According to the Administration of Estates Act, the estate of a deceased must be reported to the Master of the High Court within 14 days from 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 his/ her attorney or accountant, or inexperienced person such as a family member or a friend. It is advisable to appoint an experienced person though who has the skills and expertise to assist in the proper administration of the deceased’s estate. We insist that nonprofessional Executors are assisted by professionals to minimise 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 his/her debts, collect monies due to the estate, identify the deceased’s heirs and distribute his/her assets in accordance with the provisions set out in the Testator’s Will. Ultimately any errors in the winding up of the estate fall on the Executor which is why the Executor requires a surety to guarantee his/her proper administration of, and accounting by him/her for all funds and property of the Estate under his/her administration as required by law. The provision of a suretyship is not an indemnity policy but rather an accessory agreement by which the surety binds itself to the Master for the Executor’s performance whilst in office. As with all suretyships, should the principal debtor (Executor) default and the surety have to make good any loss arising from such default, the surety has a right of recourse against the Executor for that amount which he has 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).
Surety bonds are provided through our Underwriter, Safire Insurance Company Limited and lodged by or us on your behalf should you require us to do so with the Master of the High Court.
Surety bond premiums for Executor bonds are set by the Master of the High Court. The premium is an annual premium of 0.5% plus VAT on the asset value of the estate and shall renew annually at the same rate or a reduced rate depending on whether the Executor has sold assets in the estate thereby reducing the value of the bond required.