An executor bond is also known as the probate bond, estate bond and fiduciary bond. When someone passes away, his or her estate is distributed through probate. Depending on the state, the probate court may require that an executor bond be purchased to ensure that the executors perform their duties correctly.
Who is required to purchase an executor bond?
A person left in charge of an estate according to the will of the deceased is known as the executor. If this person is not named in the will then the court will appoint one.
It is the executor's responsibility to protect and take inventory of the assets of the estate, contact beneficiaries and potential heirs, appraise the estate, pay off the debts of the estate, make sure that the taxes are calculated and paid, and disperse the assets. In some states, the executor is required to purchase the executor bond to ensure that these duties will be completed according to the will or approval of the courts.
Why require an executor's bond?
The executor's bond is required to protect the deceased and beneficiaries from fraud or embezzlement of the estate or assets. For instance if the executor of the will takes the inheritance and doesn't pay the creditors, they will be able to recover these amounts from the bonding company.
However, a will may stipulate that an executor bond not be required. This is important because it can be difficult and time consuming to get an executor bond. The bond can also be expensive and if the executor doesn't have a way to pay for the court order bond the estate and/or inheritance cannot be accessed until the bond is paid for.
Where can I buy an executor bond and for how much?
An executor bond is one of the many types of surety bonds. You can purchase one from a bonding or insurance company, including SuretyBonds.com. The bond acts a lot like insurance except that if the bonding company has to pay the insured must pay back the full claim.
The price of the executor bond varies according to the value of the estate and/or the amount of debt.