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If you’re the executor or personal representative for a decedent’s estate, you have a wide range of responsibilities. One of them involves applying for a probate bond, which acts as an insurance policy for the estate.
But who pays for a probate bond, and how much will it cost? Whether you’re following Georgia probate law or starting probate in another state, the answer will likely be the same: you, the estate executor.
What Is a Probate Bond?
A probate bond is provided to the court when starting probate to settle an estate. It acts as an insurance policy for the estate executor.
As executor, you are responsible for ensuring that the decedent’s will comes to fruition, settling debts, and distributing the remaining assets according to the decedent’s wishes. This is a significant responsibility, and there are a few checks in place to ensure you complete it correctly.
A probate bond ensures that you handle your executor responsibility well and covers any losses that arise if you do not. For example, if you take money out of the estate, distribute assets incorrectly, fail to pay taxes, or neglect to resolve debts, the surety bond can provide funds to cover these errors.
Who Typically Pays for a Probate Bond?
Because a probate bond protects the estate against you as the executor, it makes sense that you would be the one responsible for paying the premium for this bond.
When you go to probate court to open the estate and begin the probate process, the court will require you to apply for a probate bond through a surety company. This company will charge a premium in exchange for issuing the bond. The premium is usually a small percentage of the bond amount.
How Much Does a Probate Bond Cost?
A surety company will calculate the bond premium and overall value of the bond based on a few factors:
- The value of the estate assets
- The complexity of the estate
- Your credit history
On average, the cost of a probate bond comes out to around 0.5% of the estate’s value. For reference:
- $25,000 estate = $125 premium
- 100,000 estate = $500 premium
- $250,000 estate = $1,250 premium
- $1 million estate = $5,000 premium
The probate bond won’t cost much if the decedent’s estate is relatively small. But if you’re the executor of a large estate, this bond could set you back thousands of dollars. Also, probate bond premiums typically are not refundable, but you may qualify for a reimbursement from the estate assets.
Applying for a Probate Bond
Now that you know who pays for a probate bond, you should understand the process of applying for this bond. You need to complete an application with the surety company, which determines the probate bond amount and premium.
You will need to provide information about your financial history, qualifications, and background on the application. The surety company will then conduct an underwriting process to determine the risk involved in providing the bond. It will consider your financial stability and professional experience, among other factors. It may also require you to hire an attorney to represent you during probate.
The value of the estate significantly impacts your approval process for the probate bond. If the estate is only worth a few thousand dollars, the surety company won’t face much risk lending you a bond. But if it is worth millions of dollars, you may need to provide more information to prove you are capable of responsibly fulfilling the executor’s duties.
In some cases, the surety company may not approve the application, which means you won’t be able to serve as executor. An alternate executor may take your place.
If the surety company approves your application, it will set a bond premium, which is the fee you will pay in exchange for the bond. The actual value of the bond is typically equal to around twice the value of the estate.
Can You Receive a Probate Bond Waiver?
The decedent may have included a probate bond waiver in their will. This would, ideally, prevent you from needing to pay for the bond upon filing for probate.
However, just because the decedent included this waiver does not mean the court will recognize it. Probate bonds are a court requirement, and the court may still want you to pay for it. It may also request that you pay for the probate bond if you live outside of the state or meet other criteria that could increase your risk of failing to execute the estate correctly.
If you’re concerned about who pays for a probate bond, it won’t hurt to request a waiver from the court. Typically, the court only approves waivers in instances where the estate is low in value.
Seek Financial Relief During Probate From Rockpoint Probate Funding
Who pays for a probate bond? Paying the premium on a probate bond is just one of the many challenges faced by an executor. If you are struggling to make ends meet while fulfilling your duties as executor despite your best intentions, consider applying for a probate advance from Rockpoint Probate Funding.
We can issue you an advance on a portion of your inheritance to help you afford your financial obligations and administrative expenses. Our funding is non-recourse, meaning you won’t have to pay us back should your inheritance fall through.
Contact Rockpoint Probate Funding today at 888-263-8588 to request your free evaluation.
