Banks also to blame for major delays in finalisation of deceased estates

Beneficiaries and executors of deceased estates remain at their wits’ end due to severe delays in the administration and finalisation of these estates.

Although fingers have been pointed at the Master of the High Court for this situation it now appears that some of the major banks are also to blame. Despite urgent calls by the Fiduciary Institute of Southern Africa (Fisa) on all banks to reduce the delays, there has been little improvement.

Moneyweb is aware of an instance where an executor battled for months to obtain a certificate of balance on an investment account at the date of death from Absa.

The person died early in 2021, the executor’s battle began in April 2022, and the certificate was only issued at the end of last year.

Independent executor Adrian van Deventer has been battling to get Nedbank to close the accounts of a deceased person, pay the money into the deceased estate’s account, and issue the certificate of balance – since October last year. No response has been received from the bank despite numerous emails, visits to a Nedbank branch and threats to lodge a complaint with the Ombud for Banking Services.

Confusion and frustration

At the end of last year, Fisa issued a statement urging all commercial banks to reduce the backlog and to streamline their procedures.

Fisa chair Ian Brink says in the statement that besides having different procedures, the banks tend to change them without consultation.

This creates “internal confusion among bank staff, as well as huge frustration to Fisa members who are trying to fulfil their fiduciary duty to clients”.

Van Deventer says he took all the required original documents to the bank to have them copied and certified since some banks do not accept certified copies. The bank-certified copies were sent to the bank’s deceased estate department in October. He visited the branch again in November but was told that they are not allowed to divulge any information to him without the authorisation of the deceased estate. This, despite having a letter of executorship from the master’s office as well as a letter of attorney.

Read: How to avoid deceased estate fee and tax shocks

Moneyweb contacted the media department at Nedbank for comment but has received no response.

An Absa spokesperson said in response to questions that the Covid-19 pandemic resulted in an increase in deaths, which resulted in higher inflows within the deceased estates environment.

“Since March 2020 the industry at large, including Absa, has administered estates under growing pressure due to these increasing deaths. In this respect, we are engaging with other industry bodies to deal with the challenges as an industry,” she said.

Lack of responsibility

Fisa national councillor Angelique Visser says there seems to be a lack of responsibility on the part of most banks to provide an acceptable level of client service to the executors and heirs of their clients who have passed away.

“Some of them may have banked with the institution for decades,” she adds.

In some of the correspondence seen by Moneyweb the standard answer from banks seems to be ‘We acknowledge receipt of your email’ and ‘The matter is being escalated for further actioning’.

Van Deventer says that in his experience not all banks are to blame.

He has dealt with several cases where the deceased held accounts with FNB, and it did not “even take a week” for the accounts to be closed and the money to be paid into the deceased estate’s account.

“It should – at most – not take longer than three weeks,” he adds.

Where banks need to streamline things

Fisa’s Brink says there are critical areas that the banks need to streamline for an executor to be able to draw up a liquidation and distribution account.

These include:

• Providing certificates of balance (the executor needs these to draft the liquidation and distribution account);
• Closing the bank account in a deceased’s name and paying the proceeds into a new ‘deceased estate’ account to ensure liquidity for urgent expenses, the financial needs of the family, keeping up with insurance premiums, settling debt and so on; and
• Providing a tax certificate timeously.

Pivotal document

For most executors the finalisation of the liquidation and distribution account is one of the biggest initial hurdles to overcome in the winding up of an estate. This document gives an overview of the estate and sets out what will happen with each asset and liability in the estate.

It should be filed within six months after the appointment as executor with the Master of the High Court. The master’s office must ensure that it conforms with the wishes in the deceased’s will and validate it. Then follows the advertisements in a local newspaper and the government gazette, and the placement of copies for inspection at the master’s office and the nearest magistrate’s office in the area where the deceased lived.

Finding solutions

Visser says practitioners are able to obtain authority from the master’s office (to act as executor in an deceased estate) within two to three weeks but then have to battle for three to four months for a response from some of the banks.

She says Fisa has set up sessions with several of the banks in order to document their processes, timelines and requirements – and intends publishing this information on the Fisa website.

If the banks do not adhere to these timelines and procedures the matters will be taken up with the CEO of the institution and the Ombudsman for Banking Services. “We need to find solutions.”

People are experiencing a double blow – the loss of a loved one and then financial stress due to a lack of access to funds to survive, she says.

Listen to Amanda Visser’s interview with Fisa’s Angélique Visser (or read the transcript here):

You can also listen to this podcast on iono.fm here.