Choosing your will executor is a daunting, and somewhat morbid, task. You're essentially picking the person who will distribute your estate after you die. That's why there are many considerations that come into play.
But aside from choosing who your executor will be, there are other issues you may need to address as well -- such as, whether or not your executor needs to be bonded.
Why would your executor need to post a bond? And, is this required under the law?
Executor Bond Laws
Unfortunately, there isn't an easy answer. Probate and estate planning laws vary depending on your state. (You can find links to your state's laws by clicking here.)
Many states require that will executors post a bond before they carry out their duties. Some states specifically require bonds for out-of-state executors.
An executor bond (also sometimes called an estate bond, a fiduciary bond, or a probate bond) is meant to ensure that the executor doesn't end up defrauding the estate -- for example, by running off with all the assets.
In the event that the executor does take off with the money, the company that issued the bond will reimburse the estate. It will then pursue the executor for contribution.
Executor Bond Waivers
While this may sound prudent, a bond can be expensive, potentially running into the thousands of dollars for larger estates. Getting a bond can also take time, especially if the executor has to pursue a loan to secure the bond. The probate process could be significantly prolonged.
For these reasons, some will choose to waive the bond requirement if they trust their chosen executor. This can usually be done in a will. Some may also choose to waive the requirement because the executor is an heir.
In some states, even if you don't wave the executor bond requirement, your heirs can join together and waive the requirement after you pass on. If you're curious about bond requirements in your jurisdiction, you may want to consult an experienced estate planning attorney in your area. A lawyer will be able to answer any questions you have about executor or probate bonds.
- Is a Handwritten Will Legally Valid? (FindLaw's Law and Daily Life)
- Do Young People Need a Will? (FindLaw's Law and Daily Life)
- The FindLaw Guide to Writing a Will (FindLaw - Free Download)
- Get an Attorney-Drafted Will, and an Annual Will Review, With a Legal Plan From LegalStreet (LegalStreet.com)
(Disclosure: LegalStreet and FindLaw.com are owned by the same company.)