How to Get a Surety Bond for Probate Court

By Belle Wong

How to Get a Surety Bond for Probate Court

By Belle Wong

A surety bond protects executors and administrators of an estate if a claim of wrongdoing is made against them during the probate process.

When a person dies, it becomes the designated executor or administrator's responsibility to navigate the estate through the probate process properly. The tasks involved can be rather daunting, and mistakes can—and do—occur, in addition to fraudulent acts.

Find out if you need a surety bond for probate, what it is or why you may need to consider one.

The Role of an Executor or Administrator

An executor is the personal representative identified in the will of a person who dies with a will. However, if the person died without a will, that representative is called an administrator. Executors and administrators are legally obligated to properly administer the affairs of the estate, including taking the will through the probate process.

To probate a will, the process is generally the same as if there is no will, except that the will (rather than state law) determines who is entitled to the probate property. During the probate process, the executor or administrator typically has the following duties:

  • Locating and interpreting the decedent's will, if there is one
  • Identifying all of the decedent's probate property and listing it on an inventory
  • Evaluating the amount of the assets in the estate to report to the probate court
  • Having any real or personal property appraised
  • Paying property and estate taxes
  • Paying any other outstanding debts and liabilities
  • Paying for funeral service expenses
  • Distributing any remaining assets of the estate among the heirs and/or beneficiaries as required by the will or state law (if there is no will)

The role of an executor or administrator can oftentimes be intimidating. Ensuring that the heirs or beneficiaries receive their inheritances in a timely fashion, and in the correct amount, is the most important function. Additionally, any creditors (including governmental bodies and public or private companies and individuals) who may be owed money from the estate will also get in line and hold out their collective hands during the probate process. These parties have an interest in the estate as well and must be paid.

If errors occur, the executor or administrator may be held responsible.

What Is a Probate Surety Bond?

A surety bond—also known as a probate bond, an executor bond, or a guardianship bond—is a contract or agreement among three parties who are identified by the following terms:

  • Principal (the executor or administrator)
  • Surety (the issuer of the surety bond)
  • Obligee (the heir or beneficiary)

A surety bond is like an insurance policy. It is designed to protect the executor or administrator against potential claims of wrongdoing or malfeasance. It is a safety net for them and for the heirs or representatives, who may be concerned about the executor/administrator's actions. You may decide that you need a surety bond because having one in place tends to put all interested parties at ease. This level of comfort can be important, particularly because a decedent's estate can oftentimes be worth millions of dollars.

In a typical arrangement, the executor/administrator pays a fee (i.e., a premium), the surety, which is normally a professional bonding company or an insurance company. The fee that a company will charge typically falls in the range of 1-5% of the value of the estate.

The surety financially guarantees to the obligee(s) that the principal will act in accordance with the terms established by state laws and the terms of the will or trust. The principal is normally permitted to seek reimbursement from the estate itself of any amount paid for the surety bond.

The heirs or beneficiaries stand to gain from the careful administration of the estate and proper distribution of the inheritance amounts. In a perfect world, the fact that the principal has taken on the responsibility of purchasing a surety bond provides the obligee(s) confidence that the principal will act responsibly and carry out his/her fiduciary duties with integrity and due care.

If there is any wrongdoing on the part of the executor or administrator, the heirs of the estate can file a claim against the bond. Malfeasance could include failing to comply with state laws or act in a way that violates the terms of the will or trust. In that case, the deceased's family members, heirs, and other stakeholders can file a claim against the bond to recover losses.

This claim is then investigated by the surety. If it is found to be legitimate, the surety reimburses the heirs for damages, as stated by the terms in the surety. It is then up to the executor to reimburse the surety for what was paid out. However, the reparations cannot exceed the bond amount.

Is an Executor or Administrator Required to Obtain a Surety Bond?

Many states require executors and administrators to obtain surety bonds. In other states, although an executor or administrator is not required to acquire a surety bond, an heir, beneficiary or creditor may petition the probate court and demand that an executor or administrator acquire a surety bond to guard against mishandling of the funds, whether intentional or inadvertent.

A surety bond is only as good as the solvency of the surety itself. In the event of a default or illegal conduct by the executor or administrator, the surety must pay the penal sum—which is the amount the surety promises to pay—to the obligee(s), and then seek reimbursement from the principal. Typically, state laws (as opposed to federal) regulate surety bonds.

To be on the conservative side, most executors and administrators who are in charge of a decedent's estate should buy a surety bond even if it isn't required. In many cases, the will or trust document will require that the executor purchase a surety bond. On the other hand, courts will not always order a bond to be purchased if there are no outstanding debts and the heirs agree to waive the bond. However, if not all of the heirs agree to waive the bond requirement, or if there is considerable outstanding debt, bonding is almost always required during the probate process.

If you are acting as an executor of the estate and you need a surety bond, you might consider contacting a professional bonding company or an insurance company to get one.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.