Administration bonds, which are usually referred to as probate bonds in California, are posted on behalf of individuals appointed to administer estates to ensure that they will discharge their duties in accordance with state law and follow the provisions of the will. Probate bonds are not required if the decedent placed their assets into one or more trusts as this kind of estate does not go through the probate process.
The purpose of probate bonds
The value of the estate determines the cost of probate bonds. This ensures that beneficiaries, creditors, the Internal Revenue Service and state tax agencies receive the money they should even if the administrator acts improperly. Estates pay for probate bonds, and they usually purchase them from surety companies. Before approving a probate bond, surety companies run credit and background checks on the administrator. An individual who does not pass these checks is considered unbondable. In these situations, estate funds are placed into a special account, and court orders are needed to withdraw them.
A probate bond is not always needed. Exceptions are sometimes made if the will specifically asks for this requirement to be waived or all of the beneficiaries sign bond waivers. This is often done to save the estate money when the administrator is a trusted individual. The court may still require a bond in these situations to protect the interests of all of the parties involved. When the court denies these petitions, it may choose to lower the amount of the bond. Courts sometimes reject bond waiver petitions when administrators live in another state.
Attorneys with estate administration and probate experience may explain the purpose of probate bonds as well as the peace of mind they provide and how to obtain them. Legal professionals may also discuss ways to avoid the probate process by using estate planning tools like irrevocable trusts.