Understanding Executor Fees Before You Sign Anything

Before you agree to a professional executor — a bank, a trust company, an attorney — it's worth understanding exactly how their fee is calculated, because the detail that catches most people off guard isn't the percentage. It's what the percentage is charged on.

The Statutory Maximum

Regulations under the Administration of Estates Act 66 of 1965 set the maximum executor's fee at 3.5% of the gross value of the estate's assets, plus VAT. A separate fee of up to 6% (plus VAT) on income collected by the estate during administration (rental income, dividends, interest) can also apply.

The Detail Almost Nobody Expects: It's Charged on Gross Value

Here's the part that surprises people: the fee is calculated on the gross value of your assets — before debts are deducted — not on what your beneficiaries will actually receive. An estate with R3 million in assets and R1 million in outstanding debt still generates an executor's fee based on the full R3 million, even though the "real" estate (after debt) is only R2 million.

This means highly leveraged estates — significant property with a large outstanding bond, for example — can pay a disproportionately large fee relative to the actual value left for beneficiaries.

Is the Fee Negotiable?

Yes. The 3.5% figure is a statutory maximum, not a fixed rate. You can:

• Negotiate a lower fee with a professional executor upfront, and record the agreed rate in your will
• Appoint a family member or friend who agrees to waive the fee entirely
• Include a clause in your will explicitly capping or waiving the fee, which the Master will generally honour when the named executor accepts appointment on those terms

A Worked Example

Estate with R2.5 million in gross assets and a R700,000 outstanding bond:

• Executor's fee (3.5% + VAT) on gross R2.5m: approximately R100,625
• Actual net estate (after the bond): R1.8 million
• Effective fee as a percentage of what beneficiaries actually receive: roughly 5.6% — meaningfully higher than the headline 3.5%

Want to run the numbers for your own estate rather than a hypothetical one? Our free executor fee and estate duty calculator shows the gross-value fee and estate duty side by side — no signup required.

What This Means for Your Planning

If your estate carries significant debt against its assets, the gross-value fee structure matters even more to you than to someone with the same net worth but no debt. This is exactly the kind of detail worth understanding before you name a professional executor — not after your family discovers it in the Liquidation and Distribution Account.

Read the Whole Picture

See our related guides on what estate administration actually costs and what to do if you don't want a bank as your executor. Or skip the professional fee altogether: urWill's will builder lets you appoint a trusted family member as executor, with the security bond waiver included, at no cost. Create your will online — free.