What Is a Deceased Estate?

When someone dies, their property does not simply pass to whoever is standing closest. It becomes an estate — a bundle of assets and liabilities that somebody must gather in, pay out of, and then distribute according to law. This article explains what goes into that bundle.

Two kinds of property

Section 1 of the Public Curator Act (Chapter 81) defines the two categories, and the definitions are broader than everyday language suggests.

Personal estate

“Personal estate” includes leasehold estates and other chattels real, money, shares of Government and other funds, securities for money, debts, choses in action, credit goods, and all other property — together with any share or interest in any of those things. What it excludes is anything that counts as real estate.

A chose in action is a right to something that you enforce by suing rather than by picking it up: money in a bank account, wages owed, an insurance payout, a debt someone owes the deceased. It is property even though you cannot put it in a bilum.

Real estate

“Real estate” includes messuages, lands, rents and hereditaments of freehold or any other tenure, whether corporeal, incorporeal or personal; any undivided share or interest in them other than a chattel interest; and — the practical part — land included under a lease for 21 years or more.

What is not in the estate

This is the point that causes the most grief, and the Act does not spell it out because it does not have to: customary land is not the deceased’s to give.

Customary land is held by a clan or kinship group according to custom, and it passes according to that custom — through the male line in a patrilineal society, through the female line in a matrilineal one. It does not form part of an estate that the Public Trustee gathers in and distributes, and a will cannot redirect it. See customary land explained and when someone dies.

What comes out before anyone inherits

People think of an estate as what is left to share. The law thinks of it as what remains after the estate has met its obligations. Section 1 defines the “purposes of administration” to include payment, in due course of administration, of:

• debts, funeral and testamentary expenses, duties and commission;
• costs, charges and expenses of the executor or administrator; and
• any other costs ordered to be paid out of the estate.

Two of those deserve emphasis. Commission is what the Public Trustee charges for administering the estate — under section 42, an estate becomes liable for commission and charges once the Public Trustee or an agent has taken possession, whether or not the Public Trustee goes on to administer it further. And under section 41, the Public Trustee may advance money for necessary expenses and charge the estate interest at up to 5% per annum until repaid.

Beneficiaries receive what is left. If debts exhaust the estate, there is nothing to distribute.

Testate and intestate

Two words you will meet immediately:

• Testate — the person left a valid will. The estate is distributed according to it, and the person who carries that out is the executor named in the will.
• Intestate — there is no valid will. Distribution follows the law of succession, and the person who carries it out is an administrator appointed by the court.

A person can be partly intestate, where a will disposes of some property but not all of it. The detailed rules sit in the Wills, Probate and Administration Act (Chapter 291), and part 5 of this series explains who does what.

Small estates are treated differently

The Act contains several thresholds designed to stop modest estates being eaten by process:

• Section 5B(g) — the Public Trustee may issue directions to deal with an estate valued at less than K50,000.
• Section 24(1) — where the net value of an intestate estate does not exceed K400, the Public Trustee may pay the whole net balance to the widow or widower.
• Section 22 — where an infant’s share on an intestacy does not exceed K1,000, the Public Trustee may pay it to a suitable person to be applied for the child’s maintenance, education and advancement, or apply it directly.

The K400 and K1,000 figures have not moved with inflation, which tells you how old parts of this Act are.

When nobody is entitled

If real estate vested in the Public Trustee belongs to the State as bona vacantia — ownerless goods — section 23 requires the net proceeds of sale to be paid into the Consolidated Revenue Fund. This is the end of the line for an estate with no will, no next of kin and no claimant.