What is a Probate Bond?

Probate bonds are a subset of the broader court bond category that must be filed with the probate court responsible for settling estates in the jurisdiction where the estate assets or beneficiary of those assets resides. Probate bonds, also referred to as “fiduciary bonds”, are required by the probate court as a condition of appointment for the fiduciary responsible for managing the estate. A fiduciary is defined as a person to whom property or power is entrusted for the benefit of another. Probate bonds can be classified in the following categories based on the role of the fiduciary:

  • Administrator Bonds - Fiduciary appointed by a probate court to handle the affairs of a person who has passed away.
  • Executor Bonds - Fiduciary designated by an individual through a will to handle his or her affairs after death.
  • Guardianship Bonds - Fiduciary appointed by a probate court to administer the estate of a ward. A ward is defined as a minor OR a person who has been declared legally incompetent. Guardians may also have authority to make health related decisions for the ward.
  • Conservatorship Bonds - Fiduciary appointed by a probate court to administer the estate of a ward. Conservators’ responsibilities are generally limited to the financial affairs of the estate.

Probate bonds must be issued by insurance carriers admitted in the state where the court requiring the bond resides. The insurance carrier issuing any surety bond, such as a probate bond, will also be referred to as the “surety company” or the “bond company”. 

Why is a Probate Bond Required?

Probate bonds protect the probate court by transferring to a surety bond company the cost of ensuring the beneficiary of an estate is compensated for damages resulting from the fiduciary failing to perform the duties of his/her appointment. The surety company provides the probate court a guarantee (the surety bond) that the beneficiary of an estate will receive payment for financial damages due to a violation of the statutes and regulations pertaining to fiduciary duties up to a limit specified in the bond (“penal sum” or “bond amount”). Ultimately, fiduciaries are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond.  Probate bonds refer to the court appointed fiduciary as the Principal, the surety bond company as the Obligor and the court requiring the bond as the Obligee.

Probate bond violations triggering a bond payout may include a fiduciary misappropriating estate assets, failing to keep accurate accounting records, or acting in a manner that disregards the best interests of the beneficiary.

How much does a Probate Bond Cost?

Probate bond rates vary from state to state, but typically cost .75% of the bond amount with a $100 minimum premium. 

Is a credit check required for probate bonds?

Credit checks are typically required for probate bonds for larger estates or guardianship  bonds that will need to be in force for long periods of time. 

Estates with the following circumstances may find it difficult to secure a surety bond:

  • Bond is required on demand of an interested party (not including the probate court), i.e. a creditor of the estate.
  • Heirs are disputing the distribution of the estate
  • Prior fiduciary is being replaced
  • Fiduciary is indebted to the estate.
  • Estate assets contain a going business.

What is the Uniform Probate Code?

Due to the wide variation of probate law among the states and escalating cost and time needed to distribute assets, the National Conference of Commissioners on Uniform State Laws (NCCUSL) created a means to streamline administrative requirements. The Uniform Probate Code (“UPC”) is a body of legislation that reduces the costs of estate administration, in part by eliminating the surety bond requirement for most states. To date, roughly a third of the states have adopted the UPC filing.

UPC Adoption by State

State UPC Adopted? UPC Citation Non-UPC Citation Adoption Date

Alabama

No

AL § 43-8-1

1982

Alaska

Yes

A.S. § 13.06 - A.S. § 13.36

1972

Arizona

Yes

A.R.S. § 14-1102

1/1/1974

Arkansas

No

A.C.A. § 28-1-101 et seq.

Select Title 28

7/27/2011

California

No

West’s ANN, CAL. PROB. CODE § 1 et seq

07/1/1991

Colorado

Yes

C.R.S.A §§ 15-10-101 to 15-17-103

05/2013

Connecticut

No

C.G.S.A § 45a-1

1991

Delaware

No

12 DEL. C. §§ 101-61.605

1997

District of Columbia

No

D.C. ST § 20-101 et seq.

