Probate Bond (Fiduciary Bond)
A probate bond is a fiduciary class of surety bond. "Fiduciary" is simply another term for a financially responsible party. A fiduciary's duty is to faithfully inventory, value and distribute the assets of a deceased person in accordance with the law and any directives given by the probate court holding jurisdiction over the estate. A probate bond can be referred to by different names. All are essentially the same obligation.
Where a will exists which clearly states how estate assets are to be distributed, a probate bond is not generally required. Where a person dies without a will the decedent's estate is considered "intestate". In 1969, the National Conference of Commissioners on Uniform State Laws promulgated the Uniform Probate Code (UPC). Those jurisdictions that adhere to the UPC guidelines may under certain circumstances waive the probate bond requirement. Only sixteen states have accepted the UPC treatment in its entirety.
A probate bond guarantees the performance of very specific duties. A fiduciary must identify all heirs and claimants, identify and collect the deceased's assets and appraise them. The fiduciary must pay all debts and taxes, then distribute the remaining assets among the heirs. Liquidation of assets to raise money for the decedent's debts is often necessary. The probate bond further guarantees that the executor will identify investment or retirement accounts which are beneficiaried to the estate, which must go through the probate process before being disbursed. While performing these duties the fiduciary has an affirmative duty to make sure that estate assets will not lose value. In legal terms the probate bond protects the estate from the misfeasance, malfeasance and nonfeasance of the fiduciary.
A probate bond is not generally considered a high risk class of surety bond. An applicant must expect the surety company to review his or her credit, the assumption being that an applicant that has a history of problems managing his or her own finances, may present a serious problem in dealing with the estate's finances. Surety companies also require the participation of an attorney that specializes in probate, conservatorship and/or guardianship matters. Unless the fiduciary bond applicant is an attorney or professional fiduciary, navigating the probate code and staying within the probate rules can present a significant challenge. Probate bond underwriters will also consider conflict among the heirs, fiduciary indebtedness to the estate and ongoing businesses of the deceased as important factors.A typical probate bond request submitted to a surety agent will contain the following:
- Application for a probate bond
- Personal financial statement of the applicant
- A schedule of the estate assets
- Identification of the attorney assisting the administrator(ix), executor(trix) or personal representative
If you need to identify an attorney with probate experience we recommend Martindale.
Underwriting of probate bonds requires review by a surety specialist with knowledge about probate law in the jurisdiction where the bond will be filed and experience with fiduciary obligations generally. Surety bond leader, Surety One, Inc., specializes in fiduciary bonds. We offer probate bonds in all fifty states, Puerto Rico, Canada and U.S. Virgin Islands. Application submissions are reviewed and quoted on the same day as they are received. We are the MOST RESPONSIVE surety bond underwriter in the business. Call (800) 373-2804, email us at Underwriting@SuretyOne.com or chat with us live here for a probate bond application or for any fiduciary bond need.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.
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