Safe Custody for Executors and Deceased Estates

The executor's role in protecting estate assets

An executor is the person appointed to administer a deceased estate. In South Africa, an executor's authority comes from letters of executorship issued by the Master of the High Court. In some smaller estates, the Master may instead issue letters of authority. A person nominated as executor in a will does not have authority to administer the estate until the Master has issued the appropriate document.

Once appointed, the executor's broad duties include identifying and taking control of the estate's assets, protecting them, establishing their value, paying the estate's debts and taxes, and distributing what remains in line with the will or the law of intestate succession. The executor accounts to the Master during the process, usually through an inventory of assets and, later, a liquidation and distribution account.

Protecting movable valuables is often one of the first practical concerns. Jewellery, watches, coins, bullion and art can be easy to move and difficult to trace, and family members may hold different memories of what was promised to whom. Secure, neutral custody gives the executor time to complete the legal process without those items being at risk or in dispute.

What neutral custody means for an estate

Neutral custody means the assets are held by an independent third party, on terms that do not favour any one beneficiary. The custodian does not decide who is entitled to what. It holds the items securely, keeps a record of what it received, and releases them only on proper authority.

Neutral custody can be useful when:

• the deceased kept valuables at home, and the home will be empty, sold or occupied by others;
• beneficiaries live in different places and cannot all be present when items are moved;
• there is uncertainty or disagreement about particular pieces;
• the executor is a professional who needs a clear record of each item's movements; or
• valuations, sales or distributions will take some time to arrange.

A neutral custodian is not a substitute for legal advice. The executor and the estate's attorney remain responsible for the administration, and the custodian acts on their lawful instructions.

When the deceased already had a safe deposit box

If the deceased rented a safe deposit box, the provider will usually restrict access once it is notified of the death, and authorised-user arrangements made during the client's lifetime may no longer apply. This protects the contents until someone with legal authority is in place, so it helps to notify the provider as soon as reasonably possible.

Under Knox's agreement, if the First and Second Authorised Persons have both died, the Third Authorised Person automatically takes full control of the box; if all the client's authorised people have died or become permanently incapacitated, the executor, curator or other person legally responsible for their affairs takes their place.

Family members sometimes hope to open a box quickly to look for a will or a policy document. Practice on this varies between providers, and the Master or a court may give directions in particular cases. Ask the provider what it requires before anyone visits, so that the visit is not wasted and nothing is done that could later be questioned.

Taking an inventory

A careful inventory protects the executor, the beneficiaries and the custodian. It is sensible to record each item before it is moved, ideally in the presence of a second person such as a family representative or the estate's attorney.

A useful estate inventory usually includes:

• a description of each item, including type, metal colour, visible stones, maker or brand where known, and any engravings;
• photographs of each item, taken against a plain background;
• for coins and bars, the type, size, quantity and any refiner marks or packaging;
• for art, the artist, title if known, medium, dimensions and any labels or inscriptions on the back;
• where each item was found and who was present; and
• any documents found with the items, such as certificates, valuations, purchase receipts or insurance schedules.

Describe items factually rather than by assumed value. “Yellow-metal ring with a clear stone” is more accurate than “gold diamond ring” until the item has been tested. Keep serial numbers and other identifying details in the executor's private file rather than in emails or widely shared documents. Ask the custodian how it records items at intake and what receipt it provides, so that its record and yours can be matched.

Valuation for the estate

The executor generally needs values for the estate's assets as at the date of death. These values feed into the inventory, the estate accounts and any tax calculations. For valuables, the type of valuation matters:

• Metal value reflects the weight and fineness of gold, silver or platinum at market prices. It is most relevant for coins, bullion and jewellery that will be sold for its metal.
• Market or resale value reflects what an item could realistically sell for, which may include design, maker, condition and demand.
• Insurance replacement value reflects the cost of replacing an item, and is often higher than what the item would sell for.

An insurance valuation found among the deceased's papers may therefore not be the right figure for estate purposes. Executors often use independent valuers for jewellery, watches and art. Metal-composition testing can confirm what an item is made of, but it does not value gemstones, authenticate a watch or appraise an artwork.

Estate duty, capital gains tax and other tax questions

A deceased estate can have tax consequences, and executors deal with SARS as part of the administration. Estate duty may be payable on the dutiable value of an estate, after allowable deductions and any abatement. Capital gains tax can also arise on death, because the tax rules generally treat the deceased as having disposed of assets at market value on the date of death, subject to specific exclusions and rules, such as those for assets that pass to a surviving spouse.

