Executor Bond

Executor bonds are essential according to the Administration of Estates Act, which requires the estate of a deceased to be reported to the Master of the High Court within 14 days from the date of death. The person responsible for the administration of the estate is called the Executor.

An Executor is the person appointed by the Master of the High Court by way of Letters of Executorship to administer the estate of the deceased. The Executor can be a South African national or a foreigner, provided the deceased's estate, which is being administered, is in South Africa. The Executor nominated in a will by the deceased can be an experienced person, such as their attorney or accountant, or an inexperienced person, such as a family member or a friend. It is advisable to appoint an experienced person who has the skills and expertise to assist in the proper administration of the deceased's estate. A bond of security for the deceased estate may be required, particularly when the Executor is inexperienced. Additionally, understanding what a bond of security is crucial for ensuring that all legal obligations are met. We insist that non-professional Executors are assisted by professionals to minimize the risks of negligent acts, omissions, or errors in the administration of the estate. Such professionals would include persons who belong to a regulatory body such as SAICA or a Law Society.

The Executor's role is to protect the deceased's assets, settle debts, collect monies due to the estate, identify the deceased's heirs, and distribute assets according to the provisions in the Testator's will. Any errors in the winding up of the estate fall on the Executor, which is why the Executor often requires a surety bond for the executor of the estate to guarantee proper administration and accounting of all funds and property under their control as required by law. The provision of a bond of security is not an indemnity policy, but rather an accessory agreement by which the surety binds itself to the Master for the Executor's performance while in office. As with all suretyships, should the principal debtor (Executor) default and the surety have to cover any loss arising from such default, the surety has a right of recourse against the Executor for the amount paid to the Master.

The value of the bond of security (suretyship) can be reduced during the estate administration process as and when assets are sold, and upon finalisation of the estate, the bond (suretyship) must be reduced to nil such that the surety can be released from its obligations assumed under the bond (suretyship).