Estate Bonds are required by the courts to administer the estates of deceased persons, incompetent persons, and minors.
Estate Bonds are mandated by the court in order to provide assurance that the executor of an estate correctly allocates the assets for an incapacitated or deceased person with whom they have been assigned fiduciary duty.
In other words, Estate Bonds are directed by the court in order to guarantee the honest accounting and faithful performance of duties by a fiduciary or trustee. Estate Bonds provide assurance that the executor of an estate appropriately handles, and distributes, the assets of the disabled or deceased person whom they are duty-bound to act on behalf of.
Who is required to provide an Estate bond?
When a person becomes an Estate Trustee of a deceased person's estate, unless otherwise provided by law, they are required to provide an Administration Bond to the court as security. The bond is required to guarantee that the Estate Trustee will faithfully fulfill their duties.
The Estate Trustee must act with honesty and diligence in the discharge of their duties. These duties include preparing an inventory of the estate, collecting the assets of the estate, paying the debts of the estate, obtaining a Final Clearance of Income Tax, and distributing the property of the estate according to law.
How to apply for an Estate Bond
The licensed Surety willprovide the court with a bond subject to receipt and satisfactory review of the following documentation:
- completed Fiduciary Bond Application and Indemnity Agreement
- completed Independent Legal Advice form, if required
- completed Personal Net Worth Statement
Supplemental documentation may include:
- copy of the Application to Court for Certificate of Appointment of Estate Trustee
- copy of Will, if applicable
- copy of Consents to Appointment, if applicable
- copy of Nominations and Renunciations, if applicable
Applications and forms can be requested by email:email@example.com
How much to Estate Bonds Cost?
Costs of the Estate Bonds vary slightly, Surety Company to Surety Company and from applicant to applicant; given the size and circumstances of the estate. A good guide is the following:
Rate: $3.50 per $1,000 of surety bond amount. Two- Three years premium payable in advance; the first year premium is considered fully earned. The 2ndand 3rd year premiums are pro-rated returned upon receipt of the original bond.
Things to Note:
Court bonds are non-cancellable and renew at each term until such time as the estate is settled and the bond is returned to the Surety Company for cancellation. Upon receipt, a pro-rated return premium is calculated and our fileis closed.
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