What to do with assets in South Africa when a person dies offshore

What to do with assets in South Africa when a person dies offshore

With so many South Africans having emigrated over the years, there is now a large expat population scattered all around the world. Often expats think that when they leave South Africa, they leave everything behind –  including investments, retirement annuities, and other assets, which is not the case. Others might choose to leave certain assets behind in South Africa, as a nest egg should they ever decide to return. What happens to these assets when the owners die abroad? Let’s take a look at some of the practicalities involved with regard to South African-based assets after death.

What happens when a South African dies overseas?

A deceased estate is created when a person dies, leaving behind a will or assets. This estate must be administered and distributed in terms of the deceased’s (valid) will, or according to the rules of intestate succession. The procedure that needs to be followed is determined by the Administration of Estates Act. As such, the death of any South African outside of the Republic must be reported to the Master of the High Court.

Follow this link to read how to report an estate to the Master or at a service point of the Master of the High Court.

What happens to assets in South Africa after an individual has passed?

As mentioned, assets remaining in South Africa must be dealt with in terms of the Administration of Estates Act, which means that an estate must be registered and wound up in South Africa.  Where an individual has assets left behind in South Africa – such as immovable property, shares, pensions, or policies – a will is the best way to ensure they are dealt with according to the individual’s wishes after their passing.

Winding up an estate from overseas

• A will drafted in the jurisdiction where the assets are held simplifies the administration process.
• The individual’s valid will determines how their assets are dealt with, and the proceeds of an estate can be paid out to nominated beneficiaries if they are overseas.
• An estate bequeathed to a spouse in full is not subject to estate duty.
• For any other bequeathment, the first R3,5m of the value of an estate is not subject to estate duty.
• Should an estate in South Africa be liable for estate duty, it will be levied at 20% on the dutiable estate up to R30 million, and 25% on the dutiable estate value where it exceeds R30 million.

How do I find unclaimed funds for a deceased person from South Africa?

If you’re wondering how to find out if a deceased parent had life insurance in South Africa, this is a good question. Particularly given that the Association for Savings and Investment South Africa (ASISA) recently noted that at the end of December 2021, South Africa had R33.5 billion in unclaimed assets, comprising thousands of savings, investments held on behalf of policyholders, beneficiaries, investors, and heirs.

How is this even possible? Usually, companies are entitled to cancel a member individual’s right to claim an unpaid amount after three years, but this right has been waived in terms of the Prescription Act. ASISA has been tasked with honouring valid claims on unclaimed policy benefits and investment proceeds, no matter how long it takes to trace policyholders, beneficiaries, investors, or heirs.

Unclaimed funds in South Africa:

• A right to an unclaimed asset in South Africa remains valid until the claim is paid out, or the asset returned, no matter how long it takes.
• Unclaimed assets do not become the property of the product provider or its shareholders.
• These rules do not apply to retirement annuity policies and preservation fund products, however, as these are governed according to the Pension Fund Act.

How to find unclaimed funds for deceased persons in South Africa

Where policyholders cannot be contacted or traced after three years, their assets become ‘unclaimed’. If an heir, investor, or other beneficiary wishes to check whether they have a claim to such assets, they can:

• Contact the ASISA member and fill out the request forms to see if there is a valid claim;
• If there is a valid claim they will be directed to begin the formal claim process with the relevant company.

ASISA members usually have website contact portals for direct handling of such matters. A full list of ASISA members can be found here.

How to find unclaimed pensions in South Africa

The Financial Sector Conduct Authority (FSCA) runs a central database – Unclaimed Benefit Search Engine –  which South Africans can use to check whether any unpaid pension benefits are due to them.

• You can search by name, surname, ID number, fund name, or name of employer.
• If there is a match, you will be provided with the contact details of the relevant fund or administrator.
• From here, you will need to contact the fund directly and follow their specific claims process to prove a valid claim.

Can I withdraw money from a deceased person’s account in South Africa?

Upon death, the estate of the deceased individual is frozen, and no one can withdraw funds from the deceased’s South African bank accounts or dispose of any assets without the necessary permission from the Master of the High Court.  Once such permission has been granted, it is necessary to follow each specific bank’s requirements, a list of which can be found on the FISA (Fiduciary Institute of SA) website.

For tips on how to transfer money out of South Africa, if you have received funds from an inheritance, read: Deceased estates – the FYI on claiming your inheritance in SA when you live abroad.

FinGlobal: cross-border financial specialists for South African expats
Cross-border inheritances can get complicated. For assistance in simplifying the process, FinGlobal’s team of experts is ready to advise you on:

• The most cost-effective way to transfer funds abroad (using foreign allowances)
• Any requirements that SARS may have (tax clearance) for you to meet
• Exchange control regulations that might apply to you

To see how we can be of assistance to you, please leave your contact details below and one of our consultants will be in touch soon!