In probate applications, bond is a very important concept. If the Court requires the applicant applying to be the estate trustee to post bond, then it’s definitely bad news for them. Not only is the bond application process very difficult, the bond company will also charge a big amount of money – such as 1-2% of twice the estate value.
Moreover, the estate trustee must shoulder this cost themselves first, because how probate works is:
- You cannot touch the estate money until a certificate of application for estate trustee (“certificate”) is issued;
- But you cannot get the certificate unless you secured bond and paid the fees.
As well, it’s not always the case that the estate trustee can recover the bond money from the estate – that depends on whether the bond benefits the estate or just the estate trustee.
Of course, the best way is to avoid the bond application altogether. Today, based on our probate application experience, we will share three ways to prevent a bond requirement:
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Write a Will
Writing a valid Will is the easiest and most affordable way to avoid a bond requirement. It’s important to explicitly state in the Will that the estate trustee is not required to post bond.
When doing your estate planning at Varity Law, we will also include a statement of assets and debts for the deceased (in addition to the Will). This document makes the estate distribution much, much easier (you actually know what the assets are and where to find them!) and can be updated by the testator any time themselves.
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The Estate Trustee Resides in the Same Place as the Deceased
The estate distribution process on averages takes 1 year, and some may take much longer (especially if the estate trustee must figure out what are the assets and debts). During this process, the estate trustee needs to handle many affairs in person, such as setting up an estate account at the bank. Thus, the Court prefers if the executor is an ordinary resident of the same place where the deceased passed away.
But this can be very difficult for people whose family members are abroad. If they are not ordinary residents and there is no will, it’s very unlikely they can get probate done without the Court requiring a bond. Hence, we always suggest the testator to choose an executor who resides in the same place.
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No disputes to the Estate and All Beneficiaries are Adults
When there is a valid Will, usually there won’t be successful claims against the estate. For the most part, the Court must honour the deceased’s wishes (exceptions include matrimonial home).
Alternatively, even if there is no Will, if everyone is on board, then the estate can also be settled quite smoothly. It would be extremely helpful if everyone can sign in consent to the executor appointment. Sometimes it is necessary for certain family members to sign renunciations, if they have a prior or equal right to the executor applicant according to relevant legislations.
In the absence of a Will, the legislation favours the following people: first married spouses, then children, then parents, then brothers & sisters or their children. Unfortunately, friends or other people not related to the deceased by blood or marriage are not regarded as valid beneficiaries and can only apply to be an executor if all other family members agree or are no longer here.
If the beneficiaries are under the age of majority (currently 18 in Canada), then it’s also problematic. As they cannot hold certain types of assets, such as bank account or real estate until they reach a certain age, another designated person, called Attorney for Property must do so for them. In this situation, to guard against the possibility that the attorney for property may take the estate funds and run, Court will likely require a bond. Of course, this situation is once again alleviated if there is a Will, because the Court will prioritize the deceased’s wishes.
Conclusion
Due to the reasons above, probate is usually a painful and long process for many people. But if you can do proper estate planning beforehand, then you can avoid much of the expenses and the agony, allowing the beneficiaries to receive their inheritance successfully and easily.
Of course, if you are already in a pickle and there was no Will, you can still hire an experienced probate legal team to overcome those difficulties.
Kindly note that this article offers general legal information, not specific legal advice pertaining to your situation. If you have specific questions, please book a first free consultation with us here: https://calendly.com/sabrina-668/1stfreeconsult
