Bay Area Estate And Tax Planning Law Firm

The purpose of a probate bond in California

On Behalf of | Oct 24, 2023 | Probate And Estate Administration |

If you are appointed to administer an estate by the probate court in California or have been named as an executor, you might be required to post a probate bond. Being bonded is a common requirement to protect the estate’s beneficiaries and heirs.

What is a probate bond?

A probate bond is a type of surety bond that is commonly required by probate courts for executors and administrators. However, the person writing a will can waive the bonding requirement for named executors. A probate bond is a contract between the following three parties:

  • Principal – Estate administrator or executor required to post the bond
  • Obligee – Probate court that requires the bond
  • Surety – Insurance agency or private bond company that approves the bond and guarantees the principal will perform as legally required

To get a bond, the principal must submit an application to the surety, which will review it to assess the risk the surety company would face if it approved the application. Depending on the underwriting factors, the principal will have to pay a small percentage of the required bond amount to purchase the bond. The percentage will be higher if the assessed level of risk is high and lower if the assessed level of risk is low.

Why are probate bonds required?

Probate bonds protect the heirs and beneficiaries from potential fraud and other misconduct that might be committed by the estate executor or administrator. If the administrator or executor engages in fraud or misconduct, the beneficiaries or heirs can file a claim against the probate bond. The surety company will pay valid claims up to the total bond amount. However, the executor or administrator will be contractually required to repay the surety in full for all valid claims it pays.

Even if an executor’s bonding requirement has been waived, it still makes sense to purchase a probate bond. Doing so provides evidence that the executor has been vetted by the surety company and intends to comply with their fiduciary and legal responsibilities.