What is a Liquidation and Distribution Account?

The Liquidation and Distribution Account (L&D Account) is a crucial document in the administration of a deceased estate in South Africa. It serves as a comprehensive financial statement that outlines the assets, liabilities, and distribution of the estate.

Key Features of the L&D Account

Content and Structure

• Provides a detailed overview of the estate’s financial status
• Lists all assets and liabilities of the deceased
• Shows how assets will be distributed to heirs and beneficiaries
• Includes calculations for estate expenses and taxes

Legal Requirements

• Must be submitted to the Master of the High Court within six months of the Letters of Executorship being issued
• Content and format are specified by Section 35 of the Administration of Estates Act 66 of 1965
• Subject to scrutiny and approval by the Master’s Office

Components

1. Liquidation Account:
   • Details of immovable and movable property
   • List of creditors and their claims
   • Administration charges and estate duty

1. Distribution Account:
   • Balance available for distribution
   • Names of heirs and their inheritance

1. Income and Expenditure Account (if applicable):
   • Income received after death
   • Expenses incurred during estate administration

Inspection Period

• Once approved by the Master, the account is advertised for public inspection
• Lies open for 21 days at the Master’s Office and local Magistrate’s Court
• Allows interested parties to review and potentially object to the account

Importance of the L&D Account

• Ensures transparency in estate administration
• Provides a clear picture of the estate’s financial position
• Determines how assets will be distributed among heirs
• Serves as a basis for finalizing the estate and obtaining tax clearance