Understanding all of the legal jargon involved in administering an estate through probate court is enough to make your head spin. There are so many new terms to know, steps to take, and processes to research. It is a rather big responsibility to undertake, therefore you want to get it right. One new term to understand and make decisions about is a probate bond. What is a probate bond? How do probate bonds work? Are they necessary? These are just a few questions you might be wondering.
Have you recently been named as the Executor of a loved one’s estate and need to secure a probate bond? Or perhaps you are estate planning and you’re unsure of whether you should mention a probate bond in your documents.
Here’s some information about probate bonds to help you understand your next steps and make your decision.
How Probate Works
To understand the purpose of a probate bond, it’s important to first understand the probate process and how it works. When someone dies, their debts need to be paid and property and assets need to be distributed. Therefore, someone needs to be appointed to do so. In most cases, a person will designate an executor in their will, or if a person dies without a will, the court will appoint someone.
This executor or administrator is responsible for enumerating all assets, real estate, and property, paying all remaining debts, and then selling and distributing assets to all heirs and beneficiaries.
The Purpose of a Probate Bond
As you can see, an executor or administrator plays a big role in probating a will and carries a lot of responsibility. As a testator of a will, or as a beneficiary, how can you ensure that the executor carries out their duties responsibly and in good faith? By holding them accountable with a probate bond, also known as a surety bond or fiduciary bond. This bond is a type of insurance that protects the estate from losing value due to negligence or dishonest actions.
This surety company where the bond is secured acts as a third-party mediator to ensure that the executor has some oversight or someone to answer to. If questionable actions are taken with estate funds, an interested party can file a claim and the bond company will look into the actions to determine if the claim is valid. If so, they will give the administrator the chance to make things right or will cover the claim and then require the administrator to pay back the funds that were misused. This protects the estate from losing value and ensures that the administrator has something to lose if they do not handle their responsibilities properly.
There are several different titles and types of probate bonds such as an Executor bond, Administrator bond, Estate bond, Conservatorship bond, and more. Each of these operates in the same way as a function to financially protect the estate against loss.
Cost of a Probate Bond
Unfortunately, it’s impossible to give an exact estimate of a probate bond cost. The reason is that the bond amount is determined mostly by the size of the estate. The larger the estate, the larger amount of bond needed, and the larger cost to secure the bond. It is important to note that in many cases, the cost you pay to secure the bond can be reimbursed to you from the estate once you are officially appointed as the executor or administrator.
Securing a Probate Bond
Do you need help purchasing a California probate bond? Our team at The Legacy Lawyers can help guide you through the process and answer all of your questions. Call us today.