In this blog, we will explore the relevant sections of the Estates Act that provide guidance on managing claims against an estate. By understanding these provisions, executors can fulfill their responsibilities effectively and ensure a fair and equitable distribution of the estate's assets.

Introduction

The executor of an estate is entrusted with numerous responsibilities, including the management of claims submitted against the estate. In this blog, we will provide an overview of the relevant sections in the Administration of Estates Act 66 of 1965 (Estates Act) that govern the process of handling these claims.

It is essential to emphasise the executor's duty in assessing claims, as exemplified in the case of Van Niekerk v Van Niekerk [2011] 2 All SA 635 (KZP). The court emphasised the importance of fair and reasonable consideration of all claims. 

The executor is expected to minimise unnecessary legal costs and prevent delays. Making sound decisions in accordance with the law is crucial to protect the executor from personal liability in cases where their decisions are perceived as unreasonable or unfair.

Submission of a claim within the timeframe of section 29 notice

In accordance with section 29(1) once the executor has been authorised to act, it is their responsibility to ensure that the section 29(1) notice is published in the Government Gazette and in one or more newspapers circulating in the district where the deceased resided at the time of their passing. 

The purpose of this notice is to inform individuals with claims against the estate to submit their claims to the executor within the specified period mentioned in the notice. This period must be at least 30 days but not exceed three months from the date of the last publication of the notice.

Although section 29 primarily refers to claims against the estate, it is common for the executor to also include a call for debtors of the estate to make payment for amounts owed to the estate in the notice. By including debtors in the notice, the executor can determine the debts for which the estate may be liable and assess the solvency of the estate, as required by section 34(1) of the Estates Act.

Nature of the claim: sections 29(2) and 34(1)

According to the wording of section 29(2) of the Estates Act, all claims that would be provable in the case of insolvency are eligible to be lodged against the estate. To determine the solvency of an estate, the executor typically examines the deceased's documents and consults with family members to identify any known outstanding creditor claims. In the event of insolvency, the executor must notify the creditors through notices as prescribed in section 34 of the Estates Act. This means that any claim with a specific monetary value, known as a liquidated claim, can be lodged against the estate.

Claims against a deceased estate can encompass various obligations, such as amounts owed for loans, services rendered, or goods sold to the deceased. For instance, a claim may take the form of a medical bill, an outstanding balance on a mortgage bond or installment sale agreement, a claim based on a divorce order by a former spouse, or unpaid income tax. These claims typically arise from agreements in which the deceased was involved and involve fixed amounts. However, it is also possible to lodge a claim for damages against an estate if the amount has been determined by a court order or agreed upon in a settlement between the executor and the claimant. Additionally, the executor may encounter claims for maintenance on behalf of minor children and/or the spouse of the deceased, which require a settlement to be reached between the executor and the claimant.

Submission of a delayed (late) claim under section 31

Section 31 of the Estates Act sets forth two conditions that must be met when submitting a delayed claim. 

Firstly, the claimant must provide a valid and reasonable excuse for the delay; otherwise, the Master may hold them accountable for any costs associated with the delay. 

Secondly, it's important to note that the claimant cannot request reimbursement for amounts already paid based on a valid claim.

When a claim is disputed under section 32

According to section 32(1) of the Estates Act, if the executor disputes a claim, they have the authority to request the claimant to provide an affidavit supporting their claim. Section 32(1) further states that, with the consent of the Master, the executor may require the claimant or any other person who the Master believes may possess significant information about the claim to appear before the Master or a designated magistrate or other appointed Master. They will be examined under oath in relation to the claim. This is simpler and less formal process than resorting to full-fledged litigation. However, it is important to note that this examination can only be conducted with the consent of the Master.

Procedure to follow when rejecting a claim under section 33

Section 33(1) requires the executor to promptly notify the claimant in writing through registered post when rejecting a claim against the estate. The rejection notice should provide the reasons for dismissing the claim.

If a claim is rejected, the claimant has two options. They can either establish their claim through legal action or object to the liquidation and distribution account when it is submitted to the Master. However, the Master is unlikely to uphold the objection unless it is evident that the claim cannot be disputed.

It is advisable to first exhaust the available remedies under the Estates Act by submitting a timely objection to the Master, as outlined in Section 35.

Additionally, Section 33(2) states that if a court rules in favor of a claimant regarding a claim against a deceased estate, the court may deny the claimant their costs from the estate if the information provided to the executor was insufficient or if the executor had valid grounds for rejecting the claim under subsection (3) of Section 32.

Conclusion

In conclusion, managing claims against an estate involves careful assessment and consideration of various financial obligations owed to creditors. Executors must fulfill their duties diligently and ensure a fair and equitable distribution of the estate's assets while following the provisions outlined in the Estates Act.