04/09/1997

Florida

No

West’s F.S.A. §§ 731.005-735.302

1/01/2002

Georgia

No

GA. Code Ann. §§ 53-5-1 to 53-5-7

1996

Hawaii

Yes

HRS § 561:1-101

1996

Idaho

Yes

I.C. § 15-1-101 et seq

1971

Illinois

No

755 ILCS § 5/1-1 et seq

1/1/1976

Indiana

No

I.C. §§ 29-1-1-1 to 29-1-20-1

7/1/1997

Iowa

No

I.C.A §§ 633.1 to 633.722

1963

Kansas

No

K.S.A §§ 59-101 to 59-3513

7/1/1939

Kentucky

No

K.R.S. §§ 391.010 to 397.109

6/21/1974

Louisiana

No

L.S.A §§ 9:2421 to 9:2425

1915

Maine

Yes

18-A M.R.S.A §§ 1-101 to 8-401

1/1/1989

Maryland

No

MD Code Ann Est & Trusts §§ 1-101 to 12-103

7/1/1974

Massachusetts

Yes

M.G.L.A 190B §§ 1-101 to 3-1204

3/12/2012

Michigan

Yes

M.C.L.A §§ 700.1101 to 700.8206

04/1/2000

Minnesota

YES

M.S.A. §§ 524.1-100 to 524.1-404

8/01/2008

Mississippi

No

Miss Code Ann §§ 91-1-1 to 91-1-31, 91-5-1 to 91-5-35, 9-7-1 to 9-7-331

Various

Missouri

No

V.A.M.S §§ 472, 473, 474

Various

Montana

Yes

M.C.A §§ 72-1-101 to 72-5-638 & § 72-16-601 to 71-16-612

1974

Nebraska

No

Neb Rev Stat §§ 30-2201 to 30-2902, 30-3901 to 30-3923 and 30-4001 to 30-4045

1974

Nevada

No

NRS Title 12 Chapters 132-151

1941, Amended 1999

New Hampshire

No

NH Rev. Stat. T. LVU “Probate Courts and Decedents’ Estates,” Chapters 547 to 567-A

Various

New Jersey

YES

N.J.S.A §§ 3b:1-3b:28

5/1/1982, amended 1/12/2006

New Mexico

Yes

N.M.S.A 1978 § 45

1978, amended 1990

New York

No

NY Est. Powers & Trusts Law §§ 17-B, Art.1 to 17-B, Art. 13 (McKinney)

1966, various

North Carolina

No

N.C.G.S § 28A-1-1 to § 31-52

1/1/2006

North Dakota

Yes

N.D.C.C §§ 30.1-01-01 to 30.1-35-01

7/1/1975

Ohio

No

OH ST. T XXI Chs. 2101 to 2123

1975

Oklahoma

No

58 OKL St Ann § 1 to

1258

11/1/2001

Oregon

No

O.R.S.T 12, Ch. 111 to Ch. 117

1969

Pennsylvania

No

20 PA C.S.A §§ 3131 to 3138

11/6/2006

Rhode Island

No

R.I. Gen Laws 1956. T. 33 Ch. 1 to Ch. 27

1957

South Carolina

Yes

SC Code 1976, §§ 62-7-101 to 62-7-1106

1976

South Dakota

Yes

SDCL § 29A-1-101 to 29A-6-311

1995

Tennessee

No

TCA Titles 30 (Administration of Estates), 31 (Descent and Distribution) & 32 (Wills)

Various

Texas

No

TX Est § 360.001, et seo

1/1/2014

Utah

Yes

UCA 1953 § 75-5-101 to 75-8-101

7/1/1977

Vermont

No

14 VSA § 1 to § 204

1975

Virginia

No

VA Code Ann §§ 64.2-100 to 64.2-2704

10/1/2012

Washington

No

Wash Rev Code Ann §§ 11.02.001 to 11.95.900

1/1/1985, recodified under different sections, effective 1/1/2012

West Virginia

No

W VA Code §§ 44-1-10 to 14-16-6

Various

Wisconsin

No

