California Probate Bonds Overview
A probate bond is a court-required fiduciary bond that ensures estate administrators and executors their duties responsibly during probate. This is to discourage those who have been appointed from mismanagement, and running away with the money they now have access over. If an executor misuses estate funds, beneficiaries can file a claim with the surety company, which will investigate and compensate for valid losses. As defined in the California Waiver of Bond Form DE-142, “a bond is a form of insurance to replace assets that may be mismanaged or stolen by the executor or administator. The cost of the bond is paid from the assets of the estate.”
Whether a Bond is Required Is Specified in a Will
Generally speaking, a will in California will specify four things:
- Who the executor should be;
- Who gets what, and how much;
- Nomination of guardians of minor children; and
- Whether a bond is required to serve as executor.
When reviewing a will of someone who recently passed, look through to see if it specified whether a bond is required. It is possible to waive the bond if all the beneficiaries agree.
Cost of a Probate Bond in California
The cost depends on the estate’s total value, including real estate. Typically, the bond purchaser pays 0.5 to 0.8 percent of the estate’s value. For example, a $20,000 estate might have a bond cost of $100 to $150, while a $2 million estate could cost over $10,000. Comparing premiums from different surety companies is advisable.
Calculating a Probate Bond in California
Per California Probate Code §8482, the bond amount is based on:
- The estimated value of the estate’s personal property
- The estimated gross annual income of the estate
- The estimated value of any real property in the estate
Obtaining a Probate Bond in California
To secure a probate bond:
- Confirm the need for a bond when nominated for a fiduciary role.
- File a petition to open probate at the local court after the individual’s passing, including the death certificate and Will, if available.
- The court orders the bond and specifies the coverage amount.
- Apply for the bond with a surety company, often involving a credit check, and provide proof of coverage to the court. Some companies offer same-day approvals.