How Does a California Probate Bond Work?
In the event the estate’s executor breaches a fiduciary duty, the beneficiary can pull the bond and obtain compensation for damages. Then, the executor will have to reimburse the bond company up to the amount of damages expended. Below is an example of the California probate bond process:
Jill is appointed executor of Bill’s estate, which consists of several luxury condos and $10 million in stocks and bonds. Mark is the sole beneficiary of Bill’s estate. Jill obtained a probate bond from Hugo & Co. During the probate administration, Jill failed to pay the property tax owed on Bill’s condos in a timely manner. Therefore, the County of Los Angeles commenced foreclosure proceedings against Bill’s condos. In this case, Jill’s lack of action constitutes a breach of fiduciary duty. Specifically, Jill failed to exercise ordinary care and diligence when managing Bill’s home on Mark’s behalf. As a result, Mark filed a motion to have Hugo & Co award him damages for Jill’s breach. The bond company awarded damages to Mark and will seek reimbursement from Jill.
When is a Probate Bond Required?
A California probate bond is required of all personal representatives to protect interested parties, including beneficiaries and creditors. However, the court does not require a bond under the following conditions:
(1) The will waives the requirement of a bond.
(2) All beneficiaries waive in writing the requirement of a bond and the written waivers are attached to the petition for appointment of a personal representative. This paragraph does not apply if the will requires a bond or if the executor or estate administrator resides outside California.
How to Get a Probate Bond
In order to get a bond, the executor must first contact a local surety company to apply. Then, the surety company will conduct a credit check on the executor. The cost of the bond is proportionate to the executor’s creditworthiness and the amount of the bond. Further, the price of the bond depends on the value and nature of the estate.
Contact A People’s Choice for more information on getting a bond in California probate. We can refer you to surety companies to obtain a bond in order to administer a will. Plus, call us today at 1-800-747-2780 to learn more about our probate services.