All surety bonds or agreements protect the administration of a will, estate, or guardianship from financial misdeeds. The agreement is usually a contract between three parties. When a person is chosen to oversee the estate of a deceased person, a probate court will demand an administration surety bond.
The court-appointed administrator who must acquire the bail is known as the principal. The bonding authority is called the obligee. And the surety is the party that confirms the bond’s payment.
To safeguard the estate’s value, the court determines the bond sum. The bond amount is available for reimbursement if the administrator financially hurts the will, estate, or guardianship.
How much does it cost?
The price of an administrator surety bond is determined by several criteria, such as the estate’s size, the state in which it is needed, and other considerations. The sum is usually double the estate’s worth. You need to have a document copy of the proposed order from the court, which outlines the conditions and amount to process your bond.
The court will decide a bond amount, and the premium for a principal with good credit will generally be 0.5 to 1% of the total bond amount. Several factors can influence the premiums for executor and administrator bonds. They are:
- The occupation of the main.
- The criminal history of the principal.
- If the executor or administrator has already granted a bond in the same estate.
- Whether or not the estate has a will.
- Whether or not the principal is owed to the estate or has commercial interests there.
- The principal’s credit score and other credit report features.
- Relationship between the principal and the deceased.
- Whether or not the executor or administrator in the same estate is succeeding another fiduciary.
How can you obtain an administration surety agreement?
Initially, select a reputable surety provider with experience and expertise in the administration surety bonds. A screening procedure must be completed before an administrator gets a surety bond. By doing a credit check on the administrator, a surety underwriter may determine how financially secure and experienced they are.
This sort of bond may have the following requirements:
- Bond application submitted in its entirety.
- Court documents that refer to the agreement.
The principal will take the following measures to get an executor or administrator bond.
- Obtain copies of all probate court records, including case numbers or particular court filings.
- A surety bond agency is asked for an executor bond or administrator bond quotation by the principal.
- The agency collaborates with surety, which conducts underwriting and evaluates the principal’s perceived bonding risk.
- If the surety agrees, the surety will calculate a premium (cost), and the surety agency will offer the principal an estimate for the premium.
- If the principal accepts the quoted premium, the premium is paid, and the surety bond is purchased.
- The executor or administrator agreement is sent to the principal by the surety agency.
- The principal completes the paperwork and submits it to the probate court.
The bond’s objective is to safeguard the will, inheritance, or guardianship from financial losses. An administrator bond guarantees that the administrator will use and disseminate the estate correctly and by the law. However, someone can claim the bond if the administrator seems to be using the inheritance for personal gain instead of as the deceased would have intended.