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

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

When an estate is under administration:

  1. The deceased person's investments and assets (forming his estate) are administered by a personal representative.
  2. The income generated by the deceased's assets is considered estate income.
  3. The beneficiaries are not entitled to the estate income unless 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 determines when the administration period of an estate has ended.

For deaths before 15 Feb 2008

For deaths before 15 Feb 2008, the period of administration is one day after the date of death of the deceased to 31 Dec of the year that clearance is obtained from the Commissioner of Estate Duties.

Example: If the date of death is 30 Apr 2007 and the Probate was 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.

Example: if the date of death is 15 Aug 2017 and Grant of Representation was issued on 30 Nov 2018, the period of administration will be from 16 Aug 2017 to 31 Dec 2018.

What is an estate held in trust

When an estate is held in trust:

  1. The estate is no longer under administration and there are some more investments and assets left in the estate. These are held in trust for the beneficiaries.
  2. The 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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