A bond is required to accompany any application for a Certificate of Appointment of Estate Trustee, formally known as probate, when there is no Will or if there is a Will when the person applying to be appointed as estate trustee was not named as an Estate Trustee of the Will, or where the applicant neither lives in Canada, or a country that is a member of the Commonwealth. So an Estate Trustee (aka an executor) who lives in Malta as an example, does not need a bond, but your Uncle in Buffalo does. This is set out in the Estates Act, Section 6. Experienced Wills and Probate have to deal with this complication frequently.
Generally, bonds are obtained from insurance companies and there are a limited number of them that will issue a bond. There is a significant premium, and you have to qualify. The purpose of the bond, which generates an expensive premium, is to guarantee that the estate trustee appointed by the court will not abuse or run off with the estates’ assets. The court has the ability to dispense with the necessity of a bond, but that can require a relatively expensive court application. The law on this can be found in The Estates Act section 35 and Rule 74.11 of the Rules of Civil Procedure. The cost of a bond will vary depending on the size of the estate. If the estate is worth less than half a million dollars, the bond premium can be anticipated at between 1.5% and 2% of the estates’ value. If the estate is worth half a million dollars, you can expect a premium of 1% to 2% in the estates’ value, and if the estate exceeds one million in value, the bond premium will be somewhere in the region of 1% to 1.5%. The bonding company will want a great deal of information about the applicant, all directed towards the financial responsibility and liquidity of the applicant. As Will and Estate Lawyers we can assist in negotiating these bonds or drafting a motion for the court to dispense with the bond. The consent of all beneficiaries is generally required, but in the case of a minor beneficiary that is not a enough. In the case of a minor beneficiary (ie under the age of 18) the Office of the Children’s Lawyer must become involved. This now moves to the realm of Estate Lawyers, who have experience in Estate Litigation.
