Kentucky Personal Representative Bond: A Comprehensive Guide
October 28, 2022
This guide provides information for insurance agents to help their customers obtain a Kentucky Personal Representative 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 personal representatives handling the estates of deceased Kentucky residents or property owners
- Purpose: To ensure estate beneficiaries and creditors receive compensation if the personal representative mishandles the estate’s assets
- Who Regulates Personal Representatives in Kentucky: The district court of the county with jurisdiction over where the deceased individual resided or had property
Kentucky Statute 395.105 requires all personal representatives of an estate to be appointed by a court before assuming their fiduciary duties. The Kentucky legislature enacted the appointment requirement to ensure that personal representatives do not mismanage the estate’s assets. To provide financial security for the enforcement of this requirement, the court may require the personal representative to purchase a probate surety bond to be eligible for appointment.
What is the Purpose of the Kentucky Personal Representative Bond?
Kentucky requires personal representatives 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 personal representative fails to abide by the regulations outlined in Kentucky Statute 395.001 et seq. Specifically, the bond protects beneficiaries and creditors if the personal representative engages in 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 personal representative violates their fiduciary duties.
How Can an Insurance Agent Obtain a Kentucky Personal Representative Surety Bond?
BondExchange makes obtaining a Kentucky Personal Representative bond easy. Simply login to your account and use our keyword search to find the “Probate” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
Kentucky Statute 395.130 grants the court the authority to determine the required bond amount on a case-by-case basis. The court will seek to set the bond in an amount that adequately protects the interests of all of the estate’s beneficiaries and creditors. Any interested person, including the personal representative, may petition the court to reduce the required amount.
What are the Underwriting Requirements for the Kentucky Personal Representative Bond?
Most surety companies will examine the following factors when determining eligibility for the Kentucky Personal Representative bond:
- Personal representative’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 personal representative is replacing a prior fiduciary
- If the personal representative 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 Kentucky Personal Representative Bond Cost?
Surety companies typically determine the premium rate for personal representative 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 Kentucky Personal Representative bond:
$1,500,000 Personal Representative Bond Cost
|Bond Amount||Premium Rate||Total Bond Cost|
|Total cost of $4,715|
Who is Required to Purchase the Kentucky Personal Representative Bond?
Kentucky requires personal representatives to purchase a surety bond as a prerequisite to obtaining a fiduciary appointment. To paraphrase Kentucky Statute 395.001, a personal representative is a court-appointed fiduciary responsible for administering a deceased individual’s estate. Personal representatives are referred to as executors if the deceased individual nominated them in their will (testate), and administrators if they were not nominated if no will exists (intestate).
Personal representatives are not required to purchase a bond if:
- They are a bank or trust company
- The will explicitly waives the bond requirement
- An interested person petitions the court to waive the bond requirement and the court finds their petition valid
How do Personal Representatives Become Appointed in Kentucky?
Personal representatives in Kentucky must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to Kentucky Statutes Chapters 394 and 395 as well as the state’s guide to probate procedures for details on the process.
Step 1 – Meet the Qualifications
The following persons are eligible for appointment as a personal representative:
- Kentucky residents over the age of 18 (minors may be appointed in the circumstances outlined in Kentucky Statute 395.080
- Banks and trust companies authorized to act as fiduciaries
- Nonresident adults that are related to the deceased individual
Step 2 – Determine Priority
Priority for appointment as a personal representative is granted in the following order:
- Persons nominated in the will
- The surviving spouse or person nominated by them
- Any other estate beneficiary
- Any person deemed suitable by the court
Step 3 – Hire an Attorney
Although not explicitly required, it is highly recommended that personal representatives hire an attorney to assist with the probate process.
Step 4 – Contact the Court
Personal representatives must contact the district court of the county with jurisdiction over the deceased individual’s estate. A representative of the court will walk the personal representative 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, personal representatives must purchase and maintain a surety bond (limits outlined above).
How do Kentucky Personal Representatives File Their Bonds?
Personal representatives should submit their completed bond forms, including the power of attorney, to the district court of the county with jurisdiction over the estate.
The surety bond requires signatures from the company that issues the bond, the personal representative, and their attorney (if applicable). The surety company should include the following information on the bond form:
- Court where the bond is to be filed
- Name and address of the deceased individual
- Date the personal representative was appointed
- Bond amount
- Legal name and address of the entity/individual(s) buying the bond
- Surety company’s name and address
- Date the bond is signed
What can Kentucky Personal Representatives do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, personal representatives in Kentucky must ensure that they:
- Do not engage in any acts of fraud
- Do not mismanage the estate’s assets
- Fulfill their fiduciary duties