What is an Executor Bond?
An executor 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.
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 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 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 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 bond provides a level of protection to the family and heirs of the estate.
How much will an Executor Bond cost?
The cost of a premium for an executor bond is determined by the value of the estate. A credit check of the executor may be required, which will have an effect on the cost of the premium. By requesting a free quote for an executor bond, an agent will be able to determine the cost quickly.
Executor bonds remain valid for a specific duration ruled by the courts.
How do I get an Executor Bond?
Initially, courts will require you to post an Executor Surety Bond. You will then need to find a reputable surety provider to issue this type of bond.
Here are the basic requirements on how you can obtain an Executor Bond:
- You must complete and submit an application form.
- Get a bond form, which can be obtained from the court
- Any applicable financial documents that can prove your financial capacity
- Copy of the official order or mandate by the court
Have you been appointed as an executor of a will but are unsure of what you have to do? Contact one of our expert bond agents today to get a free quote and help with the process of getting an executor bond.