Probate Bond

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What is a probate bond?

A probate bond is a court-ordered bond for an individual or entity-appointed representative of an estate. Examples of this appointed role include estate administrators and executors. A probate bond ensures that the appointee carries out their duties ethically and legally.

Probate Definition

A death certificate and petition are required to begin the probate process when someone dies. Probate is a legal process that occurs after someone passes away. It involves validating and administering the decedent’s will (or their estate if they don’t have one). Assets distributed to beneficiaries may include real estate, bank accounts, and financial investments (Investopedia).

Typically, an executor is named in a will. If there’s no will, the court appoints an administrator to complete the probate process. The executor or administrator then acts as the personal representative of the estate. They have access to all assets and property in the estate and must manage it properly – a probate bond ensures they do.

The probate process often involves the following steps:

  • Find and manage the decedent’s will.
  • Assemble, inventory, and appraise the property.
  • Pay outstanding debts and taxes.
  • Distribute assets to heirs.

Probate Bond Definition

A probate bond ensures an estate’s personal representative is honest and trustworthy while carrying out their duties. The bond protects the estate and its beneficiaries from illegal activities like fraud and embezzlement. If the bondholder takes advantage of their role, beneficiaries may file a claim for any damages they suffer. 

Get Your Probate Bond:

Quick Takeaways

  • A probate bond is a court-ordered bond for an individual or entity appointed as a representative of an estate. 
  • The bond ensures an estate’s personal representative acts ethically and legally while carrying out their duties. 
  • Typically, probate bonds are required if there are outstanding debts or if the decedent’s heirs don’t waive the bonding requirement.
  • Typically, the courts will set the bond limit based on the total estate value the bondholder will be responsible for.

Who needs a probate bond?

If you’re about to be appointed as an administrator or executor, the court or the decedent’s will may require you to get a probate bond. Even if it’s not mandatory, it can be wise to get bonded. Typically, this bond is necessary if there are outstanding debts or the decedent’s heirs don’t waive the bonding requirement.

How do probate bonds work?

A probate bond is a three-party agreement between a principal, an obligee, and a surety.

  • Principal: The executor or administrator assigned to an estate who must purchase the bond and honor its terms
  • Obligee: The estate’s beneficiaries
  • Surety: The financial company that issues and backs the bond in case of claims

If the estate’s heirs believe the principal failed to fulfill their duties or broke the law, they can file a claim. The surety will investigate to determine if the claim is valid. If it is, the principal can settle the claim, or the surety will pay the claim on the principal’s behalf. However, the surety will seek reimbursement from the principal for any costs they cover.

Types of Probate Bonds

There are various types of probate bonds, each of which works similarly to protect an estate. Here are some of the most common:

  • Executor bonds: An executor is typically named in a will to handle the administration of a deceased person’s estate.
  • Administrator bonds: An administrator is assigned to manage an estate when there is no will or the appointed executor can’t fulfill their duties.
  • Personal representative bonds: A personal representative (PR) is someone named in a valid will to act as the estate’s administrator. Or, if someone dies without a will, the appointed PR will serve as an executor. 
  • Conservator bond: The court appoints a conservator to supervise a deceased person’s heir’s finances if they are deemed incompetent by the court (e.g., too old, too young, or disabled).
  • Trustee bond: A trustee manages a deceased person’s trust for beneficiaries.

How much does a probate bond cost?

Probate bond costs vary based on the coverage required. Typically, the courts will set your bond limit based on the total estate value you will be responsible for

ZipBonds can issue probate bonds for as low as 0.5% of the required bond amount. For example, if you need a $200,000 bond, your premium may be around $1,000.

Other Frequently Asked Questions

You may not need a probate bond if the deceased person had no outstanding debts or their beneficiaries agree to waive the bonding requirement. If the opposite is true, you will likely need a probate bond.

The terms “probate bonds” and “fiduciary bonds” are often used interchangeably. They are both umbrella terms for types of court bonds used when one party is appointed to act in the best interests of another party. 

Probate is the legal procedure of validating and administering the decedent’s will. A fiduciary is someone the court appoints to manage another person’s affairs (personal, financial, etc.).

Apply for Your Probate Bond Today

When applying for a probate bond, we may ask for financial documentation, court documents related to your case, and other information. You can start your application online or call us at (888) 435-4191 to apply over the phone. Our agents would be happy to walk you through the process and answer any questions you have along the way.

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About ZipBonds.com

Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”

Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.