Oregon Personal Representative Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Oregon 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 Oregon 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 Oregon: The county court with jurisdiction over where the deceased individual resided or had property

Background

Oregon Statute 113.035 requires all personal representatives of an estate to be appointed by a court before assuming their fiduciary duties. The Oregon 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, the court may require a personal representative to purchase and maintain a probate surety bond to be eligible for appointment.

What is the Purpose of the Oregon Personal Representative Bond?

Oregon 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 Oregon Statute 113.105. Specifically, the bond protects beneficiaries and creditors if the personal representative 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 Oregon Personal Representative Surety Bond?

BondExchange makes obtaining an Oregon 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?

Oregon Statute 113.105 grants the county court the authority to determine the required bond amount on a case-by-case basis. However, the court must consider the following factors when making its determination:

• The nature, value, and liquidity of the estate’s assets
• The anticipated income the estate will generate during its administration
• The estate’s probable indebtedness and taxes

Additionally, Oregon Statute 113.115 states that the court may increase or reduce the required bond amount at their discretion.

What are the Underwriting Requirements for the Oregon Personal Representative Bond?

Most surety companies will examine the following factors when determining eligibility for the Oregon 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 Oregon 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 Oregon Personal Representative bond:

$1,500,000 Personal Representative Bond Cost

Who is Required to Purchase the Oregon Personal Representative Bond?

Oregon requires personal representatives to purchase a surety bond as a prerequisite to obtaining a fiduciary appointment. To paraphrase Oregon Statute 114.265, a personal representative is a court-appointed fiduciary responsible for administering a deceased individual’s estate. Personal representatives are referred to as executors if the deceased individual nominated them in their will, or administrators if they were not nominated in the will or if no will exists.

Personal representatives are not required to purchase a bond if:

• The will explicitly waives the bond requirement (unless the court deems one necessary)
• They are the sole heir or devisee of the estate  (unless the court deems one necessary)
• They are a government agency or official
• All assets are held by a financial institution that will not release them except under court order
• The court restricts the sale or other disposition of the estate’s property without prior court approval

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 Oregon?

Personal representatives in Oregon must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to Oregon’s probate statutes for details on the process.

Step 1 – Meet the Qualifications:

No person may serve as a personal representative that:

• • Is incapacitated or financially incapable
  • Is a minor
  • Is an attorney that has been suspended or disbarred and is currently serving their punishment
  • Has resigned from the state bar for misconduct until they are reinstated
  • Is a relative of a licensed funeral service practitioner
  • Is a licensed funeral service practitioner or a partner or employee of a licensed funeral service practitioner

Step 2 – Determine Priority

Priority to serve as a personal representative is granted in the following order:

• • Persons nominated in the will
  • The surviving spouse granted that they are a devisee of the estate
  • Persons the surviving spouse nominates
  • Persons entitled to the estate’s assets under intestate succession
  • All other distributees of the estate
  • The Director of Human Services, Director of the Oregon Health Authority, or any approved attorney if the deceased individual received Medicaid or any other public assistance and the cost of care can be recovered from the estate
  • The Department of Veterans’ Affairs if the deceased individual was a veteran or other qualified person
  • Any other qualified person

Step 3 – Hire an Attorney

Although not explicitly required, it is highly recommended that personal representatives hire an attorney to assist with the probate process.

Step 4 – Contact the Court

Qualified persons with priority should contact the county court with jurisdiction over the estate to obtain their appointment. A representative of the court will walk the personal representative through the appointment process, provide them with all required forms, and answer any questions they may have. Petitions to serve as personal representatives must contain all the information outlined in Oregon Statute 113.035.

Personal representatives of small estates do not have to go through the full probate process and can administer the estate by filing an affidavit with the county court. To be considered small, an estate must be worth less than $275,000 (maximum of $200,000 of real property and $75,000 of personal property).

Step 5 – Purchase a Surety Bond

Unless otherwise exempt, personal representatives must purchase and maintain a surety bond (limits outlined above).

How do Oregon Personal Representatives File Their Bonds?

Personal representatives should submit their completed bond forms, including the power of attorney, to the county court with jurisdiction over the estate.

The surety bond requires signatures from both the surety company that issues the bond and the personal representative. The surety company should include the following information on the bond form:

• Court where the bond is to be filed
• Name of the deceased individual
• Legal name of the entity/individual(s) buying the bond
• Surety company’s name
• Bond amount
• Date the bond is signed
• Date the fiduciary appointment was made

What can Oregon Personal Representatives do to Avoid Claims Made Against Their Bonds?

To avoid claims against their bonds, personal representatives in Oregon must ensure that they:

• Fulfill their fiduciary duties
• Do not mismanage the estate’s assets