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Probate Bonds

Even if you have a will, the issues surrounding probate can be complex, and dividing your assets doesn't always go smoothly. If the courts appoint someone to oversee the probate process, that person becomes a fiduciary or trustee and may be required to take out a probate bond. This surety bond ensures the trustee will abide by all applicable laws and regulations as they manage your probate.

What is a Probate Bond?

Essentially, a probate bond ensures that the executor of a will or trust acts ethically to carry out the decedent's wishes with integrity. The executor has a fiduciary responsibility to act in the estate's best interests. A probate surety bond provides a mechanism for compensating any damages resulting from a failure of this responsibility.

If a fiduciary is negligent, the bond protects the estate by holding the probate manager financially responsible for their decisions. As a result, the parties involved in an estate feel more comfortable relying on a bonded probate manager or estate executor, knowing that person can be held accountable.

How Does a Probate Surety Bond Work?

Probate bonds provide legal recourse for a party to a will who feels they have been wronged to seek financial compensation. Without a probate surety bond in place, there is no practical or efficient way for people to hold probate managers accountable when they deviate from their fiduciary duty. That's why courts require bonds in many cases and why the beneficiaries of an estate prefer having them too.

Just like with any type of surety bond, there are three parties to a probate bond:

• Principal - The person who oversees the probate process and is bonded is the bond principal. They must obtain a bond, renew it as necessary, and pay for any claims filed against the bond promptly.
• Obligee - The person(s) benefiting from the dispensation of the estate is the obligee. This may be an heir, beneficiary, or creditor. The obligee has the right to file a claim against the bond seeking compensation if there are unreconciled issues during probate.
• Surety - The company that underwrites and issues the bond is the surety. If the principal doesn't pay for a valid claim, the surety pays the claim and then collects it from the principal.

Any heir, beneficiary, or creditor who alleges that funds have been stolen or mismanaged can file a claim against the bond seeking compensation. Then, the surety thoroughly investigates every claim. If an investigation proves the claim valid, the surety pays the claim in full up to the total bond value. The principal is responsible for all claims and must reimburse the surety, including fees and penalties.

Who Needs a Probate Surety Bond?

In some cases, the court will require the executor of a will to acquire a probate surety bond. This is more likely to occur with large, complicated wills or trusts with substantial assets or those where the estate has significant debts. In other cases, the will or trust itself requires the executor to be bonded. Again, the more complex the estate, the more likely the will or trust will require a probate bond.

Anyone required to do so by the court should get a bond, of course. And, if you propose to serve as the executor of a will or the probate manager, you must comply with any specific requirements for bonding.

How Much Does a Probate Bond Cost?

The probate bond cost depends upon a couple of factors – the bond value and the principal's credit history. First, if the court requires a bond, the court will also specify the size of the bond. Typically, surety bond costs are only about 1% to 5% 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 can still gain approval but it may come at a higher cost. At Viking Bond Service, we are committed to helping applicants to become bonded at the lowest possible cost.

Probate Bond Requirements: Can I Get One With Bad Credit?

Absolutely! Your credit history is the best guide for a surety company to evaluate how risky bonding you might be. However, at Viking Bond Service, we don't believe a few missteps in your past should define you. We work with people daily who have experienced troubled credit and put it behind them. With our Bad Credit Surety Bond Program, you'll be given the best chance at getting bonded and pay as low a premium as possible.

Do You Need To Renew a Probate Bond?

Probate bonds are valid for one year. If the probate wraps up in that time, you won't need to renew the bond. However, as long as probate remains open, you must maintain a valid bond. That means renewing the bond every 12 months. If your credit improves during that time, your renewal costs will be lower.

How Can I Get a Probate Bond?

At Viking Bond Service, acquiring a surety bond like a probate bond is a simple process. Just complete our online application today, and we'll get you a competitive bid ASAP. Or, give us a call at 1-888-2-SURETY (1-888-278-7389). We look forward to answering your questions!