Probate Bonds/Fiduciary Bonds

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Probate Bond Guide: Cost & Requirements

A probate bond is a type of surety bond required when a probate court judge appoints an individual to manage the affairs of another. Probate bonds require that the appointee follow the law and act in the best interests of whomever they’re supporting. 

Whether you’re an appointed conservator, administrator, or guardian, probate bonds can be a little confusing. Keep reading to learn how they work and how you can get one.

In this probate bond guide, we’ll cover:

• Definition and Example
• How It Works
• How Much It Costs
• Types of Probate Bonds
• Requirements 
• Where to Find & How to Apply
• Frequently Asked Questions
• Probate Bond Definition and Example

A probate court typically requires a probate bond to ensure that an appointed individual acts ethically when managing another’s welfare. Common arrangements requiring this bond include conservatorships, guardianships, and executorships. In all these scenarios, the individual is given the power to make financial or medical decisions on behalf of a person who is incapacitated, a minor, or deceased.

With probate bonds, there are three parties involved in this legally binding contract:

• Principal: The individual that must obtain the bond (you)
  
• Obligee: The party requiring the bond (probate court judge)
• Surety: The company that issues the bond, ensuring the court that you comply with the law

What is an example of a probate bond?

Let’s use a conservatorship as an example. Rachael is elderly and struggles with managing her financial affairs. The court appoints Joe, her son, as conservator and gives him the legal authority to manage Rachael’s assets, including her finances and real estate properties. 

Before Joe can become the conservator, he must obtain a conservatorship bond — this type of probate bond requires Joe to always consider his mother’s best interests when making financial decisions.

How Does a Probate Bond Work?

When the court assigns you to oversee another’s affairs, you’re given a lot of power. Depending on the arrangement, you’re responsible for managing assets, distributing belongings, handling finances, and making medical decisions. However, some people take advantage of this power. 

Here’s where the probate bond comes in.

A probate bond protects beneficiaries from unlawful acts committed against them. If you’re found embezzling, committing fraud, or doing some other illegal activity, then a claim can be filed against the bond for reimbursement.

If you're in a situation where you require a probate bond — such as conservatorship or guardianship — you’ll need to obtain the right type of bond. When researching different bonds, you’ll also need to consider the capacity, premium, and term.

Bonding capacity: The highest amount that can be rewarded when a claim is filed against the bond. The amount is set by the judge.

Premium: The cost of purchasing the bond — typically a percentage of the bond amount.

Term: How long the surety bond is active. The term can vary by the bond type.

What happens when a claim is filed against the probate bond?

Hypothetical scenario: You’re appointed guardian to your niece after her parents died. 

When she turned 18, she discovered that you stole $50,000 from her inheritance and filed a claim against the guardianship bond. After confirming the claim is valid, the surety reimburses your niece for the stolen amount.

However, you’re still on the hook financially. Your niece was reimbursed in full, but you are now responsible for repaying $50,000 to the surety.

What Is the Cost of a Probate Bond?

The premium on a probate bond typically ranges from .05% to 10% of the bond amount. The amount is set by the judge, who considers the value of the assets under management.

For example, let’s say the judge sets the bond amount at $100,000 because an appraisal showed that’s how much the assets are worth. The premium could cost $500 to $10,000 based on a .05% to 10% premium.

With many probate bonds, the premium is a one-time fee paid upfront. For bonds with longer terms, like a guardianship bond that lasts until the ward turns 18, you may need to pay a premium annually.

Types of Probate Bonds

Probate bonds are a larger umbrella that houses several types of court bonds. Some common types include:

• Administration bond: Required when you’re appointed to oversee a deceased individual’s estate.
• Conservatorship bond: Required when you’re appointed conservator and become responsible for managing another’s financial affairs.
• Guardianship bond: Required when you’re appointed guardian to a minor or incapacitated individual — typically responsible for medical decisions and meeting the ward’s day-to-day needs.

