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Also known as Executor Bond.
An (Estate) administration bond is commonly issued when an administrator is appointed to handle the estate of somebody who died without a valid will (intestate). The bond protects the estate in the event an administrator mishandles the estate while guaranteeing those intended to receive money or property will be able to claim the full value of their inheritance.
The bond does not serve as protection for the administrator.
An administrator may also be appointed by the probate court if the named executor declines to take on the responsibility. The administrator will need to pay creditors, monthly bills, and discharge any taxes owed by the deceased while it is determined how the rest of the estate will be handled.
Administrator and executor bonds are often confused. The major difference between these two bonds is that the executor bond is issued where a valid will is present.
You need one of these bonds if you are the administrator named to care for the estate of a deceased individual.
You can apply for the bond via a bonding company (Surety) with the assistance of a broker at Ai Surety Bonding. Ai Surety Bonding is recognized in all provinces across Canada to issue Administration bonds.
The cost of the bond will depend on the total value of the estate and the financial/credit profile of a nominee (principal). An applicant will have to pay an annual premium. This premium is usually a set percentage of the total bond amount.
As an administrator, you will need to be working with an estate attorney. The bond issuer will ask for their information on the application. You will need to provide your employment and income history. If the bond issuer finds you to be financially unsound, they may request your lawyer to sign or have a co-signer be included on the application. You will need to provide the initial payment for the bond at the time of approval.
If you have an administrator bond issued in a different city or province, it will not carry over for the new bond. If you live in a different province from where the deceased lived, you will need to apply for a foreign administrator bond. If you are currently working on a different estate, you will need to provide that information when applying for the new bond.
A claim can be filed against the bond and against the administrator if they fail to follow the clear wishes of the estate or mishandle the funds that result in a loss of value of the estate. By taking out the bond, the administrator is making a promise to execute their duties as administrator faithfully and responsibly.
If you have more questions about administrator bonds, give us a call at Ai Surety Bonding today or use our easy instant quoting form for fast and easy service.
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