Why and When a Surety Bond is Necessary – Part 2
Why and When a Surety Bond is Necessary
In last week’s blog post I explained what a surety bond is and why, in a general sense, it is required by courts. This week I will cover situations in which a court would or might require one.
Typically, when someone dies leaving a will and names an executor in that will to handle the adminstration of the estate, it is a family member or close friend. They usually do not require the executor to post a bond because they do not wish their estate to incur that cost. It means less money to the heirs.
If there are no executors able or willing to serve, however, the will is admitted to probate and an “Administrator C.T.A with the Will Annexed” is appointed. This might be a child or children of the decedent who were perhaps too young to serve if the will is a very old one. Courts will generally insist on a bond being posted even if the administrators are also the heirs. That’s because the creditors must be protected.
Now, clients might tell me that there are no creditors or they have been paid or the amount owed is very small. Nevertheless, the safest thing for a judge to do is not take anyone’s word for it and insist on the bond. Court rules provide for it so courts are almost always going to insist on one.
What if the proposed administrator doesn’t know exactly what the estate consists of? How do we know the size of the bond? An estimate based on the information at hand will be sufficient. The bond can always be adjusted up or down later by making a motion to to the court to modify it.
How long must the bond remain in place? We‘ll cover that next week.