Requirements for a Probate Bond 

Though needed in most probate court arrangements, the judge ultimately determines whether a probate bond is needed. Keep in mind that requirements can vary by state and each county can have its own required forms. For example, you’d need to submit a certain form for the court in Palm Springs, California, and a different form for the court in Montgomery County, Ohio.

What happens if there is no probate bond?

In most cases involving a will, a probate bond will be involved. Even if a will does not specify the bond, the judge may still require it.

In some cases, a will may include a probate bond waiver, a clause that dismisses the surety bond requirement.  This is usually added when the individual fully trusts the executor or administrator of their will. However, keep in mind that the court can still override a waiver of a probate bond.

How to Get a Probate Bond

Obtaining a bond for probate court can be an extensive process depending on the bond type. First, you’ll need to petition the court to become the conservator, guardian, or another type of fiduciary. If there is a will, you’ll need to supply it to the court, and the judge may require all assets to be appraised before declaring the required bond amount. After the judge declares an amount, you can shop around for the required probate bond.

Applying for a Probate bond

Obtaining a probate bond is easy when applying with Worldwide Insurance, Inc. Just complete our initial application form and get an instant quote in minutes. With rates starting as low as .05%, we issue all types of surety bonds in all 50 states. No credit check required and no obligation.

Probate Bond FAQs

What is a probate bond?

A probate bond is an umbrella term for the several types of surety bonds used in probate court. Probate bonds are required to ensure you act lawfully when appointed to oversee the affairs of another — often somebody who is a minor, incapacitated, or deceased. 

Why is a surety bond needed for probate?

A surety bond is necessary for protecting an individual — usually a minor or incapacitated person — who is unable to care for their own well-being. When the court assigns an individual to oversee their assets and health, a probate bond is required to ensure they act ethically and in the best interests of whomever they’re supporting.

When is a probate bond required?

The judge determines whether a probate bond is necessary. These bonds are typically required when you’re legally responsible for overseeing the affairs of somebody who is a minor, incapacitated, or deceased. 

Who pays for a probate bond?

The appointed individual typically pays for the bond upfront but is often reimbursed through the beneficiary’s assets. 

How long does it take to get a probate bond?

Administrator probate bonds up to $150,000 are instant issue, no credit check required when obtained through Worldwide Insurance, Inc. Other types of bonds, like guardianship and conservator bonds, will require additional documentation before approval.

How long does a probate bond last?

It depends on the type of probate bond. Administrator bonds may have terms of one year. Guardianship bonds can last until the ward turns 18 years old and conservatorship bonds are typically in effect until the conservatee dies.

Can I get a probate bond with bad credit?

Yes, Worldwide Insurance, Inc. works with thousands of contractors — even those with low credit — to help them meet their bonding requirements. If you need a probate bond but have bad credit, we’ll work with you.

What Does Fiduciary mean? 

The word “fiduciary” refers to person or legal entities such as administrators, guardians and trustees who are appointed by the court to take control of property, manage it and transfer or distribute it as required by law.  These Surety Bonds can be required by the Probate Court, that’s why people refer to these different bonds as probate bonds. Probate bonds are a three-part agreement. The Principal, the Surety Company and the Obligee.  The Principal is the business or individual applying for the Surety Bond. The Obligee is the individual or entity requiring the Probate Bond and the Surety Company is the company who underwrites and provides the Surety Bond coverage. Unlike Insurance if a claim arises and The Surety Company Pays out on a claim, the Principal must reimburse the Surety for the Loss.  

VA Bonds

Typically the probate courts require fiduciary bonds, but this is not the case for Veterans with benefits. When a Veteran is no longer capable of taking care of him or herself The Department of Veterans Affairs will appoint a fiduciary to help manage their benefits. This bond is referred to as a VA Bond or Veteran Affairs bond. This bond is underwritten and treated just like a guardianship bond.

What type of surety bond do I need?

Visit our list of bonds by state to get a closer idea of your bonding requirements. To learn more about surety bonds in general, check out our free surety bond guide.

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