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Probate Surety Bond

Most people understand the importance of having a will, yet the majority of Americans (55%) don't have one. That can create issues during probate: when your estate is legally divided among your heirs and beneficiaries. Even with a will, dividing your assets doesn't always go smoothly. If the courts appoint someone to oversee the probate process, that person may need to secure a probate surety bond. The experts at Viking Bond Service have created this simple guide to explain how these bonds work and why they're important.

What is a Probate Bond?

You will also hear these bonds called executor bonds, but they both refer to the same situation. Probate managers have an important responsibility to oversee the dispensation of an estate ethically and transparently. If they're negligent in that responsibility, probate bonds hold them financially responsible. Parties who allege that funds have been stolen or mismanaged can file a claims against the bond seeking compensation. If an investigation proves the claim valid, the surety company behind the bond agrees to guarantee payment. The parties involved in an estate feel more comfortable relying on a probate manager or estate executor knowing that person can be held accountable.

How Does a Probate Bond Work?

Probate bonds provide a legal recourse for a party who feels like they have been wronged to seek financial compensation and a sense of justice. Without a probate bond in place, there wouldn't be an effective or efficient way for people to hold probate managers accountable when they deviate from their duty. That's why courts require probate bonds in many cases, and why the beneficiaries of an estate prefer having them too.

Who Should Get a Probate Surety Bond?

Anyone required to do so by the court should get a probate bond. You cannot perform any duties regarding probate until you obtain a bond, so there's no way to avoid the requirement and no incentive to wait on getting a bond. As soon as possible, find a surety company that issues probate bonds in your state. The surety must also be able to meet the bond conditions set by the court. To get more information, ask specific questions, or request a bond quote, reach out to Viking Bond Service.

What Are the Parties Involved in a Probate Surety Bond?

There are three:

  • Principal - The person who oversees the probate process is the principal. They must obtain a bond, renew it as necessary, and pay for any claims filed against the bond in a timely manner.
  • Obligee - The person(s) benefiting from the dispensation of the estate is the obligee. They have the right to file a claim against the bond seeking compensation if there are unreconciled issues during probate.
  • Surety - The company that issues the bond. If the principal doesn't pay for a valid claim, the surety agrees to pay, but the surety also has the right to collect that same amount from the principal - the party that always has the final financial responsibility.

How Much Does a Probate Surety Bond Cost?

That depends, first, on the amount of the bond, which the court will assign based on the size of the probate. Actual probate bond rates, however, are only about 1% - 3% of the bond amount. So if you need to secure a $100,000 bond, you may only pay $1,000 in premiums. When you submit your bond application, underwriters will evaluate your credit risk and calculate your bond quote accordingly. Applicants with worse credit will pay more, but they won't necessarily be denied a bond.

How Are Claims Handled for Probate Surety Bonds?

When the obligee (someone receiving assets through the probate process) files a claim against the bond, the surety will encourage the principal (the person managing the probate process) to pay outright. If the principal declines, the surety will investigate the claim, and if it's valid, the surety will compensate the obligee. Once the obligee is paid, the claim is technically resolved, but the final step is when the principal pays back the surety. If the principal is unable or unwilling to do that, the surety can use whatever legal means available to collect payment along with interest and fees.

How to Apply for a Probate Surety Bond

The application process may vary depending on the state you're in and the bond conditions set by the estate or the court. In most cases, you must provide information about your background, business dealings, and credit history. The bond company is trying to evaluate your reliability and how likely you are to pay back your debts. When you apply for a probate bond with Viking Bond Service, you can expect to receive a quote back in as little as 48 hours.

Request Your Bond Quote Today

There's no reason to wait to get a bond, so fill out an online application today and get a bond quote back fast. If you want to speak with a bond expert first, call Viking Bond Service at 1-888-278-7389 or reach us through the contact form on this page.

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