- February 10, 2023
- Posted By:hmvreeland
- Category:Probate Bond
If a California court appoints you to manage the estate of a physically or mentally incapacitated person, it may require you to purchase a probate bond. The bond acts as a guarantee that you will perform your statutory obligations as defined under the Will or law. The purpose of a probate bond is to shield the estate beneficiaries and creditors from loss resulting from the executor’s negligence or wrongdoing. Common types of probate bonds include trustee bonds, guardianship bonds, and administrator bonds.
How Does a Probate Bond Work?
After a claim is made against your probate bond, the Surety launches an investigation. If the Surety company validates the claim, you are expected to compensate the claimant. If you fail to do so, the Surety steps in and resolves the claim. Once the claim is settled, the Surety recovers the compensation amount plus legal, administrative, and any other expenses from you.
Who Pays For a Probate Bond?
In California, the estate is responsible for payment or reimbursement of the bond premium.
How Much Do Probate Bonds Cost?
The judge usually sets the probate bond amount. The premium amount depends on several factors, such as the size of the estate and the Principal’s credit history. Probate bond premiums are usually calculated on a sliding scale. The lower the bond amount, the higher the initial percentage, which starts at $5/thousand or 0.5% for the initial $50,000 coverage and declines from there. The average cost of a $1 Million probate bond is $2,800 +/-.
How to Obtain a Probate Bond?
The first step to obtaining a probate bond is to choose a reputable Surety bond agency / company. The Surety bond agency / company of your choice requires you to fill out an application which is forwarded to an underwriter for evaluation. The underwriter may need the following documents to determine your eligibility:
➢ A letter explaining why you were chosen as the executor
➢ Any court documents that state bonding requirements
➢ Copy of the will/trust
➢ A list of heirs or beneficiaries
➢ A letter clarifying whether your appointment as the executor is temporary or special
In addition to reviewing these documents, the underwriter evaluates your financial health. If your application is approved, the underwriter approves the bond, and the Surety agency mails a hard copy of the bond to you. The bond can then be filed with the court.
H.M. Vreeland is committed to meeting the Surety bonding requirements of individuals and businesses. Our ability to tailor bonding solutions to our customers’ unique needs sets us apart from other Surety bond companies in California. To request a quote, call (415) 566-3401.