The Liquidation and Distribution Account — often referred to simply as the “L&D account” — is one of the most important documents in the administration of a deceased estate in South Africa. It is the formal accounting of everything the executor has done: every asset collected, every debt settled, every cost paid, and every rand available for distribution to heirs.
Without an approved Liquidation and Distribution Account, no heir receives a cent.
What Is the Liquidation and Distribution Account?
The Liquidation and Distribution Account is a formal statement prepared by the executor that shows:
- What the estate owns — all assets at their value as at the date of death.
- What the estate owes — all liabilities, including debts, taxes, and costs of administration.
- What is available for distribution — the balance remaining after all liabilities have been settled.
- How that balance will be distributed — who gets what, and in what amount.
It is essentially a final financial report on the estate, combined with a distribution plan. The Master of the High Court must approve the account before any distribution to heirs can take place.
The Two Parts of the Account
The document is divided into two sections, which give the account its name:
Part 1: The Liquidation Account
The liquidation account sets out:
- Assets — every asset belonging to the estate, with its value (immovable property, vehicles, bank accounts, investments, policies, personal belongings, business interests, and any other assets).
- Income — any income earned by the estate after the date of death (rental income, dividends, interest).
- Liabilities — all debts of the deceased (bonds, personal loans, credit cards, income tax outstanding), plus the costs of administration (executor’s fees, conveyancing fees, Master’s fees, advertising costs, bank charges).
The difference between the total assets and the total liabilities is the nett estate — the amount available for distribution.
If the estate is married in community of property, the account must also reflect the split between the deceased’s 50% share and the surviving spouse’s 50% share.
Part 2: The Distribution Account
The distribution account sets out exactly how the nett estate will be divided among the heirs. It must reflect:
- The terms of the will (in a testate estate).
- The provisions of the Intestate Succession Act (in an intestate estate).
- Any specific bequests (items left to named individuals).
- The residue and how it is divided.
- Any amounts being held in trust for minor beneficiaries.
Who Prepares the Account?
The executor is responsible for preparing the Liquidation and Distribution Account. In practice, the attorney or specialist firm acting as executor prepares it — it is a complex legal and accounting document that requires professional expertise.
The account must be: – Accurate and complete – Supported by documentation for every entry (valuations, bank statements, tax assessments, invoices) – Consistent with the terms of the will or the intestate formula – Correctly calculating executor’s fees, estate duty, and all other costs.
A poorly prepared account will be queried by the Master — causing delays — or objected to by heirs, which can lead to formal dispute proceedings.
The Formal Process: From Draft to Approval
Step 1: The Executor Prepares the Draft Account
Once all assets have been collected, all creditors identified, and estate duty and income tax assessments received from SARS, the executor compiles the draft account.
Step 2: The Account is Lodged with the Master
The finalised account is submitted to the Master of the High Court for approval, together with supporting vouchers for every entry.
Step 3: The Account “Lies Open” for Inspection
Before the Master formally approves the account, it must be advertised as lying open for inspection for 21 days (the statutory inspection period). Notice of the inspection must be:
- Published in the Government Gazette.
- Published in a local newspaper circulating in the area where the deceased resided.
- Made available for inspection at the Master’s office.
During this 21-day period, any interested party — an heir, a creditor, a dependant — may inspect the account and raise an objection.
Step 4: Objections (If Any)
If an interested party believes the account is incorrect — for example, an asset has been undervalued, a debt incorrectly included, or the distribution does not follow the terms of the will — they may lodge a formal objection with the Master in writing.
The Master will consider the objection. If the Master upholds it, the executor must amend and re-advertise the account. If the objection is dismissed, the interested party may appeal to the High Court.
Step 5: The Master Approves the Account
If no objections are received, or all objections have been resolved, the Master endorses the account as approved.
Step 6: Distribution to Heirs
Once the account is approved, the executor may proceed to distribute the estate in accordance with the account. Heirs are paid, specific bequests are transferred, and the estate is finalised.
How Long Does This Process Take?
The preparation and approval of the Liquidation and Distribution Account is one of the most time-consuming phases of estate administration. Factors that affect the timeline include:
- Complexity of the estate — more assets, more beneficiaries, and outstanding tax affairs all add time.
- SARS processing times — estate duty and income tax assessments must be finalised before the account can be completed.
- The Master’s processing load — the Master’s offices process a high volume of estates.
- Objections — any objection that requires re-advertisement adds at least another 21 days plus resolution time.
In a straightforward estate, the account can be lodged and approved within 6 months of Letters of Executorship being issued. Complex or disputed estates can take significantly longer.
What Heirs Should Know
If you are a beneficiary in a deceased estate, here is what you need to know about the Liquidation and Distribution Account:
- You are entitled to inspect it — when the account lies open, you have the right to review every line. Do so.
- You can object — if something looks wrong, you can raise a formal objection with the Master during the 21-day period.
- You cannot receive your inheritance before it is approved — any distribution before approval is unlawful.
- Delays are not always the executor’s fault — SARS, the Master’s office, and complex asset structures all introduce delays outside the executor’s control.
- You can request a copy — even outside the formal inspection period, heirs can request a copy of the account from the executor.
Frequently Asked Questions
What happens if an heir is unhappy with the distribution but doesn’t object during the 21-day period?
Once the inspection period passes without an objection, the account proceeds to approval. An heir who missed the inspection period and believes the account is incorrect would need to approach the High Court to set aside the account — a more expensive and complex process.
Can the executor pay some heirs before the account is approved?
In most cases, no. Formal distribution must wait for the account to be approved. However, the executor may, with the consent of all heirs, make an interim distribution of an amount that is clearly not at risk. This must be carefully handled.
What are the “vouchers” that support the account?
Vouchers are the supporting documents for every entry in the account: bank statements showing the closing balance, municipal valuations or estate agent valuations for property, SARS assessments, invoices for executor’s fees and legal costs, and so on.
What is “estate duty” in the context of the L&D account?
Estate duty is the tax payable to SARS on the dutiable value of the estate. The estate duty assessment from SARS must be finalised and the duty paid before the final account can be lodged with the Master.
Does every estate need a Liquidation and Distribution Account?
Estates with a gross value above R250,000 require a formal account. Smaller estates administered under Letters of Authority have a simplified process.
Trust the Process — With the Right Executor
The Liquidation and Distribution Account process is thorough by design — it protects heirs, creditors, and the integrity of the estate. An experienced executor prepares accurate accounts, manages the Master’s office relationship, and communicates clearly with heirs throughout.