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What is a Probate Bond?

When an individual passes away, a court is legally responsible for dividing and distributing the assets of the decedent’s estate to the heirs of the decedent during probate administration. To help simplify this process, most courts will designate an individual as the “personal representative” for administering the estate during the probate process. The personal representative is responsible for managing the liquidation and/or distribution of the estate property fairly and equitably. To mitigate the adverse impact of a personal representative who fails to complete this important task properly, the court often requires a guarantee from the representative. This is where probate bonds enter into the equation. 

A probate bond needs to be secured by the personal representative of the decedent’s estate. The bond itself serves as a guarantee to the decedent’s heirs that they will receive their rightful share of the estate. In simpler terms, if the personal representative defaults, the bond is a proverbial safety net that can be used to help ensure the decedent’s heirs are properly compensated. Below is a list of different types of probate bonds that can be obtained during the probate process:

  • Administrator bond – This type of bond is purchased, as the name implies, by an administrator of an estate. Please note that an administrator is routinely someone who is assigned to an estate when it is determined the decedent did not leave a Last Will and Testament. An administrator bond is taken out to help ensure the administrator handles the estate responsibly and adheres to all ethical and legal guidelines. 
  • Conservatorship bond – This type of bond ensures that a court-appointed representative will complete their legal obligations to a decedent’s heirs.
  • Personal Representative bond – This type of bond is taken out by someone officially designated as the personal representative in a decedent’s Last Will and Testament. The representative is responsible for managing the estate in accordance with the terms of the Will. 
  • Trustee bond – This type of bond is purchased by a trustee or someone who is empowered to oversee the assets of a decedent. The trustee bond helps ensure the trustee will manage the assets in accordance with the terms in the decedent’s Will.
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How Do Probate Bonds Work?

A probate bond is akin to an insurance policy. The estate’s personal representative will need to secure a probate bond from a surety company. The representative will purchase the bond using a portion of the estate’s value. In most instances, the cost of a probate bond will be around 0.5 percent of the estate’s estimated value. Please note that securing a probate bond is required before someone can be appointed by a court to serve as the representative or administrator of an estate. This means it is fairly common for the individual designated to serve as the representative to purchase the bond out of their own funds but be reimbursed subsequently through the value of the estate.  

It is important to understand that a probate bond is NOT a shield designed to protect the personal representative, administrator, or trustee empowered to manage the estate. In fact, if the surety company that was used to secure the probate bond has to actually step in to help resolve a claim, they typically require full reimbursement (on top of reimbursement for legal expenses) directly from the bondholder (i.e., the representative, administrator, or trustee of the estate).

Cost of a Probate Bond

The total cost of a probate bond is not set in stone and will fluctuate depending on various factors. For example, in many instances, the cost of a probate bond will be decided by a probate judge. Other relevant factors used to calculate the cost of a probate bond include 

  • the size of the estate being administered, 
  • the residence of the personal representative, 
  • the relationship of the personal representative with the decedent and their heirs. 

Nevertheless, in most instances, the cost of a probate bond premium will be roughly 0.5 percent of the total bond amount.

If you need a Probate Bond, Go Talk to Codi M. Dada

Have questions about the steps needed to secure a probate bond? Contact Codi M. Dada today to schedule a no-cost, confidential consultation. Codi M. Dada is a respected and reputable probate lawyer in Marin county who understands the inherent complexities of the probate process. Mr. Dada believes that you should not have to juggle both the pain of losing a loved one and the stress associated with navigating an estate through the probate process. Codi M. Dada is here to help. As your probate lawyer, Codi M. Dada will provide you with the guidance you need to make distributing assets easy and straightforward. If you reside in or around Novato, CA, consider calling for more information and receiving a free initial consultation with Mr. Dada.

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