What are Estate Administration Bonds?
An Estate Administration Bond also known as an Estate Surety Bond, Estate Fiduciary Bond or a Probate Bond is the financial guarantee that an executor will perform their duties to the best of their ability. The bond is designed to ensure proper management of a deceased person’s estate, and to protect the beneficiaries and creditors from financial loss due to mismanagement by the estate administrator.
Why would you need an Estate Administration Bond?
You may need an Estate Administration Bond to comply with provincial Law. For example, according to Onterio Law, Section 35 of the Estates Act, bonds may be required based on the lack of a Will or where there is no named executor. Therefore, Estate Administration Bonds can be mandatory for executors in a number of situations including:
- Where there is no Will associated with the estate
- The executor is not named in the Will
- A child is a beneficiary
Who arranges Estate Administration Bonds?
The Estate Administration Bond is a three party estate product. Therefore, just like you would purchase your home or car insurance through a broker, if the court has ruled that an Estate Administration Bond is necessary, a lawyer or clerk will typically reach out to a broker to arrange the appropriate bond with the provider.
How are Estate Administration Bonds Calculated?
In Ontario, the size of the bond is calculated at twice the size of the estate. The premium for a bonds is typically 1.75% of the size of the bond. However, because we specialise in estate insurance, Estatesure can secure preferential rates based on 1% of the size of the bond. We can also help find the best fit in relation to underwriting requirements as some providers are more lenient than others.
What do executors need to provide when applying for an Estate Administration Bond?
To obtain an Estate Administration Bond, executors will need to prove their wealth. A financial statement which is a snapshot of their own assets will be needed. We are also able to advise on premium funding options if an executor needs to pay in instalments, or the lawyer hasn’t been able to facilitate payment of the bond through the estate.
Need help securing a Estate Administration Bond?
For further information or if you have any questions, please contact our experienced team at inquiries@www.estatesure.ca.
