Law of Succession:

ERF 222
Ms. Kgopotso Maunatlala

Chapter 16: Administration of Estates

L&D Account – Part 1
October 2023
 THE LIQUIDATION AND DISTRIBUTION ACCOUNT (THE EXECUTORS’ ACCOUNT)
PART I

Purpose of the Liquidation and Distribution Account

• Most important function of executor

• Report on his administration of the estate

• Account reflects on assets and liabilities found in the estate

• Whether assets had to be sold to obtain cash to pay the estate liabilities

• Must reflect on the “cash situation”…surplus/deficit?

• How the assets that remain will be distributed and to whom (I e. it will; intestate succession etc)

• Whether there were any income and/or expenses AFTER date of death (rental income…)

• Are there any fiduciary assets involved of which T was the fiduciary

• Calculation of possible estate duty payable

 Eight (8) elements L & D Account
• Heading
• Liquidation account
• Recapitulation statement
• Distribution account
• Income + Expenditure account
• Fiduciary assets account
• Estate duty addendum
• Certificate
Liquidation and distribution account
requirements
S 35 of Administration of Estates Act 66 of 1965
read with Regulation 5 promulgated ito s 103 of
the Act stipulate the EXPOSITION (FORMAT)
and CONTENT of the L &D Account
6 months – executors submits L&D account that
complies with regulation 5
 HEADING: Regulation 5(1)(a)
1. First and Final  Regulation 5(1)(b)
2. Liquidation + Distribution Account in the estate of o Practice: double column on the right-hand
the side (subtotals and grand totals)
3. Late… o Value of each asset or group of assets
4. ID… grouped together i.e. Household items;
5. Who resided at … Livestock; Agricultural implements… OR
6. And who died at …On … o Proceeds of assets sold by the executor
7. Marital status during the execution process(partial sale)
8. Master’s reference number

EXAMPLE:
First and final liquidation and distribution account in
the estate of deceased Amanda Little, ID number
7301120405083, who was married in community of
property to John little, ID number 6604180105080,
ordinarily residing at 10 Blom street, Penina Park,
Polokwane and deceased 28 May 2022. Master’s
reference number: 712/23
LIQUIDATION ACCOUNT p 290 – Regulation 5(1)(c)
LIABILITIES
1. Cost of Administration
* Banking costs (estate bank account) (6) R 1 000
• Advertisements(Notices): (a) debtors and creditors (x2) (7)
(b) account lying open (x2)
(8)
* Executor’s remuneration( 3,5% of Gross value(total assets) (9)
* Master’s fees( see calculation below) Max: R 7 000 (10)
• Costs of valuation (11)
• Transfer costs (12)
2. Claims against the estate
* Creditor A (13)
* Accrual claim by surviving spouse?? (14)
3. Estate duty R ……….??
(Amount transferred from Estate Duty Addendum. Thus, in practice one must See Estate Duty
1st complete Estate Duty Addendum before the amount estate duty can be Addendum
completed here))
TOTAL LIABILITIES R 2 000 000
TOTAL ASSETS R 9 000 000
BALANCE AVAILABLE FOR DISTRIBUTION R 7 000 000
THE RECAPITULATION STATEMENT(Cash flow statement)

Regulation 5(1)(d)

1. Total of all CASH found in estate ( see claims in favour of estate) Eg R 4 000 000

2. Proceeds of assets sold R 1 000 000

(As per Liquidation account

MINUS(less)

1. Total liabilities R 2 000 000

(As per Liquidation account ie admin costs, claims against and possible estate duty
payable by estate)

2. Any cash legacies R 100 000

Surplus / Deficit R 2 900 000

If there is a deficit, executor must sell more assets, or otherwise indicate how this deficit will
be rectified
If there is a surplus of cash, it will usually devolve upon the Residuary heir)
THE DISTRIBUTION ACCOUNT
Regulation 5(1)(e)
BALANCE FOR DISTRIBUTION AS PER LIQUIDATION ACCOUNT R 7 000 000
* Distribution assets in terms of
o Stipulations in will
o Intestate succession ss 1(1)(a) – 1(1)(f) Intestate Succession Act
o Redistribution agreement, etc.
o Section 38 take-over

* Same as Divestment note after each asset in liquidation account

o Full names of heirs

o Major / minor
o ID

• Brief detail property included in every award

• REASON for every award / any condition?
Example

1. TO: X, major son residential property 7 Marais street, terms of clause 4 of R 1000 000
will
2. TO: Daughter Y, residuary heir R XXX
THE INCOME AND EXPENDITURE ACCOUNT

Regulation 5(1)(f)

NB AFTER DEATH

INCOME ( after death)

• Rent received R 6 000
• Dividends on shares declared after death
• Interest accrued on ABSA current account after death

• Total Income: R 20 000

EXPENSES (after death)

• Payment of salaries of farmworkers
• Municipal account
• Executor’s remuneration: 6% on income collected( 6% of R 20 000)

• Total Expenses: R 10 000

BALANCE available for distribution R 16 000

To whom?
General rule: Income follows income producing asset; otherwise to residuary heir