If you are winding up a deceased estate, the liquidation and distribution account is the document that decides when the heirs actually get paid. Nothing is handed out until this account is drawn up, approved by the Master of the High Court, advertised, and left to lie open without objection. Understand this one document and the rest of the estate process falls into place.
This guide explains what the account is, what goes into it, when it is due, and the exact steps between drafting it and paying the heirs. It also works through a plain example so you can see how the numbers fit together.
What the account is
The liquidation and distribution account, often shortened to the L and D account, is a summarised statement of everything in a deceased estate and what happens to it. In one document it lists the assets, sets out the liabilities and administration costs, shows whether there is enough cash to cover those costs, and then sets out who inherits what.
Its content and format are prescribed by section 35 of the Administration of Estates Act 66 of 1965 and the Regulations to that Act, with further guidance issued over the years in Directives by the Master of the High Court. In other words, it is not a free-form summary. The executor must follow a set structure, and the Master checks it against that structure before approving it.
When it must be submitted
The executor must lodge the account with the Master within six months of the date the Letters of Executorship are issued. If more time is needed, for example where a property still has to be sold or a tax matter resolved, the executor must apply to the Master in writing for an extension and give the reason for the delay. Missing the deadline without an approved extension is one of the ways an estate stalls.
A smaller estate under R250,000, wound up under a letter of authority in terms of section 18(3), follows a lighter process and does not always require a full advertised account. This guide covers the full account required for estates above R250,000.
What goes into the account
A full liquidation and distribution account is built from several linked sections. In plain terms they are:
The liquidation account lists all the assets in the estate at their date-of-death value, then sets out the liabilities and administration costs. Administration costs include the Master’s fee, the executor’s remuneration, and the advertising costs.
The recapitulation statement is a cash statement. It totals the cash and the assets reduced to cash, sets that against the debts and charges, and shows whether the estate has a surplus or a shortfall that an heir must cover.
The distribution account sets out who inherits what, giving effect either to the will or, where there is no will, to the rules of intestate succession.
The income and expenditure account records any income the estate earned after the date of death, such as interest or rent, and how it was dealt with.
The estate duty addendum shows the estate duty calculation where the estate is large enough to attract duty. Estate duty only applies above the section 4A abatement, so many ordinary estates show nil here. You can work a figure through the estate duty calculator to see whether an estate is likely to owe anything.
A plain example
Take an estate with a house worth R1,800,000, a vehicle worth R150,000, and bank and investment balances of R400,000. The gross value is R2,350,000.
From that, the executor deducts the liabilities and administration costs. Say the funeral cost R30,000, outstanding debts such as a bond and accounts come to R200,000, the Master’s fee is charged per the official tariff, the executor’s remuneration is charged at the statutory rate of 3.5 percent of the gross value plus VAT, and advertising in the Government Gazette and a local newspaper comes to about R1,250.
Because the gross value sits below the estate duty abatement, the estate duty line shows nil. Once every cost and debt is deducted, the balance that remains is the amount for distribution, and the distribution account then awards that balance to the heirs named in the will or, without a will, under the intestate rules.
The executor’s fee and the Master’s fee are the two costs people underestimate most. Both are set by tariff rather than negotiated, and you can see how each is worked out in the executor fees and Master’s office fees guides.
What happens after you lodge it
Submitting the account is not the end. It moves through a fixed sequence:
First the Master examines it. The Master’s office has a supervisory role and scrutinises the calculations, the costs, and the way the estate is distributed to make sure no heir is prejudiced. It is common for the Master to raise queries, and the executor must answer them and supply supporting documents before the account can proceed. This examination stage often takes around two months and is where most delays happen.
Once the Master is satisfied, the executor is given permission to advertise. A notice is placed in the Government Gazette and in a local newspaper in the area where the deceased lived, stating that the account lies open for inspection.
The account then lies open for inspection for 21 days, both at the Master’s office and at the Magistrate’s Court in the district where the deceased was resident. This gives any person with an interest in the estate a final chance to view it and object.
If no objection is lodged within the 21 days, the Magistrate issues a certificate confirming this. Only then may the executor pay the heirs, settle the creditors, and transfer any fixed property. Transferring immovable property is a separate step under the Deeds Registries Act and carries its own conveyancing cost.
Why accounts get delayed
Most hold-ups trace back to a handful of causes: incomplete or inconsistent figures that the Master queries, a property that has not yet been valued or sold, an outstanding tax matter with the South African Revenue Service, or missing supporting documents. Answering the Master’s queries promptly and in full is the single biggest thing an executor can do to keep the account moving.
Types of account
The one most estates use is the first and final account, which liquidates and distributes the estate in a single document. Where an estate cannot be fully wound up at once, the executor may lodge a first account and later a supplementary account, or an amended account where the Master requires corrections. The structure stays the same; only the stage differs.
For the wider picture of how money moves once someone dies, from frozen accounts to the final payout, see what happens to the money when someone dies.
Methodology note
This guide reflects section 35 of the Administration of Estates Act 66 of 1965 and its Regulations, which prescribe the content and format of the liquidation and distribution account, together with the standard practice of the Master of the High Court on examination, advertising, and the 21-day inspection period. The worked example uses illustrative round figures to show how the account is structured and does not reflect any real estate. The executor’s remuneration rate of 3.5 percent, VAT, and the Master’s fee tariff are set by regulation and are subject to change. Estate duty thresholds are set by the Estate Duty Act and adjusted through the Budget. Always confirm current rates and any Master’s Directive before relying on them.
Disclaimer
This article is general information on the administration of deceased estates in South Africa. It is not legal, tax, or financial advice and does not create any professional relationship. Estate administration can be complex, and figures and procedures change over time. For a decision on a specific estate, confirm the current position with the Master of the High Court or a qualified professional.
