Alaska Personal Representative Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain an Alaska Personal Representative bond.
At a Glance:
- Lowest Cost: Calculated based on a tiered structure
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs it: Most personal representatives handling the estates of deceased Alaska residents or property owners
- Purpose: To ensure estate beneficiaries and creditors receive compensation if the personal representative mishandles the estate’s assets
- Who Regulates Personal Representatives in Alaska: The superior court of the judicial district where the deceased individual resided or had property
Background
Alaska Statute 13.16.245 et seq. requires all personal representatives of an estate to be appointed by a superior court before assuming their fiduciary duties. The Alaska legislature enacted the appointment requirement to ensure that personal representatives do not mismanage the estate’s assets. To provide financial security for the enforcement of this requirement, most personal representatives must purchase a probate surety bond to be eligible for appointment.
What is the Purpose of the Alaska Personal Representative Bond?
Alaska requires personal representatives to purchase a surety bond as a prerequisite to being appointed as a fiduciary over an estate’s assets. The bond ensures that the estate’s beneficiaries and creditors will receive compensation for financial harm if the personal representative fails to abide by the regulations outlined in Alaska Statute 13.16.270. Specifically, the bond protects beneficiaries and creditors if the personal representative fails to adhere to all court orders or mismanages the estate’s assets. In short, the bond is a type of insurance that protects the estate’s beneficiaries and creditors if the personal representative violates their fiduciary duties.
How Can an Insurance Agent Obtain an Alaska Personal Representative Surety Bond?
BondExchange makes obtaining an Alaska Personal Representative bond easy. Simply login to your account and use our keyword search to find the “Probate” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
Alaska Statute 13.16.260 requires the personal representative to estimate the estate’s total assets and income to be generated over the year. The bond amount must be equal to this estimation. Additionally, the same statute grants the court the authority to increase the required amount if the estimation is off or reduce it if the personal representative deposits any assets with a domestic financial institution.
What are the Underwriting Requirements for the Alaska Personal Representative Bond?
Most surety companies will examine the following factors when determining eligibility for the Alaska Personal Representative bond:
- Personal representative’s credit history (not considered for bonds with limits less than $25,000)
- Whether or not the estate has an attorney (not considered for bonds with limits less than $25,000)
- How long the fiduciary appointment is for
- Whether or not the personal representative is replacing a prior fiduciary
- If the personal representative has ever committed a felony
- If there are disputes among the estate’s beneficiaries
- Whether or not there is any ongoing business in the estate
- If the bond is being required by a creditor
How Much Does the Alaska Personal Representative Bond Cost?
Surety companies typically determine the premium rate for personal representative bonds based on a tiered structure. As a result, larger bond amounts will be charged a lower premium rate than smaller bonds.
The following table illustrates the pricing structure for the Alaska Personal Representative bond:
$1,500,000 Personal Representative Bond Cost
| Bond Amount | Premium Rate | Total Bond Cost |
|---|---|---|
| First $20,000 | 0.75% | $150 |
| Next $40,000 | 0.60% | $240 |
| Next $140,000 | 0.50% | $700 |
| Next $300,000 | 0.375% | $1,125 |
| Next $1,000,000 | 0.25% | $2,500 |
| Total cost of $4,715 |
Who is Required to Purchase the Bond?
Alaska requires personal representatives to purchase a surety bond as a prerequisite to becoming appointed as a fiduciary over an estate’s assets.
Personal representatives are not required to purchase a bond if:
- The deceased’s will explicitly waives the bond requirement
- The devisees or heirs file a written waiver of the bond requirement
- They are a qualified corporate fiduciary
- They have filed cash or collateral with a state agency to ensure they perform their duties
To paraphrase the Alaska Court System, a personal representative is a court-appointed fiduciary responsible for:
- Gathering the property of the deceased
- Notifying all creditors, heirs, and devisees
- Handling all relevant debts and taxes
- Wrapping up all final affairs oft he deceased
- Transfering the deceased’s property to all relevant parties
- Filing all documents required by the state government, federal government, or court
- Closing the probate after fulfilling all of their duties
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Personal Representatives Become Appointed in Alaska?
Personal representatives in Alaska must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to the Alaska Court System’s personal representative page for details on the process.
Step 1 – Meet the Qualifications
Alaska does not allow individuals younger than 19 years of age to act as personal representatives. Additionally, Alaska grants priority to persons seeking to act as personal representatives in the following order:
-
- Persons nominated in the will
- The deceased’s spouse if the will makes a gift to him/her
- Any person that receives a gift under the will
- The deceased’s spouse even if the will does not make a gift to him/her or if there is no will
- Any of the deceased’s heirs
- Any of the deceased’s creditors if it has been more than 45 days since their death
Step 2 – Hire an Attorney
Although not required, it is highly recommended that personal representatives hire an attorney to assist with the probate process.
Step 3 – Determine the Estate Case Type
Alaska has three different types of estate cases, each containing different processes for handling a deceased individual’s estate. Below are the different estate case types in Alaska:
-
- Small Estate: Allows personal representatives to transfer the deceased’s property to devisees or heirs and is required for estates where the total assets (minus liens and debts) are less than the:
- Homestead allowance
- Family allowance
- Exempt property
- Probate costs
- Funeral costs
- Medical costs of the deceased’s last illness
- Informal Probate: Allows personal representatives to transfer the deceased’s property with minimum court supervision and is required if:
- It has been three years or less since the person died
- The original will is available, and the most current will cancels all prior wills
- If no will is available, all interested persons agree on who will be the personal representatives
- The personal representative has priority
- No one has objected to the informal probate process or who will be appointed as a personal representative
- Formal Probate: The court closely supervises the transfer of the deceased’s property and is required if:
- A personal representative that does not have priority is seeking an appointment
- There is no original will or if the will is not self-proved
- The deceased made more than one will but the latest will does not cancel out earlier versions
- It has been more than three years since the person died
- There is an objection to the personal representative’s appointment
- There is a request for the personal representative to be supervised
- There is a desire to stop informal probate and change it to a formal one
- There is a challenge to the will
- Small Estate: Allows personal representatives to transfer the deceased’s property to devisees or heirs and is required for estates where the total assets (minus liens and debts) are less than the:
Step 4 – Complete the Application
All Alaska personal representative applications should be filed with the superior court that has jurisdiction over the estate. Personal representatives must file specific applications corresponding to the estate case type and whether or not the deceased left a will, as outlined below:
Small Estate and Informal Probate:
Formal Probate:
All additional forms required at any point during the probate process can be found here.
Step 5 – Purchase a Surety Bond
Most personal representatives must purchase and maintain a surety bond (limits outlined above).
How do Alaska Personal Representatives File Their Bonds?
Personal representatives should submit their completed bond forms, including the power of attorney, to the superior court with jurisdiction over the estate.
The surety bond requires signatures from both the surety company that issues the bond and from the applicant. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Superior court’s judicial district
- Name of the deceased
- Date the bond is signed
What can Alaska Personal Representatives do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, personal representatives in Alaska must ensure that they:
- Perform all of their fiduciary duties
- Obey all court orders
- Do not mismanage the estate’s assets
