Home Ownership after Death
When a couple buys a home it can be registered in the name of one or the other or both i.e. joint registration.
Following the death of one of them how the house is re-registered, rented out or sold can happen in one of a few ways. We learnt some of this just recently having assisted a friend after her husband died. Their home was registered in both of their names and we were surprised at some of the information we learnt and how some things can go wrong. As a result of this experience I visited a Conveyancing Attorney and after discussion she prepared the information below. Instead of trying to paraphrase it I present it as she wrote it and left it in her name.
Deceased Estates: Sale of Property
Here are a few scenarios that one may encounter when dealing with property that is owned by a deceased estate, as well as the process that is followed to sell that property:
A. Property owned 100% by single deceased:
1. The deceased estate needs to be reported to the Master of the High Court and Letters of Executorship need to be issued appointing an Executor/Executrix to act on behalf of the estate and attend to the winding up of the estate.
2. Once an Executor/Executrix has been appointed by the Master, the property can be sold out of the estate quite easily. The Executor/Executrix will sign the sale agreement on behalf of the deceased estate as the seller.
3. In the sale agreement, there must be a special condition inserted to the effect that the sale is subject to the approval of the Master of the High Court.
4. The transfer of the property follows the usual transfer process with the following exceptions:
i. All heirs in the estate need to consent to the terms and conditions of the sale of the property;
ii. The Master of the High Court needs to consent to the sale of the property by way of an endorsement on the Power of Attorney to Pass Transfer in terms of Section 42(2) of the Administration of Estates Act 66 of 1965.
5. The above process is the same regardless of whether the deceased dies testate or intestate (left a will or died without a Will). The process of appointing the executor and determining the heirs of the estate is where the difference is.
i. If the deceased left a Will then the Executor/Executrix and the heirs are easily identifiable.
ii.If the deceased did not leave a Will then the heirs are determined by whom survives the deceased (surviving spouse, descendants, etc. as per the Intestate Succession Act 81 of 1987).
iii. An Executor/Executrix will need to be nominated by the intestate heirs.
B. Property owned 50% / 50% by two spouses, one of whom is deceased:
1. It is important to establish the matrimonial property regime that applied to the marriage of the spouses:
i. If the spouses were married out of community of property then each spouse will own their 50% undivided share of the property in their respective estates;
ii. If the spouses were married in community of property then the property will fall into the ‘joint estate’.
2. If the owners were married out of community of property then the process in A. above will be followed for the deceased share of the property. The surviving spouse will also be a party to the sale agreement, sign the sale agreement and sign transfer documents in respect of his/her share of the property.
3. If the owners were married in community of property then the joint estate is administered by the Executor. The property can still be sold out of the joint estate quite easily but the full proceeds of the sale will be paid into the estate late bank account and distributed from there in terms of the Will/Intestate Succession.
C. Property owned by a Trust:
1. If a property is owned by an intervivos trust (a trust that is established during the lifetime of the founder/s) then the property can be sold out of the name of the trust with the consent of all the trustees as long as the Trust Deed provides for this. If the trust deed does not provide for the disposal of assets then the trust deed will need to be amended and lodged with the Master of the High Court.
2. If the property is vested in a mortis causa trust (a trust that is established after the death of the founder in terms of a Will) then the process is different.
i. These mortis causa trusts are usually incorporated into a Will to protect the interests of minors or other dependants that are not able to fully take care of their affairs.
ii. The trust is administered by the trustees in terms of the Will and the trust usually terminates after a predetermined period or at a determined evet, e.g. a minor turning 18 years old.
iii. When the trust terminates, the property should then be transferred to the relevant beneficiary.
Written by
Stephanie Lopes
Araujo Attorneys