Florida Probate Statute 733.406: Bond Premium Allowable as Expense of Administration
The personal representative is the person, bank, savings and loan, or trust company appointed by the probate court judge to be responsible for the administration of a decedent’s probate estate. As a fiduciary, the personal representative must manage the decedent’s estate according to Florida law for the benefit of the beneficiaries or heirs. Because of the broad authority that personal representatives have over an estate, the law requires that they purchase bonds to protect the beneficiaries or heirs from their negligence or illegal acts. There are several rules related to the bond requirements, including the premium payments. If you would like to learn more about the bond requirement for personal representatives, including the requirements of Florida Statutes, section 733.406- Bond premium allowable as expense of administration, contact an experienced Fort Lauderdale estate administration lawyer at the Law Offices of Stephen Bilkis & Associates.Bond Requirement
Under the Florida Probate Code, every personal representative must file a bond with a surety. This means that as a condition of serving as personal representative, he (or she) must purchase special type of insurance policy from a surety company called a bond. As with any insurance policy, the insured—in this case the personal representative—must pay an annual premium to maintain the policy. If the probate proceeding extends beyond a year, the new premium will be due.
As an experienced Fort Lauderdale estate administration lawyer will explain, there are exceptions to the bond requirement. The court may decide to waive the bond requirement based on a petition from an interested party or on its own motion. In addition, bond is not requirement from corporate personal representatives.Cost of a Bond
The cost of the premium for a fiduciary bond depends on amount of coverage required. This will in turn depend on a number of factors including the value of the estate that the fiduciary must manage. To acquire the bond, the personal representative must pay a premium which is typically a percentage of the total bond amount. For example, for an estate with a value of $100,000, the bond premium might be between $1000-$3000 which is 1%-3% of the value of the estate.
Whatever the price of the premium under Florida Statutes, section 733.406- Bond premium allowable as expense of administration, the premium amount is an expense of administration. Thus, the personal representative can receive reimbursement from the estate, as long as the amount of the premium is reasonable. For questions related to the bond premium, contact an experienced estate administration attorney in Fort Lauderdale.Responsibilities of a Personal Administrator
The personal representative has a legal duty to administer the probate estate pursuant to Florida law and according to the terms of the decedent’s will, if any. The personal representative must:
- Identify, collect, appraise, value and safeguard the decedent’s probate assets.
- Defend the estate against improper claims, and pay only claims.
- File tax returns and pay any taxes due.
- Pay expenses of administering the probate estate.
- Pay statutory amounts to the decedent’s surviving spouse or family.
- Distribute probate assets to beneficiaries according to the terms of the will. In the absence of a will, distribute assets based on intestate succession rules
- Close the probate estate.
If the personal representative mismanages the decedent’s probate estate, the beneficiaries or heirs can file a claim with the surety.Related Statutory Provisions
- Bond of fiduciary; when required; form : § 733.402, Fla. Stat.
- Amount of bond : § 733.403, Fla. Stat.
- Liability of surety: § 733.404, Fla. Stat.
A personal representative or other fiduciary required to give bond shall pay the reasonable premium as an expense of administration.Contact the Law Offices of Stephen Bilkis & Associates
If you have questions about the bond requirement, including the requirements of Florida Statutes, section 733.406- Bond premium allowable as expense of administration, it is important that you discuss your concerns with an experienced estate administration attorney serving Fort Lauderdale. The attorneys at the Law Offices of Stephen Bilkis & Associates have over two decades of experience representing clients in matters related to fiduciary duties, probate, and estate administration and understand the rules of the Florida Probate Code. Contact us attorneys at 561-710-4000 to schedule a free, no obligation consultation regarding your case.