court surety bond
Executor Bond
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Executor Surety Bond: What is it?
An Executor Surety Bond is a type of fiduciary or probate bond that is issued to ensure that a person’s estate is handled correctly once they have passed away.
The person responsible for managing the estate is known as the executor. If an executor is not defined in the will, then the court will appoint one for the estate. Often, courts will appoint executors entrusted with the responsibility of ensuring a person's last wishes are fulfilled.
The duties of the executor may be different in the absence of a will. If there is a will, the executor's initial task is to file with the probate court. Thus, a surety bond is required for it.
How do I get an Executor Surety Bond?
After the court has appointed you to be executor, you will then need to find a reputable surety company to issue this type of bond.
Here are the basic documents the surety company will require:
- Application form
- Court documents that reference the bond.
- Court document(s) that provides an overview of the entire case.
- Copy of the will
Have you been appointed as an executor of a will but are unsure of what you have to do?
How do I qualify for an Executor Surety Bond?
It's important that you have good credit (FICO score) to qualify for an Executor Bond. The idea is that you should be able to handle your own finances if you are expected to handle somebody else's finances.
As bond amounts become increasingly larger, the underwriter may ask additional questions about your experience handling finances. In short, the underwriter wants to determine your character and ability to ability to handle the estate.
If you can't personally qualify to get the bond, we have programs that might assist. Please call us or email us to discuss.
How much will an Executor Surety Bond cost?
Typically, the cost for an Executor Bond is approximately 0.5% of the bond amount. There is a sliding scale for bonds that are in excess of $500,000. Keep in mind that the bonds are valid for one year. You may need to renew the bond each year.
Executor Surety Bonds remain valid for a specific duration ruled by the courts.
What does an Executor do?
While court law does not require an executor to be a lawyer or professional finance expert to perform legal concerns, it makes a demand that every executor accomplishes their responsibilities with sheer honesty and diligence. The court term for this type of responsibility is "fiduciary duty," which holds the appointed executor to act in good faith in adherence to a person's will.
During times of uncertainty, getting an executor will help the family sort through the details and necessarily, does their best to act in distributing assets, paying the taxes, and maintaining the property within the confines of the law. In the absence of a will, the court will appoint an estate administrator. The administrator will supervise the estate similarly to an executor; but without a will, there are specific tasks, duties, and additional requirements involved in the process.
An executor may be a person or entity and may or may not be a beneficiary. However, it is necessary that the person assigned is capable, reliable, and an excellent communicator. Communication plays a significant role in managing an estate and taxes since these processes can be complicated. Also, executors must keep the family, other beneficiaries, and the court informed of the distribution and transaction of assets and other financial goods.
What does the Executor Surety Bond guarantee?
An Executor Bond affords protection to the family of the deceased and the estate from any unlawful actions or fraud on the part of the executor. It is a guarantee that the appointed executor will execute the will as it is expected to be. Not all states require an executor to purchase an Executor Surety Bond. Our agents will be able to let you know if it is a requirement in your state.
Since the executor of a will wields a lot of power concerning the real estate and finances of the deceased’s estate, the court may require this type of bond to make sure that there is no fraud committed. The executor may be needed to handles these duties:
- Paying off the debt of the estate
- Getting an appraisal of the estate
- Cataloging all assets and liabilities
- Notifying beneficiaries
- Conducting an inventory of the assets
- Ensures that the deceased's income taxes are paid
- Distributing the assets according to the direction of the will
- Continue making necessary payments
- Make probate decisions (inheritance, etc.)
If the executor fails to do their duty or commits illegal acts with regards to the estate, the Executor Surety Bond provides a level of protection to the family and heirs of the estate.