Don’t expect your inheritance immediately if you are named an heir

BEING named in someone’s will or knowing that you will be inheriting an asset can lead to excitement and anticipation, especially if you don’t know what you are inheriting.

While many people will be expecting to receive their inheritance immediately, in reality, it could take some before you get what you are due to inherit.

Hilary Dudley, the managing director of Citadel Fiduciary, and Willie Fourie, the head of fiduciary services at PSG Wealth, explain wealth inheritance and how you can take care of the assets you have received.

Receiving an inheritance or being named an heir means that someone, not necessarily a family member, thought of you while drawing up their last will and testament.

“This person decided to bequeath an asset to you and once the estate is finalised, this asset is then transferred to you,” Fourie said.

Dudley said nothing specific happened after a will had been drawn up and named you an heir, unless the person whose name the will was drafted in wanted to inform the people that they had been nominated.

Fourie said the mere nomination as an heir in a will did not mean that the named heir became entitled to the asset at that point.

“The will and bequest comes into operation only after the death of the testator and only once the will has been accepted by the Master of the High Court as the will of the deceased,” Fourie said.

After the death of a person, informing heirs of their inheritance is not as dramatic as the formal reading of the will that is seen in movies.

“The executor nominated in the will normally informs the heirs that they are named in the deceased’s will and might share with them a copy of the will by email,” said Dudley.

Fourie said that once an heir had been informed of their inheritance, the executor may distribute the assets in the deceased estate only after the liquidation and distribution account has been:

– Approved by the Master of the High Court.

– Published in the Government Gazette and a newspaper in the area where the deceased was resident prior to death.

– No objections to the account had been lodged with the Master of the High Court.

Once all those things had taken place, the executor of the will could transfer the assets to the heir.

Dudley said it was important to note that there were laws and regulations in South Africa regarding inheritance, among them:

– The Wills Act which governed the formalities around the drafting and execution of wills.

– The Intestate Succession Act which dictated which family members would receive an inheritance in cases where the deceased did not leave a will.

– The Administration of Estates Act which set out how the deceased estate was administered. That includes the operation of the office of the Master of the High Court, the appointment of the executor and the executor’s duties.

– The Estate Duty Act which set out under what circumstances and how estate duty would be levied on a deceased estate.

“There are various other laws, such as the Income Tax Act, that will also be applicable to the administration of a deceased estate,” Dudley said.

There are differences between a child and an adult being named an heir.

If a child is named in a deceased’s will and the will does not have provision for a trust, or if the deceased died without a will, the minor’s inheritance must be paid to the Guardian’s Fund which is administered by the Master of the High Court, a division of the Department of Justice.

“The child’s money in the Guardian's Fund is invested with the Public Investment Commission. The child’s guardian can claim maintenance for the child whose money is held in the fund,” Dudley said.

Fourie said: “Normally a properly drafted will makes provision for a testamentary trust to be created for the benefit of the minor. This testamentary trust is then managed by the nominated trustees until the beneficiary of the estate reaches majority age, that is 18 years old.”

With regard to adults, the inheritance can be transferred to them if the will contains certain restrictions on the transfer or provides for the management thereof in a trust.

As a final piece of advice, Dudley said: “In my experience, it is best to discuss these issues with your family as part of your estate planning process.

“Having an idea of what will happen after your death and your estate planning process will give your family certainty and peace of mind at a time when they are saddened and distressed.”

Fourie said an inheritance could make a real difference in the life of an heir by allowing them to pay their debts, supplement their retirement income or pay for a child’s education, so they need to get advice from a qualified investment adviser.

"If there is something left of this inheritance at the end of your life, pay it forward. There are a number of charitable institutions that are in dire need of funding,“ Fourie said.

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