Probate Bond

What is the story with probate bond? What is it? When is it required?

Quite simply. A bond is an insurance policy that the executor or administrator of the estate must purchase and file with the probate court  to secure the value of personal property in the estate.

The purpose of the bond is to allow beneficiaries or creditors to be made whole if the executor or administrator misuses estate money. For example, let’s say that Mom passed away with bank account that had $200,000 in it. Let’s say the executor stole $50,000 from the estate. The other beneficiaries could make a claim against the bond company for that $50,000. The bond company would pay the beneficiaries the $50,000 and then it would be up to the bond company to get that $50,000 back from the unscrupulous executor.

Typically, the requirement for the amount of the probate bond is twice the value of the personal property in the estate. So if Mom left a $200,000 bank account, the executor will have to purchase a $400,000 bond.

When is a probate bond required?

A probate bond is typically required unless there is a will that waives the requirement that the executor purchase a bond. That means that a bond is almost always required if there is no will. Generally, there are only a few exceptions to the bond requirement. Bond is not typically required if the administrator of the estate is the sole estate beneficiary.

It’s important to remember that even if there is will that waives the bond requirement for the executor, any interested party in the estate may request that the court require a bond. Any interested party could include a creditor or another beneficiary.

Who pays for the probate bond?

The premium is paid from the assets of the estate.