Nebraska Personal Representative Bond: A Comprehensive Guide

December 28, 2022

Nebraska Personal Representative Bond

This guide provides information for insurance agents to help their customers obtain a Nebraska 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: Certain personal representatives handling the estates of deceased Nebraska residents or property owners
  • Purpose: To ensure estate beneficiaries and creditors receive compensation if the personal representative fails to fulfill their fiduciary duties
  • Who Regulates Personal Representatives in Nebraska: The county court with jurisdiction over where the deceased individual resided or had property

Background

Nebraska Statute 30-2403 requires all personal representatives of an estate to be appointed by a court before assuming their fiduciary duties. The Nebraska 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 Nebraska Personal Representative Bond?

Nebraska 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 Nebraska Statute 30-2449. Specifically, the bond protects beneficiaries and creditors if the personal representative engages in fraud or fails to properly distribute 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.

Nebraska Personal Representative Bond Form
Nebraska Personal Representative Bond Form

How Can an Insurance Agent Obtain a Nebraska Personal Representative Surety Bond?

BondExchange makes obtaining a Nebraska 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.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Nebraska Statute 30-2447 dictates that the bond amount must be equal to the personal representative’s best estimate of the estate’s personal property plus the income expected to be generated by the estate’s personal and real property during the next year. The court may increase or reduce the required bond amount whenever they see fit.

What are the Underwriting Requirements for the Nebraska Personal Representative Bond?

Most surety companies will examine the following factors when determining eligibility for the Nebraska 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 Nebraska 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 Nebraska Personal Representative bond:

$1,500,000 Personal Representative Bond Cost

Bond Amount Premium Rate Total Bond Cost
First $20,000 0.75% $150
Next $40,000 0.60% $240
Next $140,000 0.50% $700
Next $300,000 0.375% $1,125
Next $1,000,000 0.25% $2,500
Total cost of $4,715

Who is Required to Purchase the Nebraska Personal Representative Bond?

Nebraska requires personal representatives to purchase a surety bond as a prerequisite to obtaining a fiduciary appointment. To paraphrase Nebraska Statute 30-2209, a personal representative is a court-appointed fiduciary responsible for administering a deceased individual’s estate. Personal representatives are called executors if the deceased individual nominated them in their will (testate) and administrators if they were not nominated or if no will exists (intestate). Additionally, a special administrator is a temporary personal representative appointed in emergency situations or until a general personal representative is appointed.

Personal representatives are not required to purchase a bond if:

  • The will explicitly waives the bond requirement
  • All estate beneficiaries agree to waive the bond requirement
  • They are a bank or trust company
  • The estate is a small estate as defined in Nebraska Statute 30-24,127
  • The court determines a bond is not necessary

The court may at any time require an otherwise exempt personal representative to purchase a bond upon the request of a person with an interest in the estate.

How do Personal Representatives Become Appointed in Nebraska?

Personal representatives in Nebraska must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to Nebraska’s probate code for details on the process.

Step 1 – Meet the Qualifications

Personal representatives are ineligible for appointment if they are:

    • Under 19 years old
    • Found unsuitable by the court during formal proceedings

Step 2 – Determine Priority

Priority for appointment as a personal representative is granted in the following order:

    • Executors nominated in the will or any person(s) they nominate (if nominating power is conferred in the will)
    • The surviving spouse, provided they are a devisee (entitled to real estate) of the estate
    • Any other devisee
    • The surviving spouse
    • Any other heir
    • Any creditor, provided the deceased individual has been dead for at least 45 days

Someone with priority may nominate another qualified person to serve in their place. If an objection to the appointment of a specific personal representative is made in formal testacy, then the order of priority outlined above still stands, except in the following situations:

    • The court may appoint any qualified person if the estate seems capable of meeting exemptions and costs of administration but incapable of discharging unsecured claims and any creditor petitions them to do so
    • If any estate beneficiary objects to an appointment (other than for a person nominated in the will), the court may appoint a person that is acceptable to all devisees and is entitled to more than half the distributable value of the estate, or in the absence of such a person, any qualified person.

When two or more persons share priority, one (or more if more than two people share priority) must either renounce their right to administer the estate, or all must agree on someone to nominate.

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 – Determine the Estate Administration Type

Nebraska has four distinct estate administration types, as outlined below:

    • Informal Probate: The personal representative can administer the estate with minimal court supervision.
    • Formal Testacy: Litigation to determine the validity of a will and/or the appointment of a personal representative. Formal testacy starts when an interested person petitions the court to commence it.
    • Supervised: The personal representative is under the direct supervision of the court when administering the estate. Supervised administration can be requested by any interested person, including the personal representative.
    • Small: A much simpler process where the estate’s property may be distributed via an affidavit. Small estate administration is available to estates that meet the criteria outlined in Nebraska Statute 30-24,127.

Step 5 – Contact the Court

Personal representatives must contact the county court with jurisdiction over the deceased individual’s estate. An employee 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 6 – Purchase a Surety Bond

Unless otherwise exempt, personal representatives must purchase and maintain a surety bond (limits outlined above).

How do Nebraska Personal Representatives File Their Bonds?

Personal representatives should submit their completed bond forms, including the power of attorney, to the county court with jurisdiction over the estate.

The surety bond requires signatures from the company that issues the bond and the personal representative. 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
  • Court where the bond will be filed
  • Bond amount
  • Name of the deceased individual
  • Date the bond is signed

What can Nebraska Personal Representatives do to Avoid Claims Made Against Their Bonds?

To avoid claims against their bonds, personal representatives in Nebraska must ensure that they:

  • Properly distribute the estate’s assets
  • Do not commit fraud
  • Fulfill their fiduciary duties