The executors of estates have a difficult job. Making sure that the assets of an estate get to the right people is not always easy. Many people will fight to try to get more than they should. Others will argue about what everyone was supposed to get. The larger the estate, the bigger the problems can become.
It is up to the individual to decide who the executor of their estate will be. This decision is made before that individual dies. The person may be a lawyer or it may be a friend of the deceased. There are no rules about how the executor is supposed to be. The hope is the executor will handle the assets of the estate in a fair and ethical manner. Most executors will do this, but there will be some that will try to commit fraud or will mishandle the assets of the estate in some way. The problems that are created can be the result of an honest mistake or it could occur on purpose. Either way the people that are supposed to receive the assets of the estate are going to be harmed. It is a good idea to protect the estate by making sure that the executor of the estate has an executor bond in place before they make any decisions about the assets.
What is it?
An executor bond is a type of surety bond. It guarantees the assets of an estate will be handled properly. The executor bond is used to make sure that the executor does their job as required by law. If the executor fails to do the things they are supposed to do, the people that are harmed by the actions can collect a claim on the bond.
Although an executor bond is similar to an insurance policy, there are some differences. An insurance policy collects regular premiums. It pays claims that are legitimate when they are filed. The bond collects a fee that is based on a percentage of the amount of the bond. If a claim is filed, it will be paid, but the owner of the bond will be responsible for any money that is paid out.
Are executor bonds required?
Executor bonds may or may not be required. There are some states that require an executor to have a bond before they perform their duties, but not every state requires this. It is also possible to get a waiver that allows an executor to avoid having to get a bond. Many courts will also require an executor to get a bond before they do anything for an estate.
In the end, it often depends on who the executor of an estate is. Family members that handle the assets of an estate may not need this bond. When an executor has no relationship with the deceased, it may be a very good idea for the heirs to make sure they have the bond in place.
Where to get executor bonds
Executor bonds can be obtained from companies that sell other types of surety bonds. They will require an individual who is purchasing the bond to fill out an application and to undergo a credit check.
Dealing with the death of a family member is not easy. It is a time when people make decisions based on emotions instead of thinking clearly about what they are doing. It is very easy to trust an executor to do their job and to do it fairly and ethically. If the executor has an executor bond in place, they are more likely to follow through on their responsibilities. If they do not do that, the heirs of the estate are protected and will get what they are due.