Probate surety bonds – what you need to know
Are you an executor? There are a lot of responsibilities when it comes to estate management.
With little to no advance warning, your role as an estate executor can quickly become overwhelming. From agreeing to be an executor, to estate management to distributing to all beneficiaries, you have a lot of details to control.
This is where probate surety bonds come in.
What exactly is a probate surety bond?
A surety bond is essentially an agreement between three parties: the principal, the obligee, and the surety. For example:
- A principal. The party that is fulfilling their obligations to the obligee.
- An obligee. The party that’s the recipient of obligations from the principal.
- A surety. The party that provides a financial guarantee to the obligee that the principal will fulfill their obligations.
Probate bonds protect the estate and the beneficiaries in the event that the executor (current estate trustee and owner) does not act in the best interest of the obligee?
In the event of an improper administration of the estate assets, the executor will be liable to pay the entire bond amount.
What makes probate bonds unique is the need to acquire a probate letter. To clarify, a probate court issues a probate letter. And a probate court officially establishes the validity of an agreement.
This process, known as the probate process, ensures added protection by ensuring that the agreements in the probate bond can hold up in court.
How the probate bond works exactly depends on a variety of factors. An ALIGNED Insurance broker will work with you to set a probate bond that meets your requirements and needs as an executor.
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How can a probate bond protect me?
Despite best intentions, worst case scenarios can happen. Probate bonds protect the estate’s assets and beneficiaries from embezzlement, fraud, and other illegal activities.
In addition, any negligence and the improper administration of the estate can be compensated in a probate bond.
A fiduciary or executor may be responsible for variety of supports. Examples include:
- Estate appraisal
- Protecting assets
- Paying off debts
- Taking care of the taxes promptly
- Making decisions regarding beneficiaries who are minors and/or those who have a power of attorney in effect
A probate bond helps guarantee that the executor will act in the best interest of the beneficiaries by drawing out a contract that legally binds the fiduciary to fulfill their duties and obligations.
To sum up, a probate bond can protect you as an executor of an estate.
How does a probate bond work?
In many cases, timing is everything.
You may need a bond ASAP. The principal needs a probate surety bond to legally start their duties of distributing the estate’s assets. Therefore, a probate surety bond must be secured before the executor can start working.
When a bond claim is made, it will be investigated. In other words, the surety will investigate the claim to determine if it is valid.
Subsequently, when a claim is found to be valid, the principal will be responsible for the amount outlined in the indemnity agreement.
The bond claim would include the agreed upon amount including legal costs.
Sometimes, circumstances are unique and require attention to detail outside of the typical probate surety bond. At ALIGNED Insurance, we can work with you to create a probate surety bond insurance solution that specifically meets your needs.
What’s the cost of probate surety bond insurance?
It depends. Arranging for a probate bond can be time-consuming and difficult. As a result, the cost of a probate bond typically is a percentage of the total value of the bond coverage.
However, depending on the size and circumstances of the estate, costs will vary and be adjusted accordingly by the surety.
Above all, we deliver value.
We specialize in business insurance only and we take time to guide you through the coverage process and deliver products and services that fulfill your specific needs.
If you would like to learn more about probate surety bond insurance costs, give us a call today, toll-free at 1-866-287-0448.
How do I choose the right probate surety bond insurance company?
The first step begins with choosing the best insurance brokerage. You will need to work with an insurance broker who has experience and expertise handling probate surety bonds that can act as an intermediary between you and the other parties involved.
Secondly, you want someone who will guide you through the process every step of the way. Someone who will work with you to gather the necessary information to formalize the bond. In addition, an experienced ALIGNED broker can help with:
- Advising you about specific conditions that must be met to qualify for the bond
- Offer consultation on the circumstances of your probate surety bond needs
- Address the unique complications of the situation at hand
- Be readily available to you if and when a claim is filed on the bond
In short, you also want to work with somebody who you feel can be trusted. They should be backed by years of experience and relevant insights, particularly about the probate bond you need.
At ALIGNED we are in this together. We deliver value, options and are exclusively focussed on commercial insurance.
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How ALIGNED Insurance brokers can help you
We’re different. Our industry peers consistently recognize ALIGNED Insurance as one of the best insurance teams in the country. This is why so many Canadian businesses choose us for their unique insurance needs.
In other words, alignment is what we deliver. Here are a few benefits you can expect when you choose us for your probate surety bond needs:
- No sales people. Unlike our competitors, the person you deal with is with you from start to finish. Through capped workloads, we ensure you and your organization will always receive the highest quality service that you deserve
- Our fee for service model. This means no commission models that our competitors use that incentivize increasing insurance costs
- We specialize exclusively in business insurance. You get nothing but the absolute best expertise, products, service, and insights for your business
- Our service guarantee. If we don’t achieve our agreed upon goal, a portion of your fee will be returned.
- You receive priority claims response. This keeps claim costs at a minimum.
We at ALIGNED Insurance offer customized insurance to each of our commercial insurance customers. Peace of mind is important. And that’s what our experienced brokers deliver each day to our clients across Canada.
Our team will work with you on the specific details and unique circumstances of your probate bond needs and deliver value and quality.
A lot of responsibilities lie on the executor to administer the estate’s assets in a way that best serves it’s beneficiaries. Probate bonds, like other types of bonds, provide a financial guarantee for the estate’s assets and beneficiaries in the event of improper administration.
Supporting our clients is what we do. To sum up, we invite you to speak to one of our ALIGNED Insurance brokers about your specific bond needs.