An administration bond is a guarantee to the court from an estate trustee for the proper management of an estate, making the trustee personally liable if they default. It is required in various circumstances, such as when a person dies without a valid will, and serves to ensure debts are paid and assets distributed correctly. Judges may waive the requirement for a bond based on their discretion and the trustee's reliability in handling estate obligations.

1. Administration Bonds

2. • An administration bond is an obligation or a promise provided to a court that
an estate trustee will properly administer an estate.
• An estate trustee who files an administration bond acknowledges that he or
she will be personally liable under the bond for his or her conduct as estate
trustee if appointed. One or more surety also confirms that it/they may be
liable for payment of an amount equal to that indicated on the bond if
judgment is made against the estate trustee and he or she defaults on
payment.
• The amount of an administration bond is typically double the value of the
assets to be administered by the estate trustee, subject to a judge's
discretion.
What is an administration bond?

3. • In situations where the applicant is someone other than the individual
entrusted by the testator, the law requires an extra degree of protection of
the interests that may be put at risk if the estate trustee acts improperly in
administering an estate.
• Courts have said that the purpose of an administration bond is to ensure that
an estate trustee pays the debts of the estate and distributes the net assets
of the estate to the proper beneficiaries.
What is the purpose of an administration bond?

4. • Section 35 of the Estates Act provides that an administration bond may be
required in order for a Certificate of Appointment of Estate Trustee to be
issued.
• An administration bond is typically required in the following circumstances:
• where a person dies without leaving a valid will and an Application for a
Certificate of Appointment of Estate Trustee Without a Will is filed;
• where a person dies with a will that does not name an estate trustee;
• where the applicant (whether or not named in a will) resides outside of
the Commonwealth or is a foreign estate trustee's nominee as estate
trustee without a will;
• where the applicant is a succeeding estate trustee who is not named in
the will; and
• where a person interested in the estate (including a creditor) successfully
moves for an order that an estate trustee or applicant for a Certificate of
Appointment must file a bond.
When is an administration bond required?

5. • The legislation provides that an administration bond will not normally be
required where:
• the applicant is a ministry, commission, board, or other part of the
provincial government (Section 36(1) of the Estates Act);
• the applicant for a Certificate of Appointment of Estate Trustee Without a
Will is a surviving married spouse, the assets of the estate are less than
$200,000.00, and an affidavit setting out the liabilities of the estate is
included as part of the application (Section 36(2) of the Estates Act); and
• the applicant is a trust company (Section 175(4) of the Loan and Trust
Corporations Act).
What common exceptions exist to the requirement to file an administration bond?

6. • Judges have broad discretion to dispense with the requirement that an
administration bond be filed. A bond may not always be required, even if the
application falls into one of the above categories and is not subject to one of
the exemptions provided under the legislation.
• While the legislation does not describe other factors that a court will consider
in exercising its discretion to dispense with the filing of an administration
bond, case law suggests that it may be more likely where, consistent with
the purpose of a bond, the court is satisfied that the applicant will pay the
debts of the estate and distribute the assets of the estate according to law.
When might a judge otherwise dispense with the filing of an administration bond?

7. Thank you for reading!