Estate Under Administration or Held in Trust

Beneficiaries are not entitled to estate income when an estate is under administration unless specifically stated in the Will.

Beneficiaries of an estate held in trust may be entitled to the income of non-discretionary / fixed trusts. 

Estate Under Administration

The following are features of an 'estate under administration':

  1. The deceased person's investments and assets (forming his estate)  is administered by a personal representative.
  2. Estate income is the income generated by the deceased's assets.
  3. When an estate is under administration, the beneficiaries are not entitled to the estate income. The exception is when the deceased had specifically stated in his will that certain assets be given to certain beneficiaries immediately upon his death.
  4. If the personal representative distributes the income during this period, it is estate income in the hands of the beneficiaries.

Determining the Period an Estate is under Administration

The facts of the case will determine when the administration period of an estate has ended.

 

For Deaths Before 15 Feb 2008

The period administration is one day after the date of death of the deceased to 31 Dec of the year in which clearance is obtained from the Commissioner of Estate Duties

  For example, if the date of death is 30 Apr  2007 and the Probate is issued on 31 Jul 2015, the period of administration will be from 1 May 2007  to 31 Dec 2015.

 

For Deaths On or After 15 Feb 2008

For deaths on or after 15 Feb 2008, the period of administration is one day after the date of death of the deceased to 31 Dec of the year in which the Courts issue the Grant of Representation.

For example, if the date of death is 15 Aug 2014 and Grant of Representation was issued on 30 Nov 2015, the period of administration will be from 16 Aug 2014 to 31 Dec 2015.

Estate Held in Trust

The following are features of an 'estate held in trust':

  1. When an estate is no longer under administration and there are some more investments and assets left in the estate, these will be held in trust for the beneficiaries.
  2. A trust is administered by a 'trustee'.
  3. The income derived from assets belonging to the trust is trust income.
  4. Beneficiaries may be entitled to the income of all non-discretionary / fixed trusts.
  5. If the income of discretionary trusts is distributed, it is trust income in the hands of the beneficiaries.

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