When a property forms part of an estate

The holding vehicle for a property can facilitate or complicate the inheritance process and people with the best interests of their heirs in mind should be aware of this, said Lanice Steward, MD of the Cape Town estate agency Anne Porter Knight Frank.

“If a property forms part of an estate and is in a close corporation, a trust or even a company, the beneficiaries will probably have to work with other cc members, trustees or directors - as well as an executor - and experience shows that all of these can prove difficult and hold up the distribution of assets.

“The appointment of an executor is particularly important and great care should be taken to find a reasonable, diplomatic and fair person with the necessary expertise. The executor is responsible for seeing that if the estate includes property and it has been decided to sell it the sale is handled as quickly as possible.”

Good executors, said Steward, will liaise with property cognoscenti - in most cases an experienced estate agent or valuer - to arrive at a market-related price and will then set the sales process in motion as fast as possible.

Inexperienced or opinionated executors, said Steward, all too often do not do this. They will fix a non-negotiable price and reject any advice from the market, in some cases refusing even to discuss the matter with those who understand the market far better than they do.

“Time and again executors have tried to hold out for unrealistic prices in pursuance of what they conceive to be their ‘duty to the deceased’. This has been known to result in the home sitting on the market for months - in some cases even years.”

Steward added that executors will sometimes also insist on taking up to 50% of the agent’s commission - in addition to their fairly substantial fees - and, in her experience, will also delay and complicate other aspects of the estate apportionment.

“The message, therefore, is clear: for your heirs’ sake select an executor - and co-trustees, cc members and directors - who have no contrary attitudes or hidden agendas and who can be relied on to work solely for the benefit of your heirs.”

Article by: www.anneporter.co.za