An enforceable bond protects an estate’s heirs during probate. The executor’s bond guarantees the executor fulfills their duties. Waiving the bond requirement can speed up the probate process. The cost of the bond varies based on property value, and a bond company can issue it. If a claim is paid, the bond company can take legal action against the executor for repayment.
An enforceable bond protects the heirs of an estate. After a person dies, his property is subject to probate. This generally means that an executor must collect on the deceased’s estate, take an inventory of the estate, ensure proper appraisals, pay any valid debts from the estate’s assets, and then distribute the remaining estate. The executor’s bond operates as a guarantee that the executor fulfills his duties as required by law. If an executor mismanages the estate, steals from the estate, or does something that impairs the value of the estate, the bond will compensate the estate accordingly.
The bond of the executor substantially guarantees the correct fulfillment. It is similar to an insurance policy. Each jurisdiction may use other terms for these types of obligations. Some jurisdictions may use the terms real estate bonds, trust bonds or probate bonds. Despite the term, the purpose of the bond is the same: to protect property and the heirs of the property.
The laws of many jurisdictions allow a person making a will to waive the requirement of an executor bond. This means that a person acting as an executor will not need to obtain a bond. The law usually simply requires the person making a will to include clear language in the will waiving the bond requirement. Eliminating the requirement for an enforceable bond speeds up the probate process and minimizes estate administration costs. A probate attorney can advise a person when a waiver of a bond is appropriate.
The cost of this type of bond will generally vary, based on the appraised value of a property. A person can obtain an enforceable bond from a bond company or surety company. These companies specialize in numerous types of bonds. A person normally only needs to submit an application for the bond; the bond company can do a credit check and then issue the bond without problems. The executor of the will is entitled to a refund of the amount of the deposit from the estate.
If the binding company pays a claim under the executor’s bond, it can take legal action against the executor for repayment of any claims. The bond company has minimal risk when issuing a bond. It simply determines whether a person has sufficient assets that he can prosecute for a violation. If it determines that a person is not lienable, it will not issue a bond. If this occurs, a probate court may have to designate someone else as the executor.
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