Introduction
Imagine handing the keys to your home to someone while you are away for several months. You trust them to look after your property, pay the necessary expenses, and return everything exactly as you left it. Even with complete trust, it’s always advisable to have safeguards in place should something go wrong.
The administration of a deceased estate operates on a similar principle.
When a person dies, the assets and liabilities they leave behind form a deceased estate.[1] Before those assets can be transferred to beneficiaries, the estate must be administered in accordance with the law. Outstanding debts must be settled, taxes accounted for, and the remaining assets distributed to the rightful heirs or legatees. This responsibility rests upon the executor of the estate. Since an executor temporarily assumes control of property that ultimately belongs to others, South African law provides important safeguards to protect beneficiaries and creditors. One of the most significant is the requirement to furnish a bond of security (“the bond”) under Section 23 of the Administration of Estates Act 66 of 1965 (“the Act”).[2]
In practice, many prospective executors expect to receive authority immediately after being nominated. However, the Master of the High Court (“the Master”) will not issue letters of executorship until the necessary statutory requirements have been satisfied. Where applicable, furnishing a bond of security is one of those requirements.
A bond of security is a financial guarantee provided by a surety company or insurer. It protects the estate against financial loss should an executor act dishonestly, negligently, or otherwise fail to administer the estate properly. In essence, it provides a financial safety net for beneficiaries and creditors while the estate is being administered. If an executor misappropriates estate funds or fails to administer the estate with the required degree of care, resulting in financial loss, the bond of security may provide compensation to the estate, thereby protecting the interests of beneficiaries and creditors.
This article examines the legal basis for a bond of security, the policy considerations underlying the requirement, and its practical application through three recent South African judgments. Real-life examples are further included to illustrate how Section 23 operates in everyday estate administration.
Section 23 of the Act: Statutory Requirement
The General Rule – Section 23(1)
Section 23(1) provides that every person appointed as an executor who is not nominated in a will must furnish security to the satisfaction of the Master before letters of executorship are issued. The proviso exempts a spouse, parent or child of the deceased unless the Master “specifically directs” otherwise.[3]
Executors Nominated in a Will – Section 23(2)
The same requirement applies to executors nominated in a will, subject to four exceptions:[4]
- Where the nominee is a spouse, parent or child of the deceased;
- Where the will was executed before 1 October 1913 and is silent on security;
- Where the will, executed after 1 October 1913, expressly exempts the nominated; executor from furnishing security; or
- Where the Court orders otherwise.
The Master’s Ongoing Power – Section 23(3)
The Master’s supervisory role does not end once and executor has been appointed. Section 23(3) empowers the Master to require additional security if the executor or the surety becomes insolvent; leaves the Republic, or where there is “any good reason therefor”.[5] This ongoing oversight ensures that the estate remains adequately protected throughout the administration process.
The Form and Cost of Security
Security is generally furnished by way of Form J262. A bond of security is usually issued for an amount equal to the gross value of the estate and serves as a financial guarantee rather than a cash deposit. Since the Bond of Security essentially acts as insurance, there is an annual premium on the surety bond, which is generally approximately 0.5% of the secured amount, plus VAT, and is payable by the estate.[6] Attorneys administering estates may, in certain circumstances, obtain bonds of security through Legal Practitioners Indemnity Insurance Fund without paying a premium subject to the prescribed limits.[7]
The practical consequence is significant.
Where security is required but has not been furnished, the Master cannot issue letters of executorship. Until those letters have been issued, the executor has no legal authority to collect estate assets, settle debts, or distribute inheritances.[8]
The Policy Rationale: Why the Bond of Security matters
The bond of security is not a procedural formality, and the requirement to furnish a bond of security is far more than an administrative formality. It reflects an essential principle of South African succession law; being that a person entrusted with, and responsible for, administering another person’s estate must also be accountable the way that responsibility is exercised.
The requirement serves three crucial legal functions:
- Protection of Beneficiaries: An executor has fiduciary control over all estate assets before distribution. The bond creates solvent funds from which beneficiaries can be compensated if the executor misappropriates or mismanages assets.
- Protection of creditors: Estate administration is a process of liquidation and payment in order of preference. This means that the executor must realise the estate’s assets, settle its debts, and pay creditors in the order prescribed by law before distributing the remaining assets to beneficiaries. The bond ensures that preferent and concurrent creditors are not prejudiced by executor misconduct or insolvency.
- Accountability and Deterrence: Since the surety has a right of recourse against the executor, the requirement discourages reckless or dishonest conduct. The executor remains personally liable to the surety for any amount paid out.
In essence, section 23 converts fiduciary responsibility into financial accountability. It strikes an appropriate balance between enabling the efficient administration of estates and protecting the financial interests of beneficiaries and creditors should something go wrong.
Real-life Examples and the size of one’s estate:
Example 1: Small Intestate Estate
An estate valued at less than R250 000,00 may be administered by the Master under Section 18(3) of the Act.[9] No executor is appointed, and therefore no bond is required. This explains why many modest estates are finished quickly and without additional cost.
Example 2: Medium Estate with a Family Executor
In an estate where a child is nominated as executor and no exemption in the will exists, the Master often waives security in terms of the Section 23(1) proviso. However, if the estate encompasses business interests or immovable property in multiple provinces, the Master may “specifically direct” security despite the familial relationship.[10]
Example 3: High-Value, High-Conflict Estate
Where heirs are in dispute, the Master frequently appoints an independent professional executor to ensure that the estate is administered impartially and to minimise the risk of bias or allegations of favouritism. Since disputes between heirs often increase the risk of challenges to the administration of the estate, the executor will generally be required to furnish security under section 23(2)(d).[11] Under these circumstances, the bond serves as the Master’s risk-management tool, protecting the estate and its beneficiaries against losses arising from the executor’s failure to perform their duties properly.
