Filing a probate petition and carrying out the probate process following the death of a loved one will come at a cost. The probate cost varies from one state to the next, but families should prepare to spend about 4 to 7% of the value of a loved one’s estate to cover probate costs. Buying a probate bond is one of the many expenses of going to probate court.
So, what is a probate bond, why is it important for your family to secure one when executing a loved one’s will in probate court, and how much will it cost you? Keep reading to find out more about these essential bonds.
What Is a Probate Bond?
A probate bond, sometimes called a fiduciary bond, is used during a probate case to protect a family against any potential wrongdoing on the part of an executor for an estate. It can also be used in a probate case with a court-appointed administrator overseeing the execution of a deceased person’s will.
Ideally, a family won’t have to worry about an executor or administrator breaking state laws pertaining to the probate process. They also shouldn’t have to show too much concern over the possibility of an executor or administrator going against the terms of a living trust or the wishes of a deceased person documented in their will.
But in the event that an executor or administrator doesn’t do the job they were brought on board to complete, those in line to inherit estate assets from a deceased person can file a claim with the surety that issued a probate bond. This surety can reimburse each beneficiary accordingly based on the original terms and conditions of the bond.
Who Needs To Buy Probate Bonds?
There are several instances in which a probate court might not force an executor or administrator of a deceased person’s estate to purchase a probate bond. For example, a court won’t usually do it if a deceased person’s family members agree to waive this bond. Neither will a court typically do it if a deceased person has no outstanding debts.
Generally speaking, every executor, administrator, or other personal representative handling a deceased person’s estate should explore securing a probate bond. Even if this bond isn’t required by a probate court or listed as a requirement in a deceased person’s will, it can still be useful. It’ll provide everyone involved in the probate process with peace of mind.
What Makes Probate Bonds Important?
The executor or administrator of a deceased person’s estate isn’t allowed to do certain things while serving in their role. For instance, they can’t:
- Steal money or other assets from a deceased person’s estate
- Change any of the specific instructions included in a deceased person’s will
- Sell assets from a deceased person’s estate for much less than they’re worth
- Ignore debt or tax payments prior to asset distribution taking place
- Fail to notify heirs, creditors, etc., about a person’s death
Most executors and administrators wouldn’t even consider engaging in these activities. But if the executor or administrator of your loved one’s estate doesn’t play by the rules, having a probate bond can prevent your family from suffering financial losses.
You and your family should still make every effort to check up on an executor or administrator for your loved one’s estate and hold them accountable for any mistakes they make. But you won’t need to shadow them 24/7/365 during the probate process when you know they’ve purchased a bond to protect your family.
How Much Does a Probate Bond Cost?
The cost of a probate bond will vary depending on which surety an executor or administrator chooses and how large your loved one’s estate is in the first place. However, the average cost of this kind of bond is usually about 0.5% of its total amount. So if an executor or administrator takes out a bond worth, say, $250,000, it should cost around $1,250 in many cases.
This is ultimately a small price to pay when you consider the alternative. If you allow your loved one’s estate executor or administrator to work without a probate bond, you and your fellow family members could lose thousands of dollars and countless assets.
Can’t Cover the Cost of a Probate Bond? Rockpoint Probate Funding Can Help
One of the only downsides of securing a probate bond is that a surety will often ask you to pay for it up front. If you can’t afford one, Rockpoint Probate Funding can help you find the financial windfall to cover probate costs. We offer probate cash advances, allowing you to borrow against a portion of an expected inheritance.
Contact us today at (888) 263-8588 to schedule a free consultation. Learn more about how the process works and whether it might be suitable for you.
