Unlike things such as paying debts and distributing assets, for first time executors, the requirement for a bond is most likely not something that the executor is familiar with. Understanding when a bond is required and what a bond is can be an essential part of administering an estate. Consulting with a New York estate attorney is the best way to figure out how to move forward if the Surrogate’s Court requires a bond.
A bond is similar to an insurance policy. For Surrogate’s Court, a bond is meant to protect the assets of an estate from wrongful acts on behalf of the executor, such as if the executor is stealing from the estate or otherwise acts improperly. Usually, the amount of the bond is based on the value of the estate.
While someone could be appointed the executor by the court, it is possible for that executor to be rejected from getting a bond, usually because the executor poses a risk based on criminal history or bad credit. This is because bonding companies are reluctant to bond a potential executor who may pose a risk to the estate. If the bonding company rejects the Executor, it is likely that they will have to forfeit the position.
Most times, in recent years, a will does not require the executor file a bond, but a bond could still be required if the will is silent on whether or not it will be required. Bonds are usually required in the case of intestate estates unless all of the potential beneficiaries agree to allow the administrator to take on their duties without a bond. Finally, if an executor is from out of state, it is more likely that the court will make them get a bond.
Once the executor has paid off all of the estate creditors and gave the beneficiaries of the estate their inheritance, and the probate has been completed, the bonding company will terminate the bond.
Working with a New York estate attorney is the best way to avoid issues when it comes to settling the estate and getting the bond terminated. Each jurisdiction in New York may handle bonds differently and may have different requirements. Hiring an attorney who knows how each jurisdiction works is important. If you would like to speak to an attorney, call Albert Goodwin, Esq. at (212) 233-1233.