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Transfer of property to heirs

01 Sep 2014

One of the facts that those drawing up wills are not frequently aware of is that no transfer duty is payable on property bequeathed to heirs. 

If the heirs decide to sell the property (out of the estate) to an outsider, transfer duty will then apply but in most cases will be paid for by the buyer.

This is according to Grant Gunston, Senior Partner of the Cape legal firm Gunston Attorneys, who says this applies even when the heirs agree to distribute the property or properties amongst themselves, in a different way to that envisaged by the testator (conveyancing fees are however, still payable.)

If the heirs decide to sell the property (out of the estate) to an outsider, transfer duty will then apply - but in most cases will be paid for by the buyer.

Where a property is transferred to heirs, this can only take place at the end of the winding up process, i.e. when the Liquidation and Distribution account have lain open for inspection and objection for the prescribed period of time. If there are then no objections, the Master of the Court authorises the executor to go ahead with the distribution, including transfer of the property.

If the property is sold out of the estate to a buyer, this can take place before the will has lain for inspection, but the proceeds will then still have to go into the estate and be distributed to heirs at the end of the process.

Gunston says the above factors will have varying degrees of importance for testators and heirs, and should be taken into account when a will is drafted. "In our experience testators are well-advised to consult an attorney, well in advance, to ensure that the estate is efficiently handled and to eliminate grey areas or uncertainties. Heirs, too, should consider getting advice on the best way to deal with their inheritance. Clarity can save both time and money." 

He says heirs are often, of course, in a state of shock or mourning at the time that an estate is reported, and getting advice on the winding up process can help manage expectations. "Sometimes there can be family tensions, which are exacerbated by the grieving process and which may be well-served by a skilled mediator, particularly one with a legal background."

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