Service delivery failures at masters’ offices impact the economy

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

The efficacy 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 at these offices disadvantages the poorest of the poor, says Ian Brink, chair of the Fiduciary Institute of Southern Africa (Fisa).

This is particularly true for the 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 deceased estates has set the standard in poor service delivery. This has a direct bearing on the lives of ordinary South Africans. The question is whether our current approach is suitable, given the continued service failures.

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

Brink says these are simple estates to administer, especially when the main beneficiaries are adults with a fair level of education. Some of these estates have been “fast-tracked” in the past but this has also fallen by the wayside in recent times.

In the UK, for example, there is a system where the executor is appointed and carries on with the process of winding up the estate without any further intervention from the regulator until the final proof of distribution is lodged with the regulator. In the South African context it is the masters’ offices.

A grant of probate

Fisa has been suggesting that SA follow a similar approach to the UK where the master’s office appoints a professional executor, gives proof of appointment (called a grant of probate) and the professional carries on with the process. Potential risks can be addressed by requiring the executor to offer 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 it requires is the appointment of an executor who is then allowed to transfer the property into the name of the surviving spouse, call up the accounts from the bank or investment company and pay the money to the surviving spouse. The estate is wound up.”

However, with our current system the master’s office keeps control over the entire process – despite having appointed a professional person. Why also do the work if you have already appointed someone to do it, asks Brink.

Checks and balances

Fiduciary professionals currently experience a lack of managerial capacity within the masters’ offices, with no checks and balances for proper control over processes. There is also no consistency in the processes among the various offices.

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

An important feature to effectively perform the critical duties is the use of information technology. Unfortunately, this is either non-existent or unreliable.

Brink adds that the masters’ offices are not solely to blame for service delivery failures and delays in the winding up of deceased estates.

External problems with financial institutions changing their requirements for issuing vouchers in terms of assets also cause delays.

The Department of Home Affairs is supposed to issue a death certificate after receiving a notice of death. In terms of the Income Tax Act an employer is required to deliver an employee’s tax certificate within 14 days of the date on which employment ceased, either to the former employee or to a deceased employee’s representative. There have been cases of non-compliance with these duties.

Service failure at the Government Printing Works has also led to delays in advertising the liquidation and distribution accounts.

Another major problem is the lack of proper communication in the reporting of divorce court orders to the Department of Home Affairs. Fiduciary professionals have been faced with the situation where someone got divorced, but when they passed away it was found that the court order hadn’t been reported. “This obviously gives rise to a lot of problems and delays,” remarks Brink.

Solutions

Adopting the UK probate model will alleviate pressure on the master’s office to deal with more complex matters and to monitor the winding up of estates where there are vulnerable beneficiaries such as minor children or incapacitated individuals.

While SA does not have a permanent process of fast-tracking less complex estates, or without the granting of a probate, the public remains at the mercy of the masters’ offices. There are some short- to medium-term solutions that can address the current service delivery failures.

Brink says staff members need sufficient training and the skills and staff shortages in most of the bigger offices must be addressed. The managerial capacity within the offices also requires urgent attention.

The lack of care, professionalism, and attention to detail that currently characterise the operations of the masters’ offices cannot be accepted as the norm, he remarks.

Brought to you by the Fiduciary Institute of Southern Africa (Fisa).

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