Virginia Personal Representative Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Virginia Personal Representative bond.
At a Glance:
- Average 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 Virginia 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 Virginia: The circuit court with jurisdiction over where the deceased individual resided or had property
Background
Virginia Statute 64.2-500 requires all personal representatives of an estate to be appointed by a court before assuming their fiduciary duties. The Virginia 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 a probate surety bond to be eligible for appointment.
What is the Purpose of the Virginia Personal Representative Bond?
Virginia 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 Virginia Statute 64.2-503. 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 a Virginia Personal Representative Surety Bond?
BondExchange makes obtaining a Virginia 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?
Virginia Statute 64.2-504 dictates that the bond amount must be equal to the full value of the estate plus the full value of any real estate (if the will authorizes the personal representative to sell it) or the rents/profits it generates. The personal representative may request that the court set a new bond amount if the value of the estate diminishes.
What are the Underwriting Requirements for the Virginia Personal Representative Bond?
Most surety companies will examine the following factors when determining eligibility for the Virginia 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 Virginia 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 Virginia 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 Virginia Personal Representative Bond?
Virginia requires personal representatives to purchase a surety bond as a prerequisite to obtaining a fiduciary appointment. To paraphrase Virginia Statute 1-234, 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:
- All distributees (persons receiving property) or beneficiaries are personal representatives
- The will explicitly waives the bond requirement for the executor
Personal representatives that are exempt from the bond requirement may be required to obtain one if any person with an interest in the estate asks the court to require one.
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 Virginia?
Personal representatives in Virginia must navigate several steps to become court-appointed fiduciaries. Below are the general guidelines, but applicants should refer to Virginia’s probate statutes as well as the Virginia Court Clerks’ Association’s estate administration guide for details on the process.
Step 1 – Determine the Estate Type
Virginia only requires the appointment of a personal representative for estates undergoing the formal administration process. Typically, formal administration is not required for the estates of deceased individuals with personal property of less than $50,000. Additionally, formal administration is not required to transfer a motor vehicle title or for joint accounts with right of survivorship in banks, savings institutions, or credit unions.
Step 2 – Establish Priority
Priority for appointment as a personal representative will be granted in the following order:
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- Persons nominated in the will
- Beneficiaries of the will
- If no will, to the distributee (or his/her designee), or if multiple distributees, a person all distributees agree on
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 Circuit Court
Persons with priority must contact the circuit 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. Personal representatives should bring a formal death certificate and the original will (if any) to the circuit court.
Step 5 – Purchase a Surety Bond
Unless otherwise exempt, personal representatives must purchase and maintain a surety bond (limits outlined above).
How do Virginia Personal Representatives File Their Bonds?
Personal representatives should submit their completed bond forms, including the power of attorney, to the circuit 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
- Date the bond goes into effect
- Name of the estate
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
What can Virginia Personal Representatives do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, personal representatives in Virginia must ensure that they:
- Fulfill their fiduciary duties
- Do not mismanage the estate’s assets
