It is very important to plan for expenses in winding up ones estate.
In SA the main expense in winding up an estate is the executors fee. The Administration of Estates Act of July 1 1991. Executors Fees are 3.5% + Vat on the value of the Gross Assets in an estate and then 6% on any income accrued and collected from the date of death.
Example:
Property Value: R1 000 000
Shares: R 100 000
Unit Trusts R 50 000
Cash R 100 000
Furniture R 50 000
Vehicle R 50 000
Gross Value: R1 350 000
Executor Fee: R1350 000 x 3.5% = R47 250 + vat = R53 865.00
Note:
6 % of all interest and dividends received from the investments are paid to the executor for as long as it takes to wind up the estate. Hence it is extremely important to make sure that all your affairs are in order so ones estate can be wound up quickly.
