate to beneficiaries. Wife keeps her 50%.

3. Property with Bond

Complications:

• Outstanding bond must be settled or assumed
• Bank must consent
• Options:
  1. Pay off from estate
  2. Heir takes over (credit approval needed)
  3. Sell property to settle

4. Will vs Intestate

With Valid Will:

• Property to specified beneficiary
• Executor follows will
• Clear, straightforward
• Faster

Died Intestate (No Will):

• Intestate Succession Act applies
• Legal formula for distribution
• Typically to spouse and children
• More complex, takes longer

Estate Administration Process

Phase 1: Death and Initial Steps (Weeks 1-4)

Immediate Actions:

• Register death, obtain certificate
• Secure property (change locks, notify insurance)
• Continue bond payments
• Notify banks, bond holder, municipality
• Locate title deeds and will
• Identify all estate assets

Phase 2: Executor Appointment (Weeks 2-8)

With Will:

• Named executor applies to Master
• Submit will, death certificate, inventory
• Letters of Executorship issued (4-8 weeks)

Without Will:

• Interested party applies
• Master appoints suitable person
• Letters issued (6-10 weeks)

Executor Duties Begin:

• Control estate assets
• Prepare inventory
• Advertise for creditors
• Pay estate debts
• Prepare liquidation account

Phase 3: Estate Administration (Months 2-12)

Asset Management:

• Value all assets including property
• Obtain professional valuations
• Maintain property
• Pay rates, taxes, bond
• Keep property insured

Creditor Process:

• Advertise for creditors (legal requirement)
• Wait 30+ days for claims
• Verify and settle valid claims
• Dispute invalid claims

Account Preparation:

• Prepare liquidation and distribution account
• Detail all assets and liabilities
• Show proposed distribution
• Calculate estate duty (if applicable)

Master Approval:

• Submit account to Master
• Address queries
• Obtain approval
• Advertise account (14-21 days)

Phase 4: Property Transfer (Months 6-18)

Once Master Approves:

• Executor instructs conveyancing attorney
• Property transferred to beneficiary
• Executor signs (not deceased or heir)
• New title deed issued

Required Documents:

• Letters of Executorship
• Death certificate
• Master's approval of account
• Will (if applicable)
• Beneficiary ID documents
• Tax clearance

Timeline

Simple Estate (Will, No Disputes)

• Months 1-2: Death registration, executor appointment
• Months 2-6: Estate administration, creditors
• Months 6-9: Account preparation, Master approval
• Months 9-12: Property transfer registration

Total: 12-15 months

Complex Estate (No Will, Disputes)

• Months 1-3: Death registration, executor appointment
• Months 3-9: Administration, dispute resolution
• Months 9-15: Account, Master approval
• Months 15-18: Transfer registration

Total: 18-24 months

Delay Factors:

• No will
• Heir disputes
• Creditor claims
• Estate duty calculations
• Master's office backlogs
• Outstanding bonds
• Missing heirs

Costs

Executor Fees

Regulated Rates:

• 3.5% + VAT on first R250,000
• 6% + VAT on balance
• Based on total estate value

Example - R2,000,000 Estate:
First R250,000 at 3.5%: R8,750
Balance R1,750,000 at 6%: R105,000
Subtotal: R113,750
VAT (15%): R17,063
Total: R130,813

Note: Sole heir executors may waive fees.

Property Transfer Costs

Transfer Duty: Same rates as normal transfers

Attorney Fees: 20-30% higher than normal due to complexity

Example - R1,500,000 Property:
Normal: R21,000
Estate: R27,000 - R30,000
Plus VAT

Additional:

• Rates clearance: R1,500 - R2,500
• Certificates: R3,000 - R6,000
• Deeds Office: R600 - R1,000
• Master's fees: R600

Estate Duty

2025 Rates:

• First R3,500,000: Exempt
• Balance: 20%
• Above R30,000,000: Additional 5% (25% total)

Example - R5,000,000 Estate:
Exempt: R3,500,000
Taxable: R1,500,000
Duty at 20%: R300,000

Surviving Spouse:

• Unlimited spousal deduction
• No estate duty on assets to spouse
• Rolls to spouse's estate

Total Cost Example

R2,000,000 Estate Property:

• Executor fees: R130,813
• Estate duty: R100,000 (if applicable)
• Transfer duty: R41,625
• Attorney: R34,500
• Certificates: R5,000
• Additional: R3,000

TOTAL: R314,938

Costs paid from estate before distribution.

