Learn more about administrator surety bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Administrator Surety Bonds?
An Administrator bond, also known as an executor bond, is a type of court bond required when an administrator is appointed to distribute the assets of a person who died intestate (without a will). The bond is intended to ensure that the administrator will properly and faithfully carry out the fiduciary responsibilities associated with the position.
Those responsibilities can include paying off the deceased’s final expenses, creditors, and taxes. They may also include distributing the estate’s remaining assets in a manner consistent with the deceased’s wishes and the rights of legal heirs. The administrator may need to work with an attorney to identify, locate, and communicate with beneficiaries.
Who Needs Them?
Any individual appointed by a Probate Court as executor or administrator of an estate is typically required to obtain an administrator bond as a guarantee against fraud or mismanagement of the estate’s assets. Typically, no administrator bond is required if a financial institution is appointed as the estate’s administrator.
How Do They Work?
Although probate court judges are careful in appointing administrators, there is no guarantee that an administrator won’t take advantage of the situation for personal gain. An administrator surety bond protects the deceased’s creditors and beneficiaries against financial loss in the event that an administrator misuses or embezzles the estate’s assets.
Anyone who believes that the administrator is acting for personal gain rather than carrying out the wishes and obligations of the deceased can file a claim against the bond. The surety company that issued the bond will determine whether the claim is valid and, if it is, will pay the claimant. The administrator, the principle in the bond agreement, is legally obligated to reimburse the surety company for that amount.
What Do They Cost?
The bond amount will be established by the court based on the value of the estate. Some states require the bond amount to be greater than the total value of the estate.
The bond premium that the administrator will pay, however, is only a small percentage of that bond amount. The specific percentage, or premium rate, is determined by the surety company based largely on the individual’s credit score and demonstrated financial management ability.
If you’ve been appointed as administrator of an estate and need to purchase an administrator bond, use our convenient online application to get started.