When a person passes away, and leaves behind a will, the estate’s executor will need to probate the will. The administration of the will ensures the decedent’s debts are paid prior to beneficiaries receiving their inheritance. The fiduciary duties of the executor may require getting a bond in probate.
How Does a 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. The executor will have to reimburse the bond company up to the amount of damages expended.
Jill is appointed to be the executor of Bill’s estate. Bill’s estate 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 timely pay the property tax owed on Bill’s condos. The County of Los Angeles commenced foreclosure proceedings against Bill’s condos. Jill’s lack of action constitutes a breach of fiduciary duty. Jill failed to exercise ordinary care and diligence when managing Bill’s home for Mark’s behalf. 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.
A California probate bond is required of all personal representatives to protect interested parties. Interested parties include beneficiaries and creditors. A bond is not required under the following conditions:
(a) A bond is not required in either of the following cases:
(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.
(b) Notwithstanding the waiver of a bond by a will or by all the beneficiaries, on petition of any interested person or on its own motion, the court may for good cause require that a bond be given, either before or after issuance of letters.
How Much Does Getting a Bond in Probate Cost?
Getting a bond in probate can, but does no have to be, costly. The price of the bond depends on the value and nature of the estate. Bond qualification depends on the executor’s net worth and creditworthiness. A bond waiver can be submitted to the court.
The Steps to Get a Probate Bond
In order to get a bond, you must first contact a local surety company to apply for a probate bond. The executor will have to file an application with a bond company. The surety company will conduct a credit check of the executor. The cost of the bond is proportionate to the executor’s creditworthiness and the amount of the bond.
Contact A People’s Choice for more information on getting a bond in probate. We can refer you to surety companies to obtain a bond in order to administer a will.