[WSBAPT] Logistics of PR bonds in estate planning

[Nicholas Pleasants]

Bond rates will go down the larger the bond is. Here is Spino Bonding’s published rates for example. https://www.webondu.com/bond-rates
But keep in mind that these are annual premiums. At that size of an estate, the administration is going to take several years to get the Estate Tax Return prepared, submitted, and wait for approval or questions from DOR. So in that sense, the bond fee could end up being higher if they have to renew multiple times.
If they are going to burn through $20,000+ on bonding, maybe it would be easier to have a trust company handle the whole administration instead? Posting a bond seems like an unnecessary expense.
Best,
Nick
Nicholas Pleasants
Owner

[(Logo) Pleasants Law Firm]<http://www.pleasantslaw.com/>

Pleasants Law Firm, P.S.
2300 130th Ave NE, Suite A-101
Bellevue, WA 98005-1755
(425) 615-7070 tel/fax
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Ronda Larson Kramer <ronda at larsonlawpllc.com>
Date: Sunday, February 27, 2022 at 8:57 PM
To: wsbapt at lists.wsbarppt.com <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Logistics of PR bonds in estate planning
Hi Listmates,

Clients with an estate over $5 million want their wills to require an executor bond (the PR is a WA resident but successor PR is not). I assume it’s fine to simply say in the will “My PR shall post bond.” Or does the will need to give some information as to how much of the estate they want covered by the bond?

I also want to educate clients of the potential burden they are imposing on their PR. What my research found is that typically, the cost for an Executor Bond is approximately 0.5% of the bond amount.  There is a sliding scale for bonds that are in excess of $500,000. How much will the bond end up being? Does the court decide how much the bond will be at probate? Is a bond supposed to cover the whole estate? Or is it up to clients to say in the will how much of their estate they want the bond to cover?

0.5% of $2.5 million is $12,500. So conceivably, their PR would have to pay $12K to be the fiduciary.

Thanks.

Ronda Larson Kramer
J.D., LL.M. Taxation, Owner

LARSON LAW, PLLC
Elder Law, Estate Planning
P.O. Box 7337
Olympia WA 98507
Ph: 360-768-0775
ronda at larsonlawpllc.com<mailto:ronda at larsonlawpllc.com>
www.larsonlawpllc.com<http://www.larsonlawpllc.com/>

NOTICES: This message, including attachments, is confidential and may contain information protected by the attorney-client privilege or work product doctrine. If you are not the addressee, any disclosure, copying, distribution, or use of the contents of this message are prohibited. If you have received this email in error, please destroy it and notify me immediately. Any tax advice contained in this message is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the internal revenue code or (2) promoting, marketing, or recommending to others any tax-related matter(s) addressed here.

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