Special Scenarios

Surviving Spouse Inherits

Advantages:

• No estate duty (spousal exemption)
• Reduced/no transfer duty
• Simplified process
• Faster timeline

Minor Children Inherit

Complications:

• Minors can't own property directly
• Guardian appointed
• Trust or guardian holds property
• Transfer when child turns 18, or
• Property sold, proceeds held in trust

Multiple Heirs

Options:

1. Transfer to All: Property registered in all names (e.g., 3 children = 33.33% each). All must agree on decisions.

2. One Buys Out Others: Property to one heir, they pay others their share. Valuation required.

3. Sell Property: Executor sells, proceeds distributed. Often preferred.

Property with Tenants

Considerations:

• Rental income to estate
• Tenants' rights continue
• Leases remain valid
• New owner assumes landlord duties

How Heirs Can Help

Speed Up Process

Provide Quickly:

• ID documents
• Marriage certificates
• Proof of residence
• Banking details

Cooperate:

• Respond to communications promptly
• Attend meetings
• Sign documents without delay
• Don't create disputes

Pay Costs (If Needed):

• If costs exceed estate funds
• Particularly bond payments
• Or transfer costs

Maintain Property:
If living in estate property:

• Pay utilities
• Maintain insurance
• Don't make major changes
• Respect other heirs

Protect Your Rights

Understand Entitlement:

• Read will carefully
• Know intestate succession rules
• Understand your share

Monitor Executor:

• Request estate information
• See liquidation account
• Query transactions
• Complain to Master if misconduct

Object If Necessary:

• Object to incorrect account
• Dispute unfair distribution
• Report misconduct
• Seek legal advice

Common Problems

Problem 1: Executor Delays

Signs: Months passing, no progress, unreturned calls

Solutions:

• Formal letter requesting timeline
• Request status report
• Complain to Master
• Apply to remove executor (extreme)

Problem 2: Property Deterioration

Risk: Empty property falling into disrepair

Solutions:

• Heirs maintain temporarily
• Executor arranges maintenance from estate
• Rent property temporarily
• Ensure adequate insurance

Problem 3: Heir Disputes

Issues: Who gets property, valuation disagreements, cost sharing

Solutions:

• Mediation
• Independent valuation
• Legal advice
• Master's intervention

Problem 4: Outstanding Bond

Challenge: Property worth less than bond

Solutions:

• Negotiate with bank
• Sell property (even at loss)
• Heirs top up shortfall
• Bank may write off (rare)

Tax Considerations

Income Tax

• Executor files deceased's final return
• Rental income taxable to estate until transfer

Capital Gains Tax

On Estate Property:

• Primary residence: Usually no CGT
• Investment property: CGT may apply
• Calculated from acquisition to death
• Payable from estate

On Heir Receiving:

• No CGT when inheriting
• New base cost = market value at death
• CGT only when heir eventually sells

Estate Duty

• 20% on estates over R3.5m
• Spousal exemption available
• Payable before transfer

Frequently Asked Questions

Q: Can we sell before transfer complete?
A: Yes, executor can sell estate property. Proceeds distributed per will/law.

Q: What if heirs can't afford costs?
A: Pay from estate, heirs contribute proportionally, sell property, or bank may finance.

Q: How long do we have?
A: No specific deadline, but aim for 12-18 months. Delays cause complications.

Q: Can we rent it out?
A: Yes, executor can rent estate property. Income forms part of estate.

Q: What if will is disputed?
A: Estate pauses until resolved. Can take months to years. Transfer delayed.

Q: Do we need attorney?
A: Yes, attorney must handle property transfer from estate. Executor cannot do this themselves.

Conclusion

Estate property transfer is complex but follows clear legal process. Understanding steps, timelines, and costs helps everyone navigate smoothly.

Key Takeaways:

• Only appointed executor can transfer
• Process takes 12-18 months average
• Costs include executor fees, estate duty, transfer costs
• Master of High Court oversees
• Heirs help by cooperating and providing documents

Executor Action Steps:

1. Register death, obtain certificate
2. Secure property
3. Locate will and title deeds
4. Apply for Letters of Executorship
5. Appoint conveyancing attorney early

Heir Action Steps:

1. Cooperate fully
2. Provide all documents
3. Understand your entitlement
4. Be patient - takes time
5. Seek legal advice if needed

For related guides, see Property Transfer Costs and Estate Planning Guide.