Most families only think about executor fees when someone passes away, and the uncertainty often adds strain during an already difficult time. People worry about estate administration costs, delays at the Master’s Office, and whether the executor’s fee will reduce what beneficiaries receive.
These concerns are justified because executor fees in South Africa are regulated, reviewed, and tied directly to the structure of the estate. Understanding how these fees work helps families prepare with clarity instead of anxiety.
An executor is the person legally appointed to administer a deceased estate. Their responsibilities include gathering documents, securing property, settling debts, managing tax compliance, and distributing assets to beneficiaries. Because these tasks involve legal accountability, the law allows executors to receive remuneration.
That remuneration follows a prescribed tariff in the Administration of Estates Act and must be approved by the Master of the High Court before payment. Knowing how the tariff works empowers families to check calculations and understand their rights as the estate progresses.
How Executor Fees Work in South Africa
Executor fees South Africa uses are not negotiated freely. They follow a statutory structure. The Administration of Estates Act and Master of the High Court rules set limits to prevent overcharging and ensure consistency.
The executor’s fee is calculated on the gross value of the estate. Gross value means the total asset value before deducting debts. This prevents manipulation, because if debts were deducted first, executors could delay liability payments and artificially change the base figure.
Executors may also charge a tariff on income that the estate earns after the date of death, such as interest or rental income. VAT is then added if the executor is VAT registered. Every amount must be submitted to the Master for approval.
Estates vary widely in complexity. A modest estate can still require intensive work if it includes rural property, business assets, foreign investments, or incomplete financial records. The statutory structure keeps fees predictable even when the workload fluctuates.
The Administration of Estates Act Tariff Explained
The core tariff is straightforward. Executors may charge 3.5 percent of the gross estate value, excluding VAT. They may also charge 6 percent on income earned after death, such as interest or rental income.
Before any fee is paid, the Master of the High Court reviews the liquidation and distribution account. This approval step acts as a safeguard against inflated or incorrect calculations.
Income earned after death forms part of the estate and must be managed with the same care as the assets. The law allows a separate 6 percent tariff on this income because administering these amounts requires the same legal oversight.
Valuations can also affect the gross estate figure. The Master may require a sworn valuation or a formal valuation, depending on the asset type.
Estate valued at R1 000 000
Executor fee | R35 000 |
Income after death | R10 000 interest → 6% = R600 |
Total before VAT | R35 600 |
Estate valued at R3 000 000
Executor fee | R105 000 |
Income after death | R25 000 rental → 6% = R1 500 |
Total before VAT | R106 500 |
Marriage in community of property
The tariff applies to the full joint estate because the estate must be dissolved as a single financial unit.
What Counts as an Extra Fee
Executor remuneration only covers the executor’s own work. Estate administration also requires additional tasks with direct costs. These are called disbursements, and they must be reasonable, justified, and supported by invoices.
Common legitimate disbursements include
- Advertising notices required by law
- Property valuations
- Bank charges and FICA verification fees
- Courier or postage costs
- Municipal clearance or bond cancellation fees
The Master often rejects charges that reflect the executor’s normal duties. Routine emails, standard file management, and ordinary photocopying rarely qualify for reimbursement.
In complex estates, executors sometimes request extra fees for exceptional work such as resolving litigation or tracing missing heirs. These requests must be fully justified and approved by the Master.
VAT on Executor Fee
VAT applies only when the executor is VAT registered. This usually includes attorneys, accountants, and trust companies. VAT is added after calculating the tariff. It does not replace or reduce the tariff.
If the executor is a lay person, VAT does not apply unless they formally appoint a VAT-registered professional to assist. In that case, VAT applies to the portion of work performed by the professional agent.
VAT Example
Estate value | R2 000 000 |
Executor fee | R70 000 |
VAT at 15 percent | R10 500 |
Total | R80 500 |
Professional Executor vs Lay Executor
South African law allows both professional and lay executors. A lay executor is usually a family member or trusted friend nominated in the will. Once appointed, they have the same legal authority as a professional.
However, estate administration is technical, so lay executors often appoint an agent to assist with compliance, tax submissions, and account drafting.
A professional executor works directly with the estate and charges the statutory tariff. If they are VAT registered, VAT is added.
Lay executors can be effective when the estate is simple and they have quick access to personal records. They must still meet statutory deadlines.
Executors Appointed in a Will
Many wills appoint a bank or trust company as executor. Institutions usually charge the full statutory tariff and add VAT. These fees can be significant in simple estates.
The Master still has discretion before issuing a letter of executorship. Families may raise concerns such as high fees or unnecessary complexity.
Institutions may agree to reduced fees when estates are simple. They cannot exceed the statutory tariff unless the will allows it or all heirs consent.
Executors Who Are Not Beneficiaries
It is common for a person to be appointed as executor even when they are not a beneficiary. This often happens in blended families.
The law treats executorship and inheritance as separate matters. Executors apply the Administration of Estates Act, protect the estate, and ensure compliance.
An executor who is not a beneficiary may resign if the responsibility becomes unmanageable. The Master may then appoint another nominated executor or a professional.
How Executor Fees Are Calculated in Practice
Families often ask how executor fees are calculated. The steps are consistent across all estates.
- Determine the gross value of the estate
- Apply 3.5 percent to that value
- Calculate 6 percent on income received after death
- Add VAT if the executor is VAT registered
- Add legitimate disbursements
- Submit the account to the Master for approval
Estate of R2 800 000
3.5% | R98 000 |
Income | R20 000 interest → 6% = R1 200 |
Subtotal | R99 200 |
VAT | R14 880 |
Final fee | R114 080 |
Estate of R5 000 000
3.5% | R175 000 |
No income tariff | — |
VAT | R26 250 |
Final fee | R201 250 |
Joint estates require special care. Because the Master dissolves the estate as a single financial unit, the tariff applies to the full joint estate.
When Executor Fees Can Be Negotiated
Executor fees can be reduced, even though the tariff sets a maximum. Executors often agree to lower fees in simple estates.
The Master can also reduce fees for poor performance or inflated charges.
- Ask for a clear calculation early
- Request supporting documents for disbursements
- Question unusual charges
- Review the liquidation and distribution account
- Avoid appointing institutions for simple estates
- Ask the Master for a review if fees seem unreasonable
Misunderstandings About Executor Fees
One misconception is that executors are paid before beneficiaries. They are not. Payment occurs only after Master approval.
Another misconception is that executors may exceed the tariff. They may not unless explicitly allowed by the will or approved by all heirs.
Beneficiaries may challenge unclear disbursements. Executor fees are separate from professional fees charged by attorneys assisting the executor.
Guidance for Families Managing Executor Fees
Families can prevent disputes by requesting early fee calculations and monitoring timelines.
Delays can increase income received after death, raising the 6 percent tariff.
Reviewing disbursements and selecting an appropriate executor helps reduce conflict.
Van Deventer & Van Deventer Inc. Attorneys
Executor fees form a meaningful part of estate administration. Van Deventer & Van Deventer Inc. Attorneys assist clients by explaining the tariff, reviewing calculations, and clarifying which charges align with the Administration of Estates Act.
We guide families through VAT implications, income tariffs, and professional agent appointments.
If you need guidance on executor fees or want to understand the cost implications of administering a loved one’s estate, Van Deventer & Van Deventer Inc. Attorneys is available
Source:
https://www.vandeventers.law/Legal-Articles/entryid/2668/executor-fees-in-south-africa-explained
