What is an estate bond?
An estate bond ensures that an executor of an estate fulfills their legal duties according to state or local laws. This often includes distributing an estate for someone who passed away without naming an executor in their will. An executor is appointed by the court to manage a deceased person’s affairs. This includes managing their estate (property and assets) until their taxes and debt are paid off. Once debts and taxes are paid, the estate can be distributed as outlined in the deceased’s will. Before a court appoints someone as the executor of a will (even a close relative to the deceased), they may require the future executor to post an estate bond.
Other Names for “Estate Bond”
Depending on your state, this bond may go by other names, such as:- Probate bond
- Executor bond
- Administrator bond
- Fiduciary bond
- Personal representative bond
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Quick Takeaways
- An executor is appointed by the court to manage a deceased person’s affairs.
- An estate bond ensures that an executor of an estate fulfills their legal duties according to state or local laws.
- Even if multiple states call a bond the same name, that doesn’t mean the requirements are identical.
- Frequently, an estate bond is required when minors are involved or if an executor is located outside the estate’s jurisdiction.
- When purchasing your bond, you will sign an indemnity agreement, which holds you accountable for paying for any losses you cause.
- Your bond must equal to a percentage of the estate’s total value.
How do estate bonds work?
An estate bond ensures that an executor performs their duties ethically and legally. If they break the law or act dishonestly at any point and cause beneficiaries harm, they will face bond claims. A surety will cover costs to settle any claims upfront, but the bondholder must pay back the surety in full. When purchasing your bond, you will sign an indemnity agreement, which holds you accountable for paying for any losses you cause.
Who needs an estate surety bond?
Certain states require executors to post estate bonds and sign indemnity agreements. An indemnity agreement ensures the executor pays for any damages they cause. Even if your state doesn’t require an estate bond, your county or city might. This bond may also be necessary if the will document or your probate court requests it. Frequently, an estate bond is required when minors are involved or if an executor is located outside the estate’s jurisdiction. Probate courts and will documents typically only request estate bonds if the estate is large or a lot of money is involved. Another scenario that may require an estate bond is if someone dies without a valid will. You will not need to obtain an estate bond if the requirement is waived or the court decides it’s unnecessary. Financial institutions appointed as fiduciaries (to manage money and property for the deceased) often don’t need to be bonded to carry out their roles.
Types of Estate Bonds
Depending on your state, an estate bond may go by one of the following names.
1. Administration Bond
An administration bond is required of individuals handling the administration of a deceased person’s property, debt, and belongings (i.e., their estate). The court appoints an administrator if the deceased person didn’t execute a will or if an appointed executor can’t perform their assigned duty.2. Foreign Executor Bond
A foreign executor bond ensures that any court-appointed executor residing outside the court’s jurisdiction follows all applicable laws and regulations while managing an estate.3. Probate Bond
Probate bonds are often used interchangeably with estate bonds. A probate bond is another type of court bond that guarantees the performance of an estate’s executor. It ensures that the executor fulfills their duties honestly and legally, according to the law and the deceased person’s will.4. Guardianship Bond
Those applying for legal guardianship of someone deemed legally incompetent (a minor, disabled person, or elderly adult) may need a guardianship bond. This bond ensures that a guardian puts the needs of their ward first and acts in their best interests regarding health and financial decisions.5. Fiduciary Bond
A fiduciary bond is another term used interchangeably with probate bond and estate bond. A fiduciary is someone charged with protecting another person’s interests. The courts may require fiduciaries to post a bond to ensure they fulfill their duties faithfully.Frequently Asked Questions
How much do estate bonds cost?
Your bond amount must be equal to a percentage of the estate’s total value. The court will set your bonding requirement. You will then pay a small percentage of that requirement to obtain your bond. Estate bonds are typically required for multiple years and have one- or two-year terms. You must renew your bond before its expiration for it to remain active.
How to Get an Estate Bond
To successfully apply for your bond, you must complete the correct application and may need to pass a background check. Once your application has been approved and you’ve paid for your bond, you can print it and send it to the court requiring it. You may need the following documents to apply for your estate bond successfully:
- The last will, if available
- An inventory of the deceased person’s estate
- The deceased person’s net worth statement
- An application of appointment for approval to the court
Apply for Your Estate Bond Today
If you don’t get your estate bond quickly, you could delay the probate process, which may be costly and cause serious legal issues. To get your bond as soon as possible, fill out our online form or call us at 888-435-4191. ZipBonds offers the fastest and most secure option for getting court and probate bonds.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.