What is an Estate Surety Bond?
Surety Bonds are commonly used during an executor’s estate administration or in the management of someone’s property by a legal guardian.
In the case of estate administration, a surety bond has the purpose of protecting the beneficiaries and creditors of the estate against improper distribution of assets by the executor. The bond guarantees that the executor will distribute the estate’s assets according to the Will or court judgement. These bonds can be required by the court for various reasons and if so determined, the executor will not be issued a probate certificate until it provides a bond.
Guardianship bonds protect minors or incapacitated people against the mismanagement of their property by a legal guardian. In order to become a legal guardian, one must make an application to a governing body such as the Public Guardian and Trustee or The Office of the Children’s Lawyer. A management plan is to be submitted and approved, and in some cases, these management plans are only approved subject to receiving a guardianship bond.
Surety bonds are issued by insurance companies and a simple application process is needed to qualify. One can view it as an extra layer of protection deemed prudent by the court system.