Under the paragraph 68 of the Family Justice Courts Practice Directions 2015, the appointed executor of a will who has been granted Letters of Administration, whether with or without a will annexed or attached shall give security for the due administration of the estate by way of an Administration Bond and two sureties.
An administration bond and two sureties will be required should the following circumstances be in effect;
- The estate owned by the deceased exceeds the value of $5 million with debts excluded – when the deceased leaves behind a whole estate totally up to or more than $5 million. Liabilities and other expenses owed by the deceased are not included in the $5 million worth. With such a large money involved, it is no surprise that the probate court requires due administration.
- There are minors left behind by the deceased – if the deceased leaves behind estate beneficiaries such as children or grandchildren below the legal age then sureties are required. This is reasonable due to the nature and vulnerability of the heirs. Media often portrays wealthy children being exploited because of the fortune left to them by their parents. Establishing sureties allows the court to protect such heirs from ill-minded administrators.
- There is a life interest in the estate – when any of the estates of the deceased has life interest involved, then sureties ensure that the life tenant is provided for according to the deceased’s wishes.
- Certain estate beneficiaries lack the capacity as stated in the Mental Capacity Act – if the deceased as estate beneficiaries with disabilities or with mental incapacity, then sureties will be required to make sure that these heirs are well provided for.
- Where the grantee is a creditor – also applied in a situation when the beneficiary is a creditor.
- Other cases the Registrar sees fit – if the Registrar views a certain aspect of the estate need, then sureties will be required.
Importance of Trust Companies
A licensed trust company that has been granted letters of administration is not required to furnish any security for the due administration of the deceased’s estate. Choosing a Trust company has a lot of benefits that secure that the estate left behind will be adequately administered.
- Protects the deceased’s assets – corruption and misuse of funds are least likely to happen since Trust companies follow the law set up by the country concerning the handling of funds.
- Less hassle – time spent on having to find a person with the same total value as the estate left behind will be eliminated. Grantors can also skip the whole approval period, and probate court process since Trusts don’t pass through probate.
- Provides Security – worries of bankruptcy, money laundering and theft won’t be an issue since individuals are not the one handling estate administration but a corporation with means and ways to keep itself afloat. In most cases with capital and revenue more than the estate it handles.
In making a will with a legal entity, it is essential to take into account how much the estate to be left behind costs. Writing a will also requires the testator to think about the estate beneficiaries who will inherit the estate. Choosing a licensed and trusted company like Rockwills as the executor of a will and the estate administrator gives any individual the gratification of knowing that they are putting their assets into trustworthy hands.
Don’t have an estate plan yet? Contact us at Rockwills; we’ll be glad to help you create the perfect estate plan that best suits you.
Want to learn more about estate planning? Grab a copy of the latest estate planning book from Rockwills “The Rockwills Guide to Succession and Trusts in Wealth Management” http://www.rockwills.com.sg/book_purchase.aspx