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Death taxes and fees

Oct 14, 2022

Death taxes and feesDying is an expensive business, and not only because of the cost of the funeral. There are multiple death taxes and fees that need to be paid when someone dies. If you don’t plan for these, they will reduce the value of the legacy you were expecting to leave your family.

Executor fees are paid to attorneys to wind up your estate when you die. Unless you have negotiated these fees you will be charged a maximum rate of 3.5% (4.03% with VAT) on the value of your estate.

This includes any property you have and the fees are calculated on the full value of the property, not taking any mortgage into account. The property would also need to be either sold or transferred into the heir’s name and that would incur conveyancing fees.

On a R1 million property, estate fees would be R40 000 and if the property was, for example, to be transferred to the surviving spouse, there would be conveyancing fees of around R25 000 – so a total bill of R65 000 that your estate would need to provide.

If you are married in community of property, this calculation is done on your joint estate, so includes assets in your spouse’s name. Add that to other assets and the bill starts to mount significantly. This does not even include death taxes such as estate duty and capital gains tax that could be payable if you bequeathed your estate to anyone other than a spouse.

These fees all need to be paid before your estate can be wound up and paid to your heirs. This often results in the forced sale of assets to provide enough liquidity for these costs.

Buying insurance to cover death taxes and fees

Traditionally one would purchase a life policy to cover these expenses. The life policy would be payable to the estate and would, ironically, incur executor fees. There is also no guarantee that it would be sufficient to cover the costs.

Wills administrator Capital Legacy and insurer Discovery Life both offer a full estate planning service that provides clients with a fully advised will as well as an insurance policy that completely covers the costs of winding up the estate.

The insurance premium is calculated based on your assets as stipulated in the will, and covers the costs of both the executor fees and conveyancing fees in the case of property.

If you have minor children, the costs of setting up and maintaining the testamentary trust are also covered by the insurance policy.

Capital Legacy uses its own in-house estate administration to wind up the estate and manage the testamentary trust, while Discovery Life has outsourced the service to Absa Trust.

“As we are bringing economies of scale, we have agreed a discounted fee with Absa Trust which makes it more cost effective to insure,” says Harry Joffe, head of legal at Discovery Life.

No such thing as a free will

Most estate administrators/trust companies will draw up your will for free if you nominate them as executor. This is also true for any free will from your bank.

This means they will earn the executor fees from winding up the estate. You could pay around R1500 for a will to be drawn up by a professional and then select your own executor. The executor would need to be a professional, as winding up an estate is complex and currently the Masters Court is facing serious delays due to the backlog from Covid. You need someone who is able to manage the process smoothly.

This article first appeared in City Press.


  1. Hi Maya,
    Do you perhaps have any advice on how I can determine how much life cover I would need?
    I’ve spoken to various advisers from Old Mutual, Discovery and PPS, and they’ve all given me a different amount. I just want to have sufficient cover – not being over insured or under insured. I am in my twenties, married out of community of property with accrual, and my only dependent is my spouse. I have no assets (only my job). I would very much appreciated your guidance on this.

    • Great question. My comment would be to use an independent financial adviser rather than one linked to an insurance house. It is a great time in your life to form a good relationship with a financial planner who can help you create your financial plan going forward. A general comment is that at your age, your biggest asset is your future income. More emphasis should be on disability cover/critical illness cover than on death cover. You can take out life cover that includes future cover – what this means is that you can increase your life cover in the future should you have kids etc, without significant underwriting. At this stage you just need to make sure your debts are covered on your death and, if your spouse relies on you financially, to provide sufficient cover for that liability.

  2. Hi Maya
    Thanks for this most informative and helpful article.

    I would like clarity on one statement you make: On a R1 million property, estate fees would be R40 000 and the estate would pay around R25 000 – so a total bill of R65 000 that your estate would need to provide.

    What exactly are you referring to by estate fees? Are these fees payable to SARS, or are these fees relating either to the sale or transfer of deed to the heir’s name. It just wasn’t clear to me.

    I’d appreciate the clarity.

    • I agree, that is a bit confusing and I will update the article. The R40 000 relates to the fees paid to the executor and the R25 000 is conveyancing fees to transfer the property to the heir. So in this scenario, if the property was in the name of the husband who passed away and it was transferred to the wife – it would incur conveyancing fees. If the property was sold, then the buyer would be responsible for those fees


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Maya Fisher-French author of Money Questions Answered


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