New York County (Manhattan) Surrogate Renee Roth has issued a ruling in the Matter of the Estate of Dossie 842 N.Y.S. 259 that the cost of surety bonds required for an Administrator could be charged against the shares of those distributees who refused to consent to dispensing with such bonds.
Any time that a Surrogate issues letters of Administration, it is necessary to consider the requirement that a surety bond be purchased to insure that the fiduciary appointed by the court will not waste or misappropriate the assets of the estate. The problem with this is that these bonds can be expensive, costing several thousands of dollars . This is particularly wasteful in many instances where there is neither the opportunity nor the inclination to mishandle the assets of an estate .
Generally, the distributees of the decedent are asked to sign consents allowing the court to dispense with ordering that a bond be filed and usually this is the case. The problem arises where one or two recalictrant relatives refuse to sign a consent. That is what happened in here where one of eight adult children refused to execute the waiver (in a companion case –the Estate of Bodek which was decided simultaneously and as part of the Dossie decision, it was one adult child of eleven who withheld consent) thereby legally compelling the Surrogate to order that a bond be purchased.
In this instance, Surrogate Roth has provided that the "hold-out" child in each of these estates would have to bear the cost of the bond out of his or her share of the estate rather than let the burden fall on the surviving parent and siblings.
In addition to the cost of the bond premiums, there are other costs that must be met when a bond is required. Often, the extra time expended by the estate’s attorney translates into higher legal fees both in the time spent in obtaining the bond and in any accounting proceeding which the bonding company may require the lawyer to complete (where an informal accounting might otherwise suffice). Of course, the distribution of the assets of the estate is also delayed by the need to obtain a bond. Unfortunately, this decision does not speak directly to these other expenses.