Surety Bond Quarterly - Summer 2015 - 24

estate, or restrictions on the Letters of
Authority issued by the court. Putting
one or more of these restrictions in
place will not only help limit access
to the funds, but also help fiduciaries avoid the temptation of inappropriately accessing and spending
the funds.
Attorney involvement
Many sureties require attorneys to
be involved from the beginning of
the estate administration through

the end. Once an attorney makes
that commitment, he or she should
provide the surety with some assurance that funds will be properly used
and that the estate will be properly
administered. Some sureties require
that the attorney sign an agreement
indicating that if he or she withdraws
as counsel for the fiduciary, then the
attorney will put the surety on notice
of the withdrawal. Other sureties
require the attorney to exercise joint
control over the funds with the client.

Penal sum of bond and
assets of the estate
The penal sum of the bond is generally
based on the value of liquid assets of
the estate, personal property owned
by the estate, and the ward's annual
income. During the underwriting process, the bond producer should have a
clear understanding of the assets in the
estate. To the extent the penal sum of
the bond is inconsistent with information provided to the producer, he or she
should follow up with the fiduciary or
his or her counsel to obtain more information about the assets.

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19/05/15

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Co-fiduciaries
In some situations, the court will
appoint two individuals to serve as
co-fiduciaries. If a surety is willing to
write a bond for two fiduciaries, the
bond producer should obtain a bond
application with a signed indemnity
5:30 PM agreement from each of those fiduciaries. The producer should ensure
that the surety issues a single bond
in the penal amount ordered by the
court as opposed to two separate
bonds (one for each co-fiduciary).
The issuance of two separate bonds
could lead to double the exposure
for the surety.

782 N.W. 42 Avenue, Suite 545, Miami, FL 33126

Telephone (305) 444-6503 | National (800) 272-5332
Facsimile (305) 444-3840 | Email ealvarez@efacpa.com

Website: www.efacpa.com
24

SURETY
693767_EFAlvarez.indd
1

BOND QUARTERLY | SUMMER 2015

Size of estate
The underwriting for a small estate
is generally much easier and quicker
than for a large estate. Each surety
defines "small estate" or "large
estate" differently. Because the surety's potential liability is greater once
an estate meets the surety's definition of a "large" estate, the underwriting process for a large estate should
not be automated; an actual review of
all information should be undertaken
by the surety.

5/16/14 4:06 AM

Underwriting red flags
Each surety has its own list of "red
flags" that create unfavorable risks for
the surety. This especially holds true
in larger estates. Instead of simply
declining to write a bond when a red
flag is raised, sureties can attempt
to underwrite the risk by obtaining
more information or putting a system
of controls in place.


http://www.cmgia.com http://www.efacpa.com

Table of Contents for the Digital Edition of Surety Bond Quarterly - Summer 2015

NASBP Upcoming Meetings & Events
2015-2016 NASBP Executive Committee
From the CEO - There is Poetry in Surety Claims, Surely
Practical Insights: What You Need to Know - Hiding in Plain Sight: Specifications as a Source of Risk
Profile: President Susan Hecker
Developing Your Leadership Vision
Liability Issues - Can Public Owners be Held Liable to Subcontractors and Suppliers for Failure to Require General Contractors to Obtain Required Payment Bond?
An Introduction to Probate Bonds
Class Act - Surety Team’s Cooperative Efforts Enable School to Open on Time
NASBP’s Attorney Advisory Council - Participants Opine on Current Risk Management Challenges and Business Opportunities
The AIA Describes Updated and Expanded Design-Build Documents Family
Contractor Practices That may Result in Construction Claims to Recover for Delays and increased Costs
NASBP Annual Meeting Speakers - Veterans can benefit private sector, but need help finding jobs
Index to Advertisers
Surety Bond Quarterly - Summer 2015 - cover1
Surety Bond Quarterly - Summer 2015 - cover2
Surety Bond Quarterly - Summer 2015 - 3
Surety Bond Quarterly - Summer 2015 - 4
Surety Bond Quarterly - Summer 2015 - 5
Surety Bond Quarterly - Summer 2015 - 6
Surety Bond Quarterly - Summer 2015 - 2015-2016 NASBP Executive Committee
Surety Bond Quarterly - Summer 2015 - From the CEO - There is Poetry in Surety Claims, Surely
Surety Bond Quarterly - Summer 2015 - 9
Surety Bond Quarterly - Summer 2015 - Practical Insights: What You Need to Know - Hiding in Plain Sight: Specifications as a Source of Risk
Surety Bond Quarterly - Summer 2015 - 11
Surety Bond Quarterly - Summer 2015 - Profile: President Susan Hecker
Surety Bond Quarterly - Summer 2015 - 13
Surety Bond Quarterly - Summer 2015 - Developing Your Leadership Vision
Surety Bond Quarterly - Summer 2015 - 15
Surety Bond Quarterly - Summer 2015 - Liability Issues - Can Public Owners be Held Liable to Subcontractors and Suppliers for Failure to Require General Contractors to Obtain Required Payment Bond?
Surety Bond Quarterly - Summer 2015 - 17
Surety Bond Quarterly - Summer 2015 - 18
Surety Bond Quarterly - Summer 2015 - 19
Surety Bond Quarterly - Summer 2015 - 20
Surety Bond Quarterly - Summer 2015 - 21
Surety Bond Quarterly - Summer 2015 - An Introduction to Probate Bonds
Surety Bond Quarterly - Summer 2015 - 23
Surety Bond Quarterly - Summer 2015 - 24
Surety Bond Quarterly - Summer 2015 - 25
Surety Bond Quarterly - Summer 2015 - 26
Surety Bond Quarterly - Summer 2015 - Class Act - Surety Team’s Cooperative Efforts Enable School to Open on Time
Surety Bond Quarterly - Summer 2015 - 28
Surety Bond Quarterly - Summer 2015 - 29
Surety Bond Quarterly - Summer 2015 - NASBP’s Attorney Advisory Council - Participants Opine on Current Risk Management Challenges and Business Opportunities
Surety Bond Quarterly - Summer 2015 - 31
Surety Bond Quarterly - Summer 2015 - The AIA Describes Updated and Expanded Design-Build Documents Family
Surety Bond Quarterly - Summer 2015 - 33
Surety Bond Quarterly - Summer 2015 - Contractor Practices That may Result in Construction Claims to Recover for Delays and increased Costs
Surety Bond Quarterly - Summer 2015 - 35
Surety Bond Quarterly - Summer 2015 - NASBP Annual Meeting Speakers - Veterans can benefit private sector, but need help finding jobs
Surety Bond Quarterly - Summer 2015 - 37
Surety Bond Quarterly - Summer 2015 - Index to Advertisers
Surety Bond Quarterly - Summer 2015 - cover3
Surety Bond Quarterly - Summer 2015 - cover4
Surety Bond Quarterly - Summer 2015 - outsert1
Surety Bond Quarterly - Summer 2015 - outsert2
Surety Bond Quarterly - Summer 2015 - 43
Surety Bond Quarterly - Summer 2015 - 44
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