A bond, in the simplest terms, is a type of insurance policy designed to protect the assets of the estate in case of intentional or unintentional misuse by the personal representative (Executor or Administrator).
Do I Need A Bond? | Estate Planning in Raleigh NC
If a person dies without leaving a will (intestate) and the person qualifying as Administrator is a resident of North Carolina, then the requirement for a bond may be waived by all heirs except minors or incompetent adults, unless a bond is otherwise required by the Clerk of Court. When there are minor heirs or heirs that have been declared incompetent by a court, or heirs who otherwise are unable or unwilling to waive the bond, the person applying as Administrator will be required to post a bond. In the case of minor or incompetent adult heirs, the parent(s) or guardian(s) cannot waive the bond on behalf of the heir.
If the person applying as Administrator is not a resident of North Carolina, pursuant to North Carolina General Statute 28A-8-1, the bond cannot be waived by the heirs. In this case the applicant must first post a sufficient bond prior to or at the time of qualifying as the Administrator before the Clerk of Court.
The bond amount is calculated in accordance with the requirements of North Carolina law. The value of the bond will be slightly higher (1.25%) than the value of the personal property to protect any additional assets which may come into the hands of the Administrator at a later date. Eldreth Law Firm will be happy to take care of calculating the necessary value of the bond for you.
There are two types of bonds, property bonds and surety bond. Property bonds are more commonly used in criminal matters and may not be allowed by many Clerks of Court. A surety bond is most commonly used for estate and guardianship matters. If the estate matter remains open for more than one year, the surety company issuing the bond may require the premium to be paid once per year until the estate administration can be completed.
The Clerk of Court has broad powers in estate matters. The Clerk, at his or her discretion, may require a bond to be posted even if the bond requirement is waived by the heirs or even if there is a will which waives the bond.
Eldreth Law Firm PC | Estate Planning in Raleigh NC
We at Eldreth Law Firm PC will be happy to assist in obtaining waivers or the personal representative’s bond if applicable, or assist in obtaining the bond from a local and reliable bonding agent or surety company. We can also assist you with other needs in estate planning in Raleigh NC. Call now to schedule an appointment.
Note: If the applicant is unable to be bonded, he or she may not be allowed to qualify as Administrator of the estate.