As many as one in four deceased estates in South Africa are estimated to have insufficient cash to pay all the costs involved in winding them up, leading to heirs who, barring other means of raising cash, may face having their family home sold. Louis van Vuren, CEO of the Fiduciary Institute of Southern Africa, says even where an estate has more assets than liabilities there may still be a shortfall of actual cash to settle debts such as outstanding home loans, taxes and other administration expenses. "There is nothing that delays the finalisation of an estate more than a cash shortfall," he says. Even if a surviving spouse has sufficient cash for the estate administration and other expenses, in practice the money is often invested. The forced sale of assets can add to the woes of the beneficiaries because it may create additional tax liabilities depending on the tax status of the asset. Capital gains tax For instance, capital gains tax may become payable if an investment property i...
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