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The state of New Jersey has determined that a bond must be posted that represents the full value of the real and personal property in the Estate. The bond acts as a protection to the Estate to ensure that the assets are distributed properly. As administrator, you are required to collect and safeguard all of the assets of the Estate, pay the debts and taxes and turnover the balance of the Estate funds to the beneficiaries. As surety agents, we can issue a bond to you for the amount set by the Surrogate’s office.
A surety bond is not insurance. You are responsible for any losses which cause the surety to make payment on your behalf. The Indemnity Agreement is your promise to repay the surety.
Once you have been bonded, the Surrogate will issue certificates in order for you to begin the task of liquidating the estate of the deceased. These certificates show evidence of the authority of the administrator to act. They are necessary to accomplish certain tasks such as transferring real estate, stock accessing or closing bank accounts, etc.
The initial premium for the bond is due when the application is completed. Annual premiums are due each year until the estate is closed. Those annual bills will come directly from the bonding company or our agency.
Once the estate is liquidated, a document called a refunding bond and release must be utilized and signed by each beneficiary to the Estate, upon receipt of their share. As our office will need a copy of this acknowledged release, please mail two copies of the release(s) to the Surrogate with the required filing fee, and a return envelope. Once you receive your copy, you may then either fax or mail a copy of this release to our office in order to properly cancel the bond.
Please remember that the bond does not terminate at the end of the first year. If you do not notify the bonding company that the estate is closed, they will continue the bond and they will bill you each year for another premium.
Guardian bonds for minors are required when a person under the age of 18 receives money as an inheritance or proceeds from a lawsuit. The Guardian would post a bond and invest the monies themselves on behalf of the minor. If the minor owns any real property and the Guardian wishes to sell it, they must first obtain court permission. Likewise, if money is needed for care and support of the minor, a court order is usually required.
Guardian bonds for incapacitated persons are required when the court has determined that an individual is no longer competent to handle his or her own financial affairs. As guardian, you are entrusted with the management of the incompetent’s financial matters, paying any ongoing debts, medical bills, and conservation of capital.
Most larger bonds require the assistance of an attorney. The premiums for both administration and guardians bonds are based on the dollar amount set by the Surrogate.
Please call our office for any additional information or for premium quotation at 732 247 8664.
ADMINISTRATOR – (also known as Personal Representative): Person appointed by the court to manage and distribute the estate of a person who dies without a Will.
BENEFICIARY – Person named to receive property or benefits.
BEQUEATH – Gift or personal property by Will.
CODICIL -An addition or supplement made to delete or add provisions of a Will.
DECEDENT – A deceased person
DEVISE – Gift of real estate by Will.
ESTATE – Everything a person owns, all real and personal property.
EXECUTOR (also known as Personal Representative) – A person or institution named in the Will to carry out the provisions and directions of the Will.
HEIR– A person who is entitled by law or by the terms of a will to inherit the estate of another
INTESTATE – When a person dies without a valid Will.
PERSONAL PROPERTY – Intangible property; such as stocks, bonds, or bank accounts; and tangible property such as furniture, automobile, jewelry.
PROBATE – Official proof of the validity of a Will.
REAL PROPERTY – Land and buildings
TENANTS IN COMMON – Two or more persons owning individual interests in property.
TESTATOR – The person who makes a Will.
TRUST – Property owned and managed by one person for the benefit of another
TRUSTEE – Person or institution holding property in trust.
WILL – A legal declaration of the manner in which a person wishes his estate divided after death.