Three Recent Cases Illustrating Section 23
Moshoeshoe v Master of the High Court and Others (“Moshoeshoe”)[12]: Removal for Failure to Furnish Security
Facts: In Moshoeshoe, an executor appointed in respect of an aunt’s estate was removed by the Master after it was determined that she was not exempted from security under Section 23(2). The Deputy Master recorded that the removal was appropriate because security has not been furnished.[13]
Legal Principle: The judgment confirms that Section 23(2) is mandatory where no statutory or testamentary exemption applies. Familial relationships short of spouse, parent or child does not attract the proviso. Non-compliance is a competent ground for revocation and substitution of the executor.[14]
Relevance: Moshoeshoe demonstrates that the bond is not waived by informal family trust. The Master will enforce the statutory requirement even after initial appointment.
Piagalis v Aphane NO and Others[15] (“Piagalis”): Security as a Condition of Appointment in Conflict
Facts: In Piagalis, the estate was characterised by inter-heir hostility. The Master appointed an independent practitioner as executor. An objection was raised on the basis that the appointee would be required to furnish security. The Court held that it is “not unusual” for the Master to require from the only suitable nominee in such circumstances.[16]
Legal principle: Section 23(2)(d) confers a discretion on the Master to require security where there is “any good reason”.[17] Inter-heir conflict constitutes good reason. The court further accepted, by analogy, that security is a precondition to the granting of authority.
Relevance: Piagalis affirms that independence and suitability do not exclude the requirement. Where administration risk is elevated, the bond is the statutory mechanism to mitigate that risk.
Shorkend N.O and Others v Setton N.O and Others ZAGPJHC[18] (“Shorkend”): The Mischief Addressed by Section 23
Facts: In Shorkend, the court ordered an executor to repay a substantial sum to the estate within seven days and appointed a new senior legal practitioner as executor.[19] The order included the surrender of estate records, return of estate vehicles and vacating of estate property.[20]
Legal principle: Whilst the judgement does not interpret Section 23 directly, it illustrates the conduct that Section 23 seeks to prevent, namely – executor misappropriation and loss to the estate. The appointment of a new professional executor signals that security will now be required in terms of Section 23(2)(d).[21]
Relevance: Without a bond, beneficiaries must rely on personal execution against the executor. With a bond, the estate has immediate recourse against solvent surety. The court will not view egregious conduct by an executor lightly and will tend to call for an independent executor to be appointed, should there be any disharmony that may “imperil the trust estate and its proper administration.”
Exemptions, Reductions, and Practical Administration
Statutory and Testamentary Exemptions: The spouse, parent or child exemption in section 23(1) is qualified by the Master’s powers to direct otherwise.[22] A testamentary direction to dispense with security is persuasive but not absolute where section 23(3) circumstances arise.[23]
Reduction of Security: In terms of section 24, as assets are realised and accounted for, the executor may apply for a reduction of the bond to reflect only unadministered property.[24] This prevents estates from paying unnecessary premiums of the bond in the final stages of administration.
Professional vs Lay Executors: Lay executors often cannot obtain commercial bonds for high-value estates. However, professional executors – particularly attorneys – can access institutional bonds. This practical difference explains why the Master frequently substitutes a lay executor with a professional person where security cannot be furnished.
Conclusion
A bond of security is far more than a procedural requirement imposed by the Act. It is a cornerstone of responsible estate administration and a crucial safeguard that protects beneficiaries, creditors and the integrity of the estate itself.
Section 23 ensures that, where appropriate, executors provide a financial guarantee before assuming control of another person’s assets.[25] As the recent case law demonstrates, the Courts and the Master of the High Court consistently regard this requirement as an essential mechanism for promoting accountability, mitigating financial risk and maintaining public confidence in the administration of deceased estates.
Whether you have been nominated as an executor, are administering a family member’s estate, or are uncertain whether a bond of security is required, obtaining legal advice at an early stage can help prevent unnecessary delays and ensure compliance with the Act.
At Adriaans Attorneys, we provide practical legal guidance on deceased estate administration, applications for bonds of security, compliance with Section 23 of the Administration of Estates Act, and all aspects of estate administration from appointment through to final distribution.
[1] Section 2 of Administration of Estates Act 66 of 1965 (“Act 66 of 1965”). [2] Act 66 of 1965. [3] Act 66 of 1965. [4] S 23(2)(a)-(d) of the Act 66 of 1965. [5] S 23(3) of the Act 66 of 1965. [6] Department of Justice, Guide to Administration of Deceased Estates (2024) 12. [7] Legal Practitioners Indemnity Insurance Fund NPC, Bond of security Scheme Rules (2023) cl 2. [8] Moshoeshoe v Master of the High Court and Others ZAGPJHC 1505 (2023). [9] Act 66 of 1965. [10] Moshoeshoe v Master of the High Court and Others ZAGPJHC 1505 (2023). [11] Act 66 of 1965. [12] ZAGPJHC 1505 (2023). [13] Moshoeshoe v Master of the High Court and Others ZAGPJHC 1505 (2023) para 1. [14] S 2 of Act 66 of 1965. [15] ZAGPJHC 6 (2020). [16]Piagalis v Aphane NO and Others ZAGPJHC 6 (2020) para 2. [17] Act 66 of 1965. [18] ZAGPJHC 912 (2025). [19] Shorkend N.O and Others v Setton N.O and Others ZAGPJHC 912 (2025) prayer 10. [20] Prayer 3. [21] Act 66 of 1965. [22] Act 66 of 1965. [23] Act 66 of 1965. [24] Act 66 of 1965. [25] Act 66 of 1965.Trust and Estates Paralegal
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as legal advice.
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