The short answer
If your father left the property to your mother in his will, she would need to transfer it into her own name first.
The whole question
When my father passed away, we failed to register his will. Now my mom wants to transfer their property directly to her children instead of putting it in her own name. Can she do that?
The long answer
As you probably know, your father’s death should have been reported and his will registered at the Master’s office within 14 days of his death, but having said that, it is true that many properties have remained in a deceased’s name for years before being transferred.
If your father left the property to your mother in his will, she would need to transfer it into her own name before she could transfer it to her children, whether she was still living or whether she left it to them in her will.
If the value of the property is less than R250,000, the estate can be wound up by a person called a representative who is appointed by the Master with a letter of authority at no cost to the estate. The representative’s job is to open an estate late bank account (R600) and pay all the debts and creditors before the heirs inherit what is left. The property would have to be transferred into your mother’s name by a conveyancing lawyer (R13,075). The conveyancer would also have to apply for a rates clearance certificate from the municipality, which would involve paying for some five months of municipal services in advance. The Deeds Office will not register the transfer of ownership without the rates clearance certificate.
This threshold of R250,000 was last reviewed in 2015 and property prices have gone up a lot since then, so along with other NGOs, the Transaction Support Centre in Khayelitsha has appealed to the Minister of Justice to review the R250,000 threshold and raise it, as it becomes much more expensive to wind up a deceased estate valued at over R250,000.
For a deceased estate valued at over R250,000, the Master has to appoint an executor (a lawyer) at a standard cost of 3.5% of the value of the estate. The executor must open an estate late bank account (R600) and must advertise the estate in the Government Gazette and a local newspaper (R2,000) so that creditors can make their claims against the estate within 30 days. The executor also has to prepare a Liquidation and Distribution (L&D) account, which has to be kept open for inspection at the Master’s office for 21 days (Master’s office costs are R600). The main job of the executor is to settle all the debts and claims against the estate before the property can be transferred through a conveyancer (R13,075) as with an estate valued at less than R250,000.
Then there would be the question of whether it would be cheaper or more expensive to transfer the property to the children while your mother is still alive:
If she donated the property to the children, there would be a donations tax of 20% of the value of the property after the first R100,000, payable to SARS. In other words, the first R100,000 of the value of the property is exempt from donations tax, but the balance would be taxed.
If your mother left the property in her will to the children, they would not have to pay transfer duty to SARS. But if she donated it to the children during her lifetime, the children would have to pay transfer duty on the value of the property above R1,000,000.
Ooba.com points out that SARS requires two independent valuations of the property if it is to be donated to relatives.
But it’s important to note that whether she opted to donate the property in her lifetime, or left it to the children in her will, she would still have to pay transfer costs to the conveyancers (transferring attorneys).
If she left the property to the children in her will, she could specify that the title deed be transferred directly into the children’s names when she died.
These are the documents required to submit to the Master’s office when reporting a death:
Original / certified copy of the death certificate;
Original / certified copy of the marriage certificate;
Completed death notice;
Completed next-of-kin affidavit;
Completed inventory showing all the assets of the deceased;
Nominations by all the heirs for the appointment of an Executor/Master’s Representative (if no one is appointed in a will);
If the estate is R250,000 or less – an affidavit confirming that the estate was not previously reported at any other Master/Magistrate Court;
A Declaration of Marriage by the Surviving Spouse indicating how the deceased was married;
Acceptance of Master’s Directions/Executorship, completed and signed by the person as nominated above;
Certified copy of the ID of the person to be appointed as Executor/Master’s representative.
Wishing you the best,
Answered on Aug. 2, 2022, 3:17 p.m.
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.