Tutorial Letter No 1-2004

TUTORIAL LETTER NO 1 OF 2004 ADMINISTRATION OF ESTATES Students are reminded of the amendments to the Estates Act that came into force during 2002. please ensure that your copy of the Statute is amended accordingly. A copy of the regulations that were also published in terms of these amendments is stated below.. Bear these changes in monetary values in mind and annotate the notes accordingly as these amendments have not yet been incorporated in the lecture notes Candidates must ensure that they are in possession of the relevant statutes ANNOTATED TO CONFORM WITH NAMIBIAN LAW and MUST bring them to class. YOU CANNOT SUCCEED IN THIS SUBJECT WITHOUT THESE STATUTES. The lecture notes are not sufficient. Bear in mind that the statutes in reference books will be in terms of the South African Law and not Namibian Law. The University has taken note of a spate of plagiarism that has occurred in the past and steps have been taken to deal with this problem. Any candidates work that does not reflect the originality in form and expression or mirrors the work of another shall be deemed to be a copy or a plagiarised work and will be punished accordingly. The punishment for copying another persons work shall be the award of a zero mark for the work submitted plus any other penalty the Board may wish to impose without considering which candidate copied someone’s work or which candidate allowed someone to copy their work It is therefore in your own interest to ensure that your assignment is entirely your own work and to ensure that no-one has the opportunity to copy your work. The following assignment must be completed and handed in to Mrs Klaaen before the start of the lectures on 22nd April. NB NO EXTENSION WILL BE CONSIDERED OR GRANTED. I would like to remind you that this is the type of question you will receive in the examinations. T.TAYLOR. SCHEDULE Definitions

1.

In these regulations, a word or expression defined in the Act has that meaning and, unless the context otherwise indicates –

2. "the Act" means the Administration of Estates Act, 1965 (Act No. 66 of 1965). Determination of amounts relating to the administration of estates

3.

For the purposes of the sections of the Act mentioned in Column 1 of the table below, the amounts mentioned in column 2 of that table apply:

4. COLUMN 1

COLUMN 2

Section 18(3)

N$ 100 000

Section 28(1 )(a)

N$ 500

Section 30(,b)

N$ 25 000

Section 34(2)

N$ 50000

Section 34(4)(a)

N$ 100

Section 80(2)

N$ 150 000

Section 90(1)

N$ 50000

Section 91

N$ 500

Section 93(1)

N$ 10

ASSIGNMENT NO 1 QUESTION 1 Answer the following questions giving your authority for your answer eg. Section and/or regulation to the Estates Act 1.1 What is the minimum Master’s fee payable in estates? 1.2 Under what circumstances can the Master dispense with an Estate Account where the assets exceed $100 000? 1.3 When is an executor obliged to obtain the approval of the Master to the sale of estate assets? 1.4 Under what circumstances can the Master insist on security by an executor even when he is exempted in the will? 1.5 A will in terms of which “A” was appointed as executor and sole heir was accepted by the Master. After “A” was appointed as executor, a later valid will in which “B” was appointed as executor was lodged with the Master. Discuss. 1.6 The preliminary inventory reflected assets of $150 000. after appointment, the executor discovers that a major asset valued at $80 000 was in fact not the deceased’s asset Discuss. QUESTION 2 John Smith, who died on 13 July 2003, left a will dated 14 March 1999, which reads as follows: "I appoint my wife Sophia as Executor. As a legacy I bequeath to my illegitimate son Thomas Webber the sum of $5 000.00. I bequeath the residue of my estate in equal shares to my other three children." The deceased left the following family: 1/ his ex-wife Sophia Smith who he divorced on 10 June 2003 2/ His daughter Mary Peters married out of community of property, 3/ His daughter Sally Smythe married in community of property, 4/ His grand son, William Smith, son of Gavin Smith who died simultaneously with the deceased. 5/ His grandson , Martin Smith adopted son Gaven 6/ Illegitimate son Thomas Webber born 14 October 1984 The assets of the estate consisted of; 1/ Farm property valued at $600 000 2/ Movables valued at 100 000 3/ Old Mutual shares 40 000 4/ Cash in the bank 10 000 Dividend on Gold Field shares declared after death 20 000. The deceased also held the fiduciary interest over shares in Namdeb Ltd valued at $500 000. Dividends declared prior to death on the Fiduciary shares amounted to $50 000 On the death of John Smith the fiduciary shares devolve on his Brother Tom. The liabilities are: 1 Usual administration costs and other debts totaling $100 000 2 Claim by the guardian of Thomas for maintenance at $500 per month for 20 months

10 000

Using the above and your own facts where necessary, draw up the following documents. 2.1

The heirs do not wish to sell the assets. Draw up a redistribution agreement. For the purpose of this question each heir should inherit the same amount that they would have inherited if the assets were sold at valuation.

2.2 2.2.1 2.2.2 2.2.3 2.2.4

The following sections of the Liquidation and Distribution Account: Liabilities section Distribution account Fiduciary asset account Income Account

2.3

The mother of Thomas does not want the amounts due to him to be paid into the Guardians Fund. She is prepared to give security for these amounts. Advise her of her rights.