The question of who becomes the owner of a deceased’s estate at the moment of death of the deceased has not been dealt with conclusively in modern South African law. Several research articles have been written on the vesting of beneficiaries’ rights and on adiation or repudiation of benefits from a deceased estate but an answer to this question has not been found. If an answer can be found, a number of different scenarios that have appeared in our courts, especially in insolvency and delict, may have easier resolutions. This question possibly also reaches further than only investigating who becomes the owner immediately upon death but probably entails the question as to who receives both the rights and the duties at that moment. This article investigates the various possible answers to this question.
There are three possible solutions to the question as to who becomes the owner of a deceased’s estate at the moment of death of the deceased and before the estate is liquidated and distributed in terms of the Administration of Estates Act. These possible answers are:
- the beneficiary or beneficiaries of the estate,
- the Master or, following in his stead, the executor, or
- the estate itself as legal persona or a sui generis legal entity.
When these various possibilities are researched, it becomes clear that each has its own set of problems and legal questions that arise from the possible answer.
Traditionally the view followed in the law of succession has been that of the court in Greenberg v Estate Greenberg 1955 3 SA 361 (A). According to this decision, the beneficiary only obtains a personal right to claim transfer or delivery of property from the executor of the deceased’s estate. This view seems to be a deviation from the common law which regarded the beneficiary as immediate owner and as universal successor. If, however, a view that the beneficiary becomes the immediate owner is followed, it can be accepted that automatic adiation takes place and that the executor only administers the estate. Transfer or delivery of the property is then no longer a requirement, as the beneficiary automatically becomes immediate owner at delatio of the estate. This view differs greatly from that followed in the law of property and applied generally in South African law. It means that delivery or transfer is no longer a requirement for transfer of property rights but becomes a mere formality with which the executor has to comply. This view therefore recognises a whole new manner of property rights transfer, namely that of delatio, which has not been accepted by our courts or academic writers. It is perhaps too far-reaching and requires a great mind shift and deviation from recognised principles, to be the best solution to the problem.
When the second possible answer, namely the executor (following in the Master’s footsteps), is considered, it appears to be the least likely solution. Practically, the executor takes over the duties of the deceased but does not, at the same time, acquire the same rights as those that the deceased had at the moment of his death. The executor only administers the estate and acts in the position of a representative of the estate. The only right that the executor does obtain, is his right to remuneration for the administration of the estate. This right, however, is not obtained from the estate but by virtue of the Administration of Estates Act. The executor does not become the owner of the estate at any stage and this view therefore does not present a solution to the problem at hand.
The third possible answer to the question, namely that the estate itself becomes the owner, seems to be the least problematic solution. Although this view also has its own related problems, they do have simple solutions. These problems include what type of entity the estate should be, as well as the question whether the estate or the entity still exists after the liquidation and distribution process has been completed.
For this answer to be applied, the estate must be seen either as a legal person or as a sui generis entity, capable of becoming the owner. As the estate does not have the traits of a legal person, it can be argued that it should rather be recognised as a legal entity sui generis. As the court in Braun v Blann and Botha 1984 2 SA 850 (A) recognised the trust as a legal entity sui generis, there should be no reason why an estate cannot also be recognised as such an entity sui generis, as the position of a trust is comparable to that of an estate.
In the past the courts have expressed themselves against a view that the estate becomes the owner. In Commissioner for Inland Revenue v Emary 1961 2 SA 621 (A), for example, the Appeal Court held against this view. The decision was criticised by academic writers and more recently there has been a move towards recognising the estate as a sui generis entity capable of having ownership. In The former Highlands residents concerning the area formerly known as The Highlands (LCC116/98,24/8/99 unreported) and Jacobs v Die Departement van Grondsake (LCC120/99)  ZALCC 7 the land rights court also expressed this view while acknowledging the Appeal Court’s view in Emary.
The last question is relevant for cases where claims are only discovered after completion of the liquidation process. The view that the estate immediately upon death becomes owner can be helpful in these cases if the estate is recognised as an entity sui generis which simply carries on the position of the deceased. Practically this does seem to be the position, as claims are lodged against the estate although the executor is the person who handles such claims.
If it is accepted that the estate as such simply takes over from the deceased and continues in his position, it would also mean that delictual claims caused by the deceased but only discovered after liquidation can still be settled with relative ease. This in turn means that universal succession as known at common law has not disappeared, as the estate will take over all the rights and duties of the deceased.
If the view that the estate becomes immediate owner is accepted, the objection against the view that the beneficiary becomes immediate owner falls away. Although a somewhat new approach is needed in that the estate has to be recognised as a sui generis entity, the approach does not require changes as far-reaching as that of the latter view. If the estate simply takes over from the deceased and continues his position, there is no question of transfer of ownership and property law principles need not be changed.
The conclusion is reached that there are merits in each of the possible answers, but each has its own problems. The best answer to the question as to who the owner of a deceased estate is, is probably either the beneficiary or the estate. The latter view presents fewer problems and is to be recommended.
Keywords: adiation; beneficiary; estate; executor; legal entity; legal person; Master; repudiation; universal succession