What are Release and Refunding Bonds
What are Release and Refunding Bonds Under New Jersey law it is the duty of the fiduciary [Executor or Administrator] to make arrangements to pay bills and other estate expenses and carry out instructions under the Will. NJSA 3B: 23-24 provides the fiduciary shall take a Release and Refunding Bond from each beneficiary.
Please read the enclosed draft Release and Refunding Bonds. When the estate is finished and ready to disburse money, you will fill the amount each will receive. You should type up an informal accounting to show assets of the estate, the expenses and amounts each beneficiary will receive. To make things easy, you can attach a copy of your checkbook register.Every beneficiary will need to sign his or her Release and Refunding Bond in front of an attorney or notary. If any beneficiary does not sign their release and refunding bond, then the estate funds cannot be distributed to anyone until approved by the Superior Court. An Accounting and Court approval under Rule 4:87-1 would take many months. We are requesting all beneficiaries to immediately make arrangements to sign the Release and Refunding Bond and return it to my office. Please also note under New Jersey law each beneficiary must certify they do not owe child support. Each beneficiary must fill out the child support section by hand.
The signed Release & Refunding Bonds must be filed with the County Surrogate and small fee paid. If the Surrogate required a bond, a copy of each filed Release & Refunding Bond must be provided to the bonding company. In the State of New Jersey, it is essential that Executors and Administrators obtain and file with the Surrogate’s Court, either an executed Release or combined Release & Refunding Bond from each beneficiary of the testator’s estate. Once debts and taxes of the state are paid, AND the Executor or Administrator is ready to make final distribution, the Executor or Administrator must have each beneficiary sign a “Release & Refunding Bond.” By executing a Refunding Bond, the beneficiary is agreeing that, in the event the assets distributed to him or her are needed at a later time to pay any debt of the estate, the beneficiary will then return part or all of the assets needed to pay estate debts. This provides the Executor or Administrator with security in the unlikely event claims are subsequently made against the estate. The release is proof that the Executor or Administrator has made distribution and that the beneficiary has received his or her bequest or distributive share. Source http://www.bergencountysurrogate.com/refundingbond&releaseforms.pdf REFUNDING BOND AND RELEASE By statute (N.J.S.A. 3B: 23-24) an Executor or Administrator is required on paying a beneficiary his/her share of the estate, to take a Refunding Bond and Release from the beneficiary and to file the bond in the Surrogate’s Court. The statute requires that the Refunding Bond and Release be in the amount or value of the beneficiary’s share of the estate. The Refunding Bond and Release must be signed by the beneficiary before a Notary Public or attorney. If the beneficiary is a minor or incapacitated person, the Refunding Bond and Release must be signed by the guardian of the property. The Refunding Bond and Release has a dual purpose: Refunding – To refund to the Executor or Administrator out of his/her share of the estate his ratable part of any unpaid debts, owed by the testator or intestate, if there are no other assets to pay them. Source http://www.mercercounty.org/government/county-surrogate/refunding-bond-and-release Release - To discharge the Executor or Administrator of an estate of his/her duties upon distribution to the beneficiary of his/her share of the estate. In an Administration that required a Surety Bond, the Administrator must request a Certificate of Release from the Surrogate at the time he/she files the Refunding Bond and Release. A Surety Bond will not be cancelled by the insurance agent unless the Certificate of Release is presented to the agent. It is necessary to file the completed Refunding Bond and Release from each beneficiary of the estate with the Surrogate’s Court. The statutory fee for filing is $ 10.00 per bond and $ 5.00 for the Certificate of Release.
Kenneth Vercammen Esq. 732-572-0500 2053 Woodbridge Ave. Edison, NJ 08817https://www.njlaws.com/probate_release_refund_bond.html?id=744&a=