Answer to a question from a reader

Why is my aunt liable for her late husband's debts if they were married out of community of property?

The short answer

As the representative with the letter of authority, she is required to pay all his debts.

The whole question

Dear Athalie

My aunt and her late husband were married out of community of property but his will states that she inherits everything. When she learned that the estate was worth less than R250,000, my aunt investigated and found an outstanding balance on her late husband's credit card account. The bank informed her that even though he is now deceased, she is liable for payment of his debt and that they will even go so far as taking her vehicle to settle the account. Is this allowed? 

The long answer

All assets, income and debts of the deceased person are referred to as a deceased estate.

When a deceased estate is valued at less than R250,000, the Master of the High Court will give someone (usually a nominated family member) a Letter of Authority to wind up the estate, rather than appoint an Executor, which is done when the deceased estate is worth more than R250,000. The person who is nominated to be the representative receives the letter of authority in terms of Section 18(3) of the Administration of Estates Act. 

The letter of authority gives the nominated representative the right and duty to administer the deceased estate. That means paying all the debts and seeing that the rightful heirs are identified to distribute the assets fairly and correctly. 

The letter of authority (J170) must be obtained from the Office of the Master of the High Court or a Magistrates Court and can take up to 120 days to be issued. It is usually valid for up to 12 months. 

When a person dies, their bank accounts are frozen to prevent theft and fraud. The representative must open a new bank account in the name of “Estate of Late Mr X” and the bank must transfer the money to that new bank account. The representative will need to provide the bank with the following documents:

  • Death Certificate;

  • Deceased’s ID;

  • Letter of authority; 

  • Appointed representative’s ID.

The person who is winding up the estate has to pay all the debts of the estate before any beneficiary can inherit. If the person with the letter of authority in this case is your aunt, she has to pay all the debts of his estate before she can inherit through her late husband’s will. However, if her late husband had a life policy to which he nominated her to be the beneficiary, the policy would be paid out directly to her and not to the deceased estate.

Credit card debt is called “unsecured debt” as it is not protected by an asset like a house that the bank can repossess if the owner stops paying the bond. Unsecured debt means there is no specific asset that can be confiscated and has to be collected by the bank through the normal debt collection procedures.

A common problem that many representatives face is illiquidity, which is where there isn’t enough cash to settle debts. In that case, the representative would have to see which assets could be sold to pay the debts. This is why a car might have to be sold to pay debts.

To summarise: As your aunt was married out of community of property and there was no joint estate, she and her husband would each have had ownership of their own separate assets and they would not have been liable for each other’s debts during the course of the marriage. But when the marriage was ended by his death, as the representative with the letter of authority, she is obliged to pay all the debts from his deceased estate before she can inherit from his estate.

She could contact Legal Aid to ask for further advice. It is a means-tested government organisation that must help people who can’t afford a lawyer:

Legal Aid Advice Line (Toll-free): 0800 110 110

Legal Aid Ethics Hotline: 0800 153 728

Please-Call-Me number: 079 835 7179

Wishing you the best,

Answered on March 23, 2022, 3:42 p.m.

See more questions and answers

Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.