Failures in service delivery in masters’ offices impact the economy

The role of the Master of the High Court is to serve the public in relation to deceased estates, liquidations, registration of trusts, appointment of trustees, curators and executors as well as administration of the Guardian’s Fund .

The efficiency of the 14 masters offices across the country has a direct impact on the economy and the lives of those they serve. However, the “capricious nature” of service delivery in these offices disadvantages the poorest of the poor, says Ian Brink, president of the Fiduciary Institute of Southern Africa (Fisa).

This is especially true for families who have lost a loved one. “There has been far too much abuse of power and far too little accountability. There is a lack of care, professionalism and attention to detail.

Deceased Estates

The administration of the estates of the deceased set the standard for poor service delivery. This has a direct bearing on the lives of ordinary South Africans. The question is whether our current approach is appropriate given ongoing service outages.

“The reality is that some of these estates have very low risks that may have nothing to do with the size of the estate; for example, if there are no minors likely to inherit, there are no complex legal structures in the estate and the surviving spouse is the sole beneficiary.

Brink says these are simple estates to administer, especially when the primary beneficiaries are adults with an acceptable level of education. Some of these areas have been “accelerated” in the past, but that has also been dropped lately.

In the UK, for example, there is a system where the executor is appointed and continues the process of liquidating the estate without further intervention from the regulator until the final proof of distribution is filed with of the regulatory body. In the South African context, these are the offices of the masters.

A concession of homologation

Fisa has suggested that SA follow a similar approach in the UK where the master’s office appoints a professional executor, gives proof of appointment (called probate grant) and the professional continues the process. Potential risks can be addressed by requiring the executor to show proof of sufficient professional indemnity insurance.

Brink gives the example of an estate worth R10 million, consisting of a house, an investment and some furniture. The surviving spouse is the sole heir.

“All that is required is the appointment of an executor who is then authorized to transfer the property into the surviving spouse’s name, call the bank or investment company accounts and pay the money to the surviving spouse The estate is liquidated.

However, with our current system, the master’s office retains control over the whole process – even if they have appointed a professional. Why also do the work if you’ve already appointed someone to do it, asks Brink.

Checks and Balances

Fiduciary professionals currently experience a lack of management capacity within masters’ offices, with no checks and balances for proper process control. There is also no uniformity in the processes between the various offices.

“The result is the inability or even unwillingness to practice sound consequence management by the managers of these offices.”

The use of information technology is an important feature to perform essential tasks efficiently. Unfortunately, this is either non-existent or unreliable.

Brink adds that the masters’ offices aren’t solely responsible for service delivery failures and delays in settling the estates of the deceased.

External issues with financial institutions changing their asset-based bond issuance requirements are also causing delays.

The Home Office is supposed to issue a death certificate after receiving a death notice. Under the Income Tax Act, an employer is required to issue an employee tax certificate within 14 days of the date of termination of employment either to the former employee or to the representative of a deceased employee. There have been cases of non-compliance with these obligations.

Service outages at the government printing plant also caused delays in the publication of liquidation and distribution accounts.

Another major problem is the lack of proper communication in communicating court orders for divorce to the Home Office. Fiduciary professionals faced the situation where someone got divorced but when they passed away it was found that the court order was not reported. “That obviously causes a lot of problems and delays, Brink remarks.

Solutions

Adoption of the UK model of probate will ease the pressure on the master’s office to deal with more complex matters and to oversee the liquidation of estates where there are vulnerable beneficiaries such as minor children or incompetent persons.

While SA has no ongoing process for expediting less complex estates, or without granting probate, the public remains at the mercy of the masters’ offices. There are short- and medium-term solutions that can address the current failures in service delivery.

Brink says staff members need sufficient training and skills and staffing shortages in most large offices need to be addressed. Management capacity within offices also requires urgent attention.

The lack of care, professionalism and attention to detail that currently characterizes masters office operations cannot be accepted as the norm, he notes.

Presented by the Fiduciary Institute of Southern Africa (Fisa).

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