There are some circumstances where the court will require an estate trustee to post an administrative bond. For instance, if the trustee does not live in the same province as where the deceased lived, or if a person dies without a valid will.
An administrative bond is a form of security that protects the estate and the beneficiaries while the trustee handles the distribution of the estate.
The administrative bond is posted with the Superior Court of Justice, and is usually twice the value of the estate. It can be provided by an insurance company that is licenced to issue bonds of this kind. The information needed to apply for the bond includes an inventory of the estate, a net worth statement for the deceased, and a copy of the will.
In some cases, an estate trustee may apply to the court to dispense with an administration bond. This can be a complicated process, but if the court is satisfied that the estate is sufficiently protected, and the beneficiaries are in agreement, then it may order that a bond is not required.
For more information about administrative bonds, contact our Estate Law Group.