Page 15 - Nexia SAB&T Estate Planning Guide 2024

u To notify all creditors of the deceased’s passing
u To collect all monies owing to the estate
u To pay all creditors and legatees
u To account to the Master, all interested parties and to the heirs
u To pay all taxes and administrative charges
u To distribute the heirs’ inheritance(s).
Heirs and Legatees
n It is important to understand the legal difference between a legacy and an
inheritance.
n A legacy or special bequest is a specific item or amount of cash that is
bequeathed to a particular person (a legatee).
n The heir is the person who inherits the residue of the estate. This is what is left
after the debts have been paid and the legacy(s) distributed.
Bequests
n Where a testator bequeaths a cash legacy to a beneficiary, he needs to be
sure that his estate has sufficient liquidity to accommodate the bequest.
n The testator needs to give careful consideration to a specific bequest of an
asset which is subject to an encumbrance. For example, where no mention is
made of a bond on a fixed property, the executor is required to settle the bond
from the estate residue and only then is he able to transfer the fixed property
to the beneficiary (free of the bond). This could have serious consequences
for the heirs (who inherit the residue of the estate), as there may be very little
residue left, after the bond liability has been paid.
n All bequests to a surviving spouse and certain public benefit organisations are
exempt from estate duty. The value of these assets may thus be excluded from
the estate for estate duty purposes.
n Refer to the detailed discussion of estate duty, for further information on this.
Bequest price
n A testator may wish to include a bequest price in his Will, in order to provide
for encumbrances on an asset. For example, he may bequeath the fixed
property subject to the beneficiary paying the bond in return for his right to
inherit the fixed property. The way in which the bequest price is worded in the
Will, has an impact on whether the liability may be included as a deduction
for estate duty purposes or not. Where the beneficiary is required to pay the

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