Corporate Surety vs. Personal Surety

[LeeCrawford]

I have a lot of questions. I am the executor dealing with what I deem as a relatively simple probate case in VT fo my father's estate. I did not think I would be required to be bonded. But I am. First of all, why? And second of all, on the form from the court it has 3 options:

The Court does not require any surety.
The Court requires a personal surety.
The Court requires a corporate surety.

The court checked the third option. Why? We are not a corporation. Or am I totally missing the mark?

Anyway, could someone please give a brief answer to why this surety is necessary, what it actually does and why corporate rather than personal?

And where do I get this done? I have looked at some applications for acquiring such bonding and it is just more complicated paperwork that I hoped could be avoided.

Thanks for any replies

[Riskwriter]

I can see why you would be confused.

1st- You would only need a bond as the executor of an estate if it is required by the court. The court has a right to waive the condition of a posted bond or not.

2nd- The court is referring to rather old language when referring to personal vs corporate surety. This is fact has nothing to do with you, but more the type of bonding company which would be posting a bond on your behalf. Personal surety, from what I know, either hardly or no longer exists. Currently only larger corporate sureties are writing bonds for clients.

If you can avoid getting a bond, it will obviously same you some time and money. Check with the court to see if it is a requirement.

[mrbond]

First, my condolences on your loss.
You should know that any surety, whether personal or corporate, is a guarantee that that you will do something. In this paticular case, the surety would be guaranteeing they following
]VT Probate regs
So you see, the court wants a guarantee that you will properly administer the estate.
A corporate surety is a company that charges for the guarantee, a personal surety is a person(s) who the court would accept as a guarantor. (almost like a cosignor). Personal sureties are rarely used anymore, especially in probate matters. If you are an out of state executor, the court will be much more likely to require a corporate bond.
As far as the procedure for getting a corporate bond is concerned, it shouldn't be difficult at all. Your attorney should know the bond agents in that county.

[executrix]

I am executrix for my mother's estate. I am also trustee for my 4 yr old neice. My MA lawyer (I am in NY, mother died on NY but held property in MA) tells me I need to be bonded to be trustee. The will specifically says I do not need to be bonded to be executrix, but there is no such statement about the trusteeship. I've never actually met the MA lawyer and do not have a lot of faith in him. The trust will be in the range of $100-200K.

How do I find out if I REALLY need a bond? And if I do, how do I go about getting one without going through the lawyer? Does one "shop" for a bond? What are fees based on? Any idea of a ballpark fee for such an ammount?

Thanks.

[Riskwriter]

Well, you should find out you if you are required to post a bond from your attorney, as he/she will be acclimated to the laws & statutes in the court. It could be difficult for you to find out yourself if you need to be bonded or not.

In my experience, we have found that most bonding companies are rather conservative writing this class of business. I am able to write court and guardianship bonds for almost all situations and are able to find bonding solutions for most cases.

If you are not happy with your attorney, find one you feel confident with. We pay them too much to do a so-so job!

[mrbond]

Executrix,
The court papers appointing you as Trustee would indicate if a bond is required and in what amount. If you don't have the papers, get them from your attorney. As Riskwriter said, if you are not comfortable with your attorney, find another, but make sure he/she knows probate law.

Yes, you can "shop" for a bond, but you will likely find little difference in pricing. The price is based on the bond amount that is set by the court and you will be required to carry that bond until the trust is dissolved. I would guess that the trust terminates when your neice reaches a certain age, typically beyond 18. Given that your neice is only 4, that may be quite a long time. Some sureties may require you to pay that premium up front for the whole term.