When a person dies, their beneficiaries may inherit moveable and/or immoveable assets in terms of a valid will (testate succession) or interstate succession (in terms of the Intestate Succession Act No 81 of 1987).
However, not all the heirs concerned may be thrilled with what they have inherited, and they therefore have the option to redistribute the assets among themselves by way of a written redistribution agreement.
Where moveable and/or immoveable property is left to more than one heir for instance, instead of co-ownership, an individual heir may take sole ownership of certain assets, in terms of such redistribution agreement.
The formal requirements of redistribution agreements will be briefly summarised in this article.
Formal Requirements for Redistribution Agreements
It is important to bear in mind that when heirs enter into a redistribution agreement, it must be submitted to the Master of the High Court, along with the liquidation and distribution account.
The Master of the High Court will carefully scrutinise the redistribution agreement before accepting same and it is therefore important to ensure that all the legal requirements are complied with. In terms of the Regulation 5 of the Administration of Estates Act1,
– The redistribution agreement must be writing, and
– All heirs are required to sign the redistribution agreement.
Furthermore, when immoveable property is involved, Section 2(1) of the Alienation of Land Act also provides that, if immovable property is involved in such redistribution, then it must be in writing.
In terms of Regulation 5 (1) (f) of Administration of Deceased Estates Act, where any redistribution agreement was entered into by the heirs and distribution must be made by the executor pursuant to such agreement, the redistribution agreement shall accompany the liquidation and distribution account wherein it should be specified under a subheading “Income and expenditure account”.
When entering into a redistribution agreement, it is important to ensure that all assets are redistributed equally among heirs and that the agreement is signed by all heirs, to avoid any delays with the Master of the High Court.