Probate Bonds. When would I need one?

Losing a loved one can be a trying time for any family, but not having a will in place can make the situation even more difficult.  If there is no will in place then the court will appoint an “Administrator”, and the court will always require the Administrator to be bonded.   If there is a will in place, then the “Executor” may not be required to be bonded, depending on the size of the estate.  Probate bonds are issued to keep the newly appointed “Administrator” &/or “Executor” of the will accountable.  If there are any debts to creditors, the bond is a financial guarantee that protects the creditors, as well as any heirs to the estate.  The value of the bond is the value of the estate, which can be life insurance proceeds, a bank account, a house, car, boat or any property owned by the deceased.     

The probate bond protects against the unfortunate instances where the “Administrator” or “Executor” does not honor the wishes of the deceased.  The probate bond protects against this by guaranteeing that the creditors are paid and the remaining estate is distributed appropriately amongst the heirs.  These bonds also expedite the process quite a bit because a probate bond is similar to an insurance policy taken out by the “Administrator”.  He must pay for it and the sooner they complete the process the sooner they can stop paying the premiums.  Even though they are similar to insurance, they are not insurance.  An insurance policy is a two party agreement between you and the insurance company, while a bond is a three party agreement, with the third party called the “Obligee”.  It is the “Obligee” who is requiring the bond and in the case of a Probate Bond, the “Obligee” will be the Surrogate Court of the decedent’s home county.   

A probate attorney is absolutely necessary in obtaining one of these probate bonds, but they are not the source of them.  These bonds are obtained from an insurance agency.  Having a probate lawyer who uses a local agency with good rates is absolutely necessary.  Using an insurance agency with ties to several different insurance companies that can provide a bond allows them to offer competitive rates within the market.  

Contact the Lubowicki Insurance Agency for more information!