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June 20, 2025

Administration Bonds

Administration Bonds

by admin / Thursday, 21 June 2018 / Published in General

What is an Administration Bond?

 An administration bond is a promise to pay under specified circumstances, undertaken by a prospective estate trustee, to protect the interests of the beneficiaries and creditors if the estate trustee misappropriates assets of the estate or otherwise perpetuates a fraud on the estate. The bond is obtained from a surety (usually an insurance company) and the bond certificate is filed with the court. The amount of the administration bond that must be posted varies but can be double the value of the assets listed in the application for probate.

 When is a Bond Required?

 The court will require a bond to be posted before it will issue the Certificate of Appointment (probate):

  • If the executor named in the Will resides outside of Ontario;
  • If a person dies with a Will but neglects to appoint an executor or the appointment fails in the Will; or
  • If a person dies without a Will.

 Can a Bond be Reduced or Dispensed by Court?

 In some cases, the court will consider a request to dispense or reduce the amount post but it will depend on the circumstances.

 The information the court needs to do so includes:

  • the name of beneficiaries, including minors or incapable person’s and if any the value of the interest;
  • signed consents from all beneficiaries to the appointment of the applicant as estate trustee and to an order dispensing with the bond;
  • the last occupation of the deceased;
  • evidence as to whether all the debts of the deceased have been paid, including any obligations under support agreements or orders;
  • evidence as to whether the deceased operated a business at the time of death and, if the deceased did, whether any debts of that business have been or may be claimed against the estate, and a description of each debt and its amount; and
  • if all the debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt – amount and name of the creditor – and an explanation of what arrangements have been made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.

If all the debts are essentially paid and/or the judge is satisfied the beneficiaries and creditors will be protected, the court may issue an order to dispense with an administration bond, as long as the beneficiaries have consented to the proposed order.

Final Thoughts

Ultimately bonds are all about protecting the beneficiaries and creditors. If a judge is satisfied that the beneficiaries are protected, they will more likely than not grant the order dispensing with the bond.

In the correct set of circumstances, it may be worth taking the step to dispense with the rather than burdening the estate with the annual premium for the bond which can run into thousands of dollars.

If you have questions about estate administration, contact Sweatman Law. We represent executors and beneficiaries in all types of estate matters. We will work diligently to protect your interests, thoroughly explain your legal options and provide you with knowledgeable advice. To schedule an appointment with one of our lawyers, contact Sweatman Law Firm.  

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