Administration Bonds for Intestate Estates in Canada
When someone dies without a valid will, the court requires an administration bond before appointing an estate trustee.
This surety bond protects beneficiaries and creditors from financial loss if the administrator mismanages the estate.
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What is a Administration Bond?
An (Estate) administration bond is commonly issued when an administrator is appointed to handle the estate of somebody who died without a valid will (intestate). The bond protects the estate in the event an administrator mishandles the estate while guaranteeing those intended to receive money or property will be able to claim the full value of their inheritance.
The bond does not serve as protection for the administrator.
An administrator may also be appointed by the probate court if the named executor declines to take on the responsibility. The administrator will need to pay creditors, monthly bills, and discharge any taxes owed by the deceased while it is determined how the rest of the estate will be handled.
Administrator and executor bonds are often confused. The major difference between these two bonds is that the executor bond is issued where a valid will is present.
Administration bond may be requested for the following reasons:
- Deceased died intestate (without a will)
- The Executor named in the will is a non-resident of Ontario
- Beneficiaries include minor children
- The Executor named in the will is unable/unwilling to act as Executor Litigation
Eligibility Criteria
Administration with will annexed
Required when executor named in the will or those appointed are deceased or refuse to act as administrator(s) of the estate.
Administration de bonis non
Required when the named executor in the will dies, resigns, or is removed before completing the estate.
Administration pendent lite
Bond is required when the will is being contested.
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Frequently Asked Questions
You need one of these bonds if you are the administrator named to care for the estate of a deceased individual.
The cost of the bond will depend on the total value of the estate and the financial/credit profile of a nominee (principal).
An applicant will have to pay an annual premium. This premium is usually a set percentage of the total bond amount.
As an administrator, you will need to be working with an estate attorney. The bond issuer will ask for their information on the application.
You will need to provide your employment and income history. If the bond issuer finds you to be financially unsound, they may request your lawyer to sign or have a co-signer be included on the application.
You will need to provide the initial payment for the bond at the time of approval.
If you have an administrator bond issued in a different city or province, it will not carry over for the new bond.
If you live in a different province from where the deceased lived, you will need to apply for a foreign administrator bond.
If you are currently working on a different estate, you will need to provide that information when applying for the new bond.
A claim can be filed against the bond and against the administrator if they fail to follow the clear wishes of the estate or mishandle the funds that result in a loss of value of the estate.
By taking out the bond, the administrator is making a promise to execute their duties as administrator faithfully and responsibly.
You can apply for the bond via a bonding company (Surety) with the assistance of a broker at Ai Insurance Organization.
Ai Insurance Organization is recognized in all provinces across Canada to issue Administration Bonds.
Estate Bond Program for Lawyers
If you are an estate lawyer and would like to refer your clients, learn more about our program below:
Ai provides value not only to our clients but to our trusted partners in private, public, and legal practices. We are committed to offering our customers and their representation the highest possible standards of service the bonding industry has to offer.
We believe in organically growing our network of business affiliates to assist and provide financial surety to lawyers across Canada and abroad.
Contact us by filling out the form below if your client requires an estate bond, if you have any questions about the estate bonding process, or if you would like to become a centre of influence for your clients.
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