6 Things You Need to Know About Probate Bonds
A probate bond is a surety bond that ensures an executor, administrator, tutor, or curator properly handles the estate of a minor, incapacitated, or deceased person. The court orders the posting of this bond, which protects the estate's assets while also requiring the fiduciary to make restitution if their duties were carried out unethically.
A probate bond ensures that no member of a family flees with the property that was left to all members of the family as an inheritance. This bond protects an estate and its heirs rather than the fiduciary by stating unequivocally that the trustee will carry out their duties prudently. Anyone acting in a fiduciary capacity must have a surety bond.
Some examples of probate bonds are administrator, tutor, conservator, and others. The circumstances will determine the type of probate bond to use, and more information on this will be provided as you continue reading this article. Here are 6 things you need to know about probate bonds:
1. The Importance of Probate Bond
Probate bonds prevent embezzlement and fraud while distributing a deceased's property. In any case, a fiduciary will be responsible for safeguarding and inventorying all estate assets. The trustee clearly oversees all estate-related matters, such as contacting potential heirs and beneficiaries, paying off debts incurred by the deceased through the estate, appraising the estate, and ensuring taxes are correctly calculated and settled. A fiduciary handles all personal estate decisions and asset distribution. This surety bond provides heirs, stakeholders, and family members with recourse if the fiduciary acts dishonestly.
2. Who Needs a Probate Bond?
Fiduciaries need probate bonds to intervene in an estate situation legally. The type of probate bond to apply for will depend on the circumstances. Handling a minor's asset is not the same as handling the asset of a deceased or incapacitated person. For example, an administrator bond is required if the deceased and the fiduciary live in different states with different laws. The court decides how much bond is required. Even though fiduciaries require a probate bond to represent the interests of their customers, the bond serves their customers' interests rather than their own. The fiduciary is compensated for a job well done, and any malicious action by the fiduciary will result in serious charges and punishment.
3. Administrator Bond Approved by a Court
This type of probate bond ensures that a deceased person's estate is distributed exactly as the owner desires. When someone dies without a will, the fiduciary who will handle the estate asset of that person must obtain an administrator bond, which legally allows the fiduciary to oversee the proper distribution of the estate properties. In this case, a court appoints an administrator to mediate the case.
4. Executor Bond as Assigned in a Will
Before passing away, a person can name an executor and include that information in their will. Following the estate owner's death, the executor assumes the estate's duties and the authority granted to them by the executor bond to supervise and ensure that the assets are distributed correctly. When this type of probate bond is in place, the assets of the deceased person's estate can be divided fairly, highly eliminating any room for misunderstanding or argument.
5. Conservatorship Bond for Wards
A probate bond is required when a fiduciary is in charge of a minor's estate. The trustee is responsible for advising the minor on all financial aspects of the estate. The conservator's service does not include caring for the minor because another type of probate bond covers that.
6. When to Use Guardianship Bond
This is required for a trustee who manages the estate of a minor or someone who has been found legally incompetent. The guardian assists in the estate owner's care and makes decisions that will improve the client's health. The guardianship bond is valid until the ward reaches legal age or the incompetent owner becomes medically fit.
Many people die without leaving a will, which can result in their estate's assets being squandered by the wrong people. A probate bond ensures that the assets in your estate are handled responsibly and distributed in accordance with the law after your death. Regardless of whether or not there is a will, there is a bond appropriate for every circumstance. The cost of obtaining a probate bond varies depending on the asset's value and the circumstances surrounding it. If there is already an ongoing dispute between family members. In that case, the cost of obtaining a probate bond will be slightly higher, raising a red flag and indicating that it will take more resources and time to resolve.
