Delaware Executor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Delaware Executor bond.
At a Glance:
- Average Cost: Calculated based on a tiered structure
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs it: Most executors and administrators handling the estates of deceased Delaware residents or property owners
- Purpose: To ensure estate beneficiaries and creditors receive compensation if the executor or administrator mishandles the estate’s assets
- Who Regulates Executors and Administrators in Delaware: The Register of Wills of the county with jurisdiction over where the deceased individual resided or had property
Delaware Statute 1501 requires all executors and administrators, also known as personal representatives, of an estate to be appointed by a court before assuming their fiduciary duties. The Delaware legislature enacted the appointment requirement to ensure that executors and administrators do not mismanage the estate’s assets. To provide financial security for the enforcement of this requirement, most executors and administrators must purchase a probate surety bond to be eligible for appointment.
What is the Purpose of the Delaware Executor Bond?
Delaware requires executors and administrators to purchase a surety bond as a prerequisite to being appointed as a fiduciary over an estate’s assets. The bond ensures that the estate’s beneficiaries and creditors will receive compensation for financial harm if the executor/administrator fails to abide by the regulations outlined in Delaware Statute 1525. Specifically, the bond protects beneficiaries and creditors if the executor/administrator commits any acts of fraud or mismanages the estate’s assets. In short, the bond is a type of insurance that protects the estate’s beneficiaries and creditors if the executor or administrator violates their fiduciary duties.
How Can an Insurance Agent Obtain a Delaware Executor Surety Bond?
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How is the Bond Amount Determined?
Delaware Statute 1523 dictates that the bond amount must be set by the Register of Wills in an amount equal to the estimated value of the estate’s personal property. However, any interested person may petition the Court of Chancery to increase or reduce the required bond amount.
What are the Underwriting Requirements for the Delaware Executor Bond?
Most surety companies will examine the following factors when determining eligibility for the Delaware Executor bond:
- Fiduciary’s credit history (not considered for bonds with limits less than $25,000)
- Whether or not the estate has an attorney (not considered for bonds with limits less than $25,000)
- How long the fiduciary appointment is for
- Whether or not the executor/administrator is replacing a prior fiduciary
- If the fiduciary has ever committed a felony
- If there are disputes among the estate’s beneficiaries
- Whether or not there is any ongoing business in the estate
- If the bond is being required by a creditor
How Much Does the Delaware Executor Bond Cost?
Surety companies typically determine the premium rate for executor bonds based on a tiered structure. As a result, larger bond amounts will be charged a lower premium rate than smaller bonds.
The following table illustrates the pricing structure for the Delaware Executor bond:
$1,500,000 Executor Bond Cost
|Bond Amount||Premium Rate||Total Bond Cost|
|Total cost of $4,715|
Who is Required to Purchase the Connecticut Executor Bond?
Delaware requires executors and administrators of an estate to purchase a surety bond in the following situations:
- The will explicitly requires a bond be purchased
- Any person or creditor with an interest in the estate of at least $2,000 petitions the Court of Chancery to require a bond
To paraphrase Delaware Statute 101, an executor is a person nominated in the deceased individual’s will to administer their estate. Likewise, an administrator is responsible for administering the estate of a deceased individual who either did not nominate them in their will or died without one.
How do Executors and Administrators Become Appointed in Delaware?
Executors and administrators in Delaware must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to Delaware’s probate statutes for details on the process.
Step 1 – Meet the Qualifications
No person may be appointed as an executor or administrator that:
- Is under the age of 18
- Is deemed mentally incapacitated
- Has been convicted of a crime which disqualifies them from taking an oath
Step 2 – Determine Priority
Priority for appointment as an executor or administrator shall be granted in the following order:
- Persons nominated in the will
- Surviving spouse
- Children of the deceased individual
- Deceased individual’s parents
- Deceased individual’s siblings
- Persons nominated by the family of the deceased individual
- Any person the Register of Wills deems fit
Step 3 – Hire an Attorney
Although not explicitly required, it is highly recommended that executors and administrators hire an attorney to assist with the probate process.
Step 4 – Contact the Register of Courts
Qualified persons with priority must petition the Register of Deeds of the county with jurisdiction over the estate to obtain their appointment. The Register of Wills will walk the executor/administrator through the appointment process, provide them with all required forms, and answer any questions they may have.
Step 5 – Purchase a Surety Bond
Unless otherwise exempt, executors and administrators must purchase a surety bond (limits outlined above).
How do Delaware Executors and Administrators File Their Bonds?
Executors and administrators should submit their completed bond forms, including the power of attorney, to the probate court of the district with jurisdiction over the estate.
The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and the executor/administrator. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name
- Date the bond is signed
- Bond amount
- Name of the deceased individual
- Name of the county the Register of Wills oversees
- Date of appointment
- Date the executor/administrator will render an account of their administration activities
What can Delaware Executors and Administrators do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, executors and administrators in Delaware must ensure that they:
- Fulfill their fiduciary duties
- Do not engage in any acts of fraud
- Do not mismanage the estate’s assets
- File accurate reports on the administration of the estate