Bullion, jewellery and art can all be relevant to these calculations, which is another reason why accurate valuations and records matter. Thresholds, rates and exemptions change at each Budget, and the treatment depends on the facts of the estate. Executors should take advice from the estate's attorney or a registered tax practitioner, and can find general guidance on the SARS website.

Access, release and authority

During the administration, access to items in custody is usually limited to the executor, or to someone the executor has formally authorised, such as the estate's attorney or an appointed agent. Custodians commonly ask for certified copies of the letters of executorship, identification for each person attending, and a written authority or power of attorney where the executor is not attending personally. Identity verification requirements under the Financial Intelligence Centre Act may also apply.

An executor must provide letters of executorship (or another appointment by the Master of the High Court) and proof of identity. Knox may refuse access if it has concerns about identity or the validity of documents. The executor steps into the client's position, including responsibility for outstanding fees and costs.

Release is a separate step from access. Items are usually released to a beneficiary, a buyer or the executor only on the executor's signed instruction, which should identify each item, the person receiving it and the basis for the release, for example a specific bequest in the will or an approved distribution account. The person collecting should sign a receipt that matches the inventory.

Individuals need a copy of their ID or passport and proof of residential address dated within the last 3 months (such as a utility bill). Companies need their registration documents, VAT number if registered, and ID and proof of address for directors and shareholders holding more than 25%. Trusts need the letters of authority and trust deed, with ID and proof of address for trustees and beneficiaries. Knox may also ask for an income tax number and, for bullion purchases, a source-of-funds declaration.

Beneficiaries and disputes

Beneficiaries often want to know what is being held and when they will receive it. Executors can reduce tension by sharing the inventory with beneficiaries where appropriate, explaining the expected process in general terms and keeping a written record of decisions.

Where beneficiaries disagree, for example about who was promised a piece of jewellery, whether an item was a lifetime gift, or how a collection should be divided, neutral custody keeps the items safe and unchanged while the dispute is resolved. The custodian does not take sides and does not decide ownership. It continues to hold the items until it receives a valid instruction from the executor, an agreement signed by the relevant parties where that is appropriate, or an order of court.

If a dispute is serious, the executor should take legal advice. A beneficiary who is concerned about how an estate is being administered can raise the matter with the Master of the High Court.

Jewellery, bullion, art and documents

Different estate assets need different handling.

• Jewellery and watches should be stored separately in soft pouches or individual compartments so that pieces do not scratch one another. Keep watch boxes, certificates and service records with the inventory, as they can affect value.
• Bullion and coins should stay in their original packaging or capsules where possible, as handling and cleaning can reduce value. Record quantities carefully, because coins of the same type are easily miscounted.
• Art may need climate-aware storage, careful handling and a condition report on intake, especially if the collection will be valued, sold through a gallery or auction house, or divided among beneficiaries.
• Documents such as title deeds, share certificates and policies should be kept flat, dry and together, with copies held by the estate's attorney. Any original will that is found must be handed to the Master as the law requires, usually through the estate's attorney.

Check whether the deceased's own insurance still covers items once they are moved, and ask the custodian what cover, if any, applies while they are in its care.

The box insurance covers items of intrinsic value such as jewellery, coins, bank notes, securities and certificates, but cash is covered only up to the amount in the policy schedule. Insurance for items held in safe custody outside a safe deposit box (such as art, trunks and large items) works differently: it is based on the potential value of each item, so Knox confirms the cover for your items before intake.

Practical checklist for executors

• Obtain letters of executorship, or letters of authority, from the Master of the High Court.
• Notify any safe deposit box provider of the death and ask what it requires.
• Identify where valuables are kept, including at home, in boxes and with family members.
• Record and photograph each item before it is moved, with a witness present.
• Arrange neutral custody for items that cannot be kept secure or are in dispute.
• Obtain valuations as at the date of death from appropriately qualified valuers.
• Check insurance cover for items in transit and in storage.
• Give written instructions for every access and release, and obtain signed receipts.
• Keep beneficiaries informed, and take legal and tax advice where needed.

When you first contact a custodian, have certified copies of the letters of executorship, the death certificate, identification for each person who will attend, and any power of attorney or written authority ready.

Key takeaways

• An executor's authority comes from letters of executorship, or in some smaller estates letters of authority, issued by the Master of the High Court.
• Neutral custody holds estate valuables securely and releases them only on proper authority, without deciding who owns them.
• A factual, photographed inventory made before items are moved protects the executor, the beneficiaries and the custodian.
• Estate valuations are generally needed as at the date of death, and an insurance replacement value is not the same as a market value.
• Estate duty and capital gains tax can be relevant on death, so executors should take professional advice and refer to SARS guidance.