A document that guarantees the victim will be compensated if a person occupying the trust does not carry out his or her legal and ethical responsibilities. If an executor, trustee, or guardian wrongfully deprives someone of their property under bond to replace it up until limits are set forth in the contract with the bonding company.
A probate bond is a court bond, issued on the trust of an executor’s performance in the distribution of a deceased person’s estate. The bond is a guarantee that the executor will act in accordance with state laws.
Importance of the probate bond
The issuance of a probate bond protects the interests of the beneficiaries as well as the will and desire of the testate. It also helps to ensure that the executor is acting within his powers and within the laws of the state.
The probate bond gives the heir, stakeholders, or beneficiaries the power to file a claim against the executor if found failing to comply with the regulations of the state pursuant to probate matters.
Timeline of the probate bond
Issuing the bond doesn’t take a lot of time. However, the interval between the issuance of probate bonds and the issuance of administration letters can go from one week to three months.
How does the probate bond work?
The probate bond will be issued if the judge feels that it is prudent to protect the estate as well as the beneficiaries. This probate bond can be required before the letters of administration are issued.
Probate bonds Vs court bonds
Probate bond and fiduciary bond are similar terms that encompass the many court bond types required when individuals are appointed to act on behalf of others. Probate bonds are different from bail bonds because a bail bond is based on showing up to court where a probate bond is issued prior to letters of administration being issued as a requirement
Determining if the estate needs a probate bond
Some judges always require probate bonds. The need for a probate bond is determined based on the person who is petitioning to become the personal representative or executor and where the person lives. If the person lives within the state, chances of needing a probate bond are lower.
- Relationship to the decedent of the person petitioning to open the probate
- Where the petitioniner lives (in state or out of the state)
- The nature and value of the estate
The bond amount is based upon the anticipated value of the estate. The estate attorney will correspond with a bond company. A premium is paid to the bond company by the beneficiary or executor because the bond is issued prior to the letters of administration being filed to open the probate case.
How much does a probate bond cost?
Probate bond costs can vary depending on the amount of coverage needed from the bond. The amount is typically based on the total estate value the fiduciary(executor or administrator) will be responsible for. Probate bond premiums are typically calculated at just .5%, or $5/thousand for the first $250,000 of coverage. This means $100,000 of coverage would cost just $500.« Back to Glossary Index