Executor / Administrator Bond

A person left in charge of an estate according to the will or trust of the deceased person is known as the executor and if one is not legally named in a will or there is no will/trust, then the court will usually appoint what is called an administrator. An executor/administrator’s bond, is required at the court’s discretion and certainly if one is required in the trust/will. Depending on the state, the court may require that an executor/administrator bond be purchased to ensure that their  duties are performed correctly, and more importantly, to protect the deceased and estate beneficiaries from fraud or embezzlement. If, for example, the executor of a will takes the entire inheritance, flees to Mexico, and doesn’t pay any creditors accrued by the estate or it’s beneficiaries, the creditors & beneficiaries will be able to make claim on the bond.

It is the executor/administrator’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 certain cases, 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.

An executor/administrator bond is one of the many types of surety bonds. The bond acts a lot like insurance except that if the bonding company has to pay the executor/administrator is obligated to reimburse the surety. The price of the executor/administrator bond varies according to the value and complications of the estate, and credit score/moral hazard risk, of the applicant.