8 September 2011 by

Administration of Estates of Non-Residents with South African Property

It may so happen that, as a result of your visit to South Africa, you have acquired property here.

That property can be in the form of what is known as movable property, such as furniture, a vehicle or even a bank account. Alternatively, it could be a larger purchase, such as an apartment or house in South Africa, which is known as immovable property.

Whether movable or immovable, or both, it would be important for you to consider what will happen to this property if you should still possess it at the time of your death.

In terms of the relevant legislation that governs estate administration in South Africa (the Administration of Estates Act, No. 66 of 1965), no person may deal with any assets in the Republic of South Africa belonging to a deceased whether or not the latter died ordinarily resident in the Republic, except under the supervision and authority of a Master of the High Court of South Africa.

Consequently, any foreign executor will only be able to deal with assets situated within the Republic of South Africa once he/she is authorized by the Master of the High Court of South Africa.

This required authority can be given by issuing South African Letters of Executorship ,by "resealing a foreign Grant of Probate" or thirdly ,a less formal, procedure which is applicable where the deceased was a resident in a proclaimed state, and owned only movable property.

It is important to realize that the administration process for estates in South Africa is more complex and time-consuming than the dispensation of the European Grant of Probate, and it involves much more than just the claiming of the assets by the beneficiaries or automatic vesting.

Over and above the administration process, it is also importune to consider who will in fact inherit a non-resident's South African estate.

Our law recognises two possibilities.

  1. The first is where an individual dies with a valid Last Will and Testament, in which he stipulates who his beneficiaries are. Our law recognizes that a testator has testamentary freedom of testation and thus a testator can, from a South African perspective, leave his assets to whom he wishes.
  2. The second system recognized by our law is that, if you die without a valid Will, the law of intestate succession, viz. the Intestate Succession Act, Act 81 of 1987, will determine who your beneficiaries are and what proportion they will inherit. This dispensation is linked to your nearest blood family, including your spouse.

However, in both the case of the law of testacy and the law of intestacy, there may be conflicts between the law in South Africa and the law governing your estate in your country of residence. An interesting but complex area of law known as the Private International Law or Conflict of Law will determine which legal dispensation is relevant in what situation. As a general rule, in case of intestacy, assets that are known as immovable property are governed by the laws where the property is found, and movables are governed by the law of the domicile of the testator.

All your assets in South Africa will be subject to estate duty (death duties). Whether there are specific treaties in place between your home state and South Africa, the general principle is that an estate is not subject to double taxation.

It is thus apparent that you cannot just ignore your assets in a foreign jurisdiction and, in fact, their administration may generally be more complicated than that relating to assets in your own country of residence.

We thus recommend that, if you should acquire assets in South Africa, especially if they are assets of substantial value or immovable property, you consult with a South African professional. Generally, our advice would be to prepare a specific Will dealing with your South African assets, executed according to the laws of South Africa, and appointing a local executor. Needless to say, this South African Will must not inadvertently revoke any foreign Wills, and therefore you should advise your South African drafter that you have a foreign Will or assets in your country of residence.

Furthermore, you should bring all your worldwide assets into account in your worldwide scheme governing the devolution of your assets, by ensuring that the various documents dovetail with each other, and accordingly inform your legal advisor in your home country.

Johann Jacobs, Director, Trusts and Estates

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