Although no one ever wants to believe it, there are times when the individual administrating or executing an estate doesn’t work in their heirs’ and creditors’ best interests. This is why probate bonds exist and are so vital to the estate planning process.
Probate is a financial guarantee bond that is issued in order to ensure that the interests of creditors and heirs of an estate are protected from fraud or negligence done by the executor or administrator of that estate. It’s a vital protection that sometimes becomes necessary when those in charge of an estate begin taking manipulative, immoral, or illegal actions.
How probate works
One important question that many people ask when faced with this difficult scenario is who pays for this type of bond? And the answer is that this is an expense that is a part of the estate that it is written for. Essentially, the estate that corresponds to the heirs and creditors it protects.
It’s also often a question of the amount of protection that probate bonds should give to the creditors and heirs. In general, a court will make the requirement that the amount of any bond is double what the estate’s overall value is.
In some cases, probate law allows for the possibility of reducing the amount of a probate bond. This may be allowed if an estate’s administrator or executor can demonstrate that the majority of all assets were secured by way of a savings account. This also requires withdrawals to be authorized by the court.
It’s rarely easy to challenge the integrity of an estate’s administrator, particularly if you are one of the heirs or beneficiaries. Luckily, there are protections in place like probate bonds that help ensure everyone’s best interests are seen to.