Illinois Probate Act 755 ILCS 5/12-5: Amount of Bond
When a loved one passes away, his (or her) estate must be settled during a process called administration. The person who manages the process of administration is referred to as the representative, but is commonly also referred to as the executor if there is not a will, or estate administrator if there is a will. Under the supervision of the Chicago area Illinois Probate Court that has supervision over the case, the representative will wind up the affairs of the decedent, and ultimately distribute his (or her) assets to his beneficiaries or heirs. Because of the great responsibility that a representative has and the access that he or she will have to the assets of the estate including money, personal property, and real estate, Illinois has strict requirements as to who may serve as representative as well as a bond requirement. If you were appointed to serve as the representative of a loved one's estate it is important that you work with an experienced Chicago estate administration lawyer who understands the requirements for serving as representative, including the requirements of Illinois Probate Act, section 12-5- Amount of bond.Bond Requirement
The court typically will require that anyone seeking to serve as a representative post a bond. Bond is a type of insurance that protects the estate from losses that result from the mistakes or misdeeds of the representative. A representative generally has broad access to the assets of an estate, including personal property, financial assets, and real estate. He (or she) typically takes control of estate assets, uses assets to pay debts, receives money owed to the estate, and ultimately distributes whatever assets remain in the estate to the decedent’s beneficiaries or heirs.
As a experienced Chicago estate administration attorney will explain, it is not uncommon for a representative to make mistakes in the handling of estate assets, resulting in financial loss to the estate. It is also not uncommon for a representative to breach his or her fiduciary duties, causing harm to the estate. To protect the estate, the law requires representatives to get insurance in the form of a bond. If the representative is not able to get a bond, then the court may decline to issue letters.
There are, however, the exceptions to the bond requirement. The statutory exceptions are in cases where the testator excused the bond requirement in the will, the representative is a corporation, or the estate is small.Amount of Bond
According to the Illinois Probate Act, section 12-5- Amount of bond, the basic determining factor as to the amount of the bond is the type of surety.
- Individual surety : If an individual issues the bond, the bond will be at least 2 times the value of the personal estate
- Surety company: If a surety company issues the bond, the bond will be at least 1.5 times the value of the personal estate.
However, there are factors which may cause the Probate Court to increase the amount of the surety. For example, the bond may be increased if the representative takes possession of the decedent’s real estate. The amount of the increase is up to the court. In addition, if the estate is expecting a settlement from a wrongful death or personal injury lawsuit and settlement money is to go to the representative, then the representative is required to get a bond that is either 1.5 or 2 times the amount of the funds, depending on whether the surety is an individual or a company. Any questions related to the bond requirement, including the amount should be directed to a skilled estate administration attorney in Chicago.Example
John left a vast estate. It included several homes, multiple vehicles, jewelry, and securities. There was also a significant amount of intellectual property that was part of his estate, as he was an inventory with multiple patents, and published over 20 books from which he received royalties. In his will, John left his property to several relatives, a few friends, and multiple charities. He named Big Trust Company to serve as the executor of his estate. I this situation there is no bond requirement since the representative is a corporation.Related Statutory Provisions
- Waiver or reduction of bond of representative of ward in certain cases : Illinois Probate Act, 755 ILCS 5/12-6
- Deposit in lieu or reduction of bond: Illinois Probate Act, 755 ILCS 5/12-7
- Joint or several bonds: Illinois Probate Act, 755 ILCS 5/12-8
- Additional bond for proceeds of sale or mortgage: Illinois Probate Act, 755 ILCS 5/12-9
- Further bond or security: Illinois Probate Act, 755 ILCS 5/12-10
(a) The bond of a representative shall be for an amount not less than double the value of the personal estate if individuals act as sureties or if bond or security is excused, and not less than 1 1/2 times the value of the personal estate if a surety company acts as surety. If the representative takes possession of the decedent's or ward's real estate, the bond shall be for such additional amount as the court determines, having regard to the income from the real estate.
(b) For the purpose of fixing the amount of the bond, a cause of action for wrongful death of the decedent or for personal injury to the ward is considered of the value of $500, but unless excused by the court from doing so, it is the duty of the representative to file in and have approved by the court a bond for an amount not less than double the amount likely to come into his hands as the proceeds of the judgment or settlement if individuals act as sureties and not less than 1 1/2 times the amount likely to come into his hands as the proceeds of the judgment or settlement if a surety company acts as surety.
If you are an executor or estate administrator and have questions or concerns related to the bond or surety requirements of the Illinois Probate Act, including the requirements of Illinois Probate Act, section 12-5- Amount of bond, an experienced estate administration attorney serving Chicago can help. The attorneys at the Law Offices of Stephen Bilkis & Associates have years of experience representing clients in estate matters before the Illinois Probate Court, including matters related to the appointment of a representative, the bond requirement, and the administration process. Contact an attorney in our office at 855-454-5529 to schedule a free, no obligation consultation regarding your case. We serve individuals throughout Chicago.