The statutory requirement
The Administration of Estates Act 66 of 1965 deals with this under a section headed Security for liquidation and distribution. The starting position is that a person who has not been nominated by will must find security to the satisfaction of the Master before letters of executorship are granted.
That general position is immediately qualified. A parent, spouse or child of the deceased is not required to furnish security unless the Master specially directs otherwise, which removes the requirement from a large proportion of ordinary intestate estates.
For a person nominated as executor in a will, the Act imposes the like obligation to find security, subject to its own set of exemptions.
Source: Administration of Estates Act 66 of 1965, section 23 (Security for liquidation and distribution), subsections 23(1) and 23(2).
The exemptions for an executor nominated in a will
Where a person is nominated as executor by will, the Act sets out the circumstances in which the obligation to find security does not apply. These are specific and should be read against the actual will rather than assumed from general practice.
The exemptions are summarised below. Whether one applies in a particular estate is a question for the appointed practitioner, and the Master's requirement is the operative statement of the position.
Circumstances in which a will-nominated executor is not required to find security
- The nominated executor is the parent, child or surviving spouse of the testator
- The will was executed before 1 October 1913 and contains no direction that the executor find security
- The will was executed after 1 October 1913 and the Master is directed in the will to dispense with security
- The Court directs otherwise
The Master can still require security
The exemptions are not absolute. The Act contains a proviso allowing the Master to require security notwithstanding an exemption in defined circumstances: where the person's estate has been sequestrated, where they have committed an act of insolvency, where they reside or are about to reside outside the Republic, or if there is any good reason for doing so.
That last phrase carries real weight in practice. It means the Master retains a discretion that is not confined to the listed grounds, and it is the basis on which security is sometimes required in an estate where the family relationship would otherwise have removed the requirement.
The practical consequence for an applicant is straightforward. The requirement communicated by the Master is what governs. It is not safe to conclude from a family relationship alone that no security will be called for.
Source: Administration of Estates Act 66 of 1965, proviso to section 23(2).
Who pays for the security
This is one of the more useful points for an executor to know. The Act provides that the reasonable cost of the security is borne by the estate, rather than by the executor personally.
For a family member appointed to administer an estate, that removes what would otherwise be an unwelcome personal cost at a difficult time. It does not remove the executor's exposure under the counter-indemnity if the guarantor is ever called upon, which is a separate matter.
Source: Administration of Estates Act 66 of 1965, section 23(4).
What happens on default
The Act provides that where the executor fails to perform satisfactorily, the Master may enforce the security and recover from the executor or from the sureties. That is the mechanism by which the estate and its heirs are actually protected.
It also explains the shape of the arrangement from the guarantor's side. Having paid the Master, the guarantor looks to the executor under the counter-indemnity. The bond therefore protects the estate; it does not protect the executor from the consequences of failing to administer it properly.
Source: Administration of Estates Act 66 of 1965, section 23(5).
The amount, and reducing it
The amount of the security follows the value of the estate assets that pass through the executor's hands. As the administration progresses and assets are distributed, the exposure reduces, and the Act contains a related provision dealing with the reduction of security given by executors.
For a large estate administered over several years, that is worth raising with the Master through the appointed practitioner rather than leaving the security at its original level for the duration.
Source: Administration of Estates Act 66 of 1965, section 24 (Reduction of security given by executors).
How an executor bond is assessed
A guarantor issuing an executor bond is standing behind the honesty and competence of an individual handling assets belonging to heirs. The composition of the estate matters as much as its value, because complexity is what creates the scope for loss.
An estate consisting of a home, a bank account and a retirement benefit is a very different proposition from one containing an operating business, agricultural property, offshore assets or a disputed claim.
What is normally examined
- The Master's requirement, including the amount of security called for
- The will, or confirmation that the estate is intestate, and the basis of the appointment
- The value and composition of the estate assets
- Whether the estate includes a business, immovable property, offshore assets or illiquid interests
- Whether any dispute among heirs or any claim against the estate is anticipated
- The executor's personal financial position and credit history
- The executor's experience of administering estates, and whether a practitioner is assisting
- The counter-indemnity and any supporting security
Professional executors are assessed on the practice
Attorneys, accountants and fiduciary practitioners who administer estates regularly are normally assessed on their practice as a whole rather than estate by estate, including the systems, controls and trust account arrangements they operate.
For those practitioners the bond and their professional indemnity cover answer different things. The bond secures the obligations of the appointment to the estate through the Master. Professional indemnity responds to a claim brought against the practice arising from services rendered. Both are relevant and neither substitutes for the other.
Read the legal practices professional indemnity guide →
Related fiduciary appointments
Trustees and curators face comparable but separately regulated security requirements. A practitioner who acts across several capacities, or a family member appointed in more than one role, should look at each appointment on its own terms.
Read the court bonds overview →
COMMON QUESTIONS
Executor bond questions, answered clearly.
What is an executor bond?
It is security furnished to the Master of the High Court so that the estate and its heirs have recourse if the executor defaults. It is required in the circumstances set out in section 23 of the Administration of Estates Act 66 of 1965, under the heading Security for liquidation and distribution.
Does every executor have to furnish security?
No. A person not nominated by will must generally find security to the Master's satisfaction before letters of executorship are granted, but a parent, spouse or child of the deceased is exempt unless the Master specially directs otherwise. An executor nominated in a will is subject to a separate set of exemptions.
When is a will-nominated executor exempt?
Where the nominated executor is the parent, child or surviving spouse of the testator; where the will was executed before 1 October 1913 and contains no direction to find security; where the will was executed after that date and the Master is directed in the will to dispense with security; or where the Court directs otherwise.
Can the Master require security even if an exemption applies?
Yes. The Act allows the Master to require security where the person's estate has been sequestrated, where they have committed an act of insolvency, where they reside or are about to reside outside the Republic, or if there is any good reason for doing so.
Who pays for an executor bond?
The Act provides that the reasonable cost of the security is borne by the estate rather than by the executor personally.
How is the amount determined?
It follows the value of the estate assets passing through the executor's hands. The composition matters too, because a business, immovable property, offshore assets or illiquid interests introduce complexity beyond the headline value.
Can the amount be reduced as the estate is wound up?
The Act contains a provision dealing with the reduction of security given by executors. On a large estate administered over several years this is worth raising with the Master through the appointed practitioner rather than leaving the security at its original level.
What happens if the executor defaults?
The Act provides that the Master may enforce the security and recover from the executor or from the sureties. Having paid, the guarantor will normally look to the executor under the counter-indemnity.
Does the bond protect the executor?
No. It protects the estate and its heirs. An executor who administers the estate improperly remains exposed, both to the estate and to the guarantor under the counter-indemnity.
Is an executor bond the same as professional indemnity insurance?
No. The bond secures the obligations of the appointment to the estate through the Master. Professional indemnity insurance responds to a claim brought against a practice arising from services rendered. A practitioner acting as executor should consider both.
