By Cole Friyia , Surety Account Executive, Estatesearch
In Canada executors of the estate of a deceased person are mandated by the Government to take out an Estate Bond, also known as a Fiduciary Bond or Probate Bond. This is insurance that protects assets within the estate from any wrong doing by the executor, deliberate or otherwise. This bond is held by the courts and ensures the appointed person (executor) will manage the deceased’s legal and financial affairs in accordance with the law.
The Role of Estate Bonds in Canada
Every intestate case (representing about 50% of probates) and all other more complex probate cases, with only a few exceptions due to special circumstances, will require the executor to apply for an Estate Bond. Notably, bonds are only granted subject to financial qualification of the executor, meaning if the executor does not qualify they may not be granted a bond and so will be unable to proceed with administration. In this situation other family members may qualify for the Estate Bond and can be put forward on an application but coming up with an appropriate solution can be challenging and time-consuming for legal teams working on probate matters. It can also be stressful for executors who are dealing with grief over losing a loved one.
Legal firms quite rightly use insurance brokers to help them find the best option for the executor. However, probate and Estate Bonds are a complicated subject. The above is a simplified explanation but there may also be Waivers to consider, Foreign Executor Bonds or Guardianship Bonds to throw into the mix. In Canada, a significant majority of insurance bonds are tied to construction projects so brokers are not usually specialists in this field, and so less experienced in the various intricacies of Estate Bonds where the process is completely different.
By selecting a non-specialist broker the result is a variable service at best. If not administered correctly from the outset, delays will result. This can slow estate administration and add further stress for executors at an already difficult time.
Simplifying the Estate Bond Process
The options for brokers have traditionally been limited. To help address this, Estatesearch has partnered with Experia Insurance Group, specialists in estate administration insurance and Estate Bonds. This partnership provides a dedicated brokerage service for both legal teams and lay executors, ensuring an efficient process that helps prevent delays and secures the best rates on Estate Bonds.
We also assist in cases where financial qualification may be a challenge, working to find suitable family members who can meet the requirements and facilitate the granting of Estate Bonds.
Our goal is to smooth a complicated process. We simply require a completed bond application form and personal net worth statement, application of appointment/probate, scanned death certificate and proof of assets and liabilities for both the estate and executor. We check this bundle of information and clarify any points before applying to insurance companies to find the best policy. Because we are domiciled in Canada and deal with insurance companies and legal teams on a daily basis we know the industry inside and out. We know what information to provide so we only need to ask for it once at the start, saving lawyers’ time and protecting them from any professional exposure. We also assist with collection of premiums and arranging renewals, providing peace of mind that all the details relating to the Estate Bond are taken care of properly.
Estatesearch now offers a modern solution to the age old problem of Estate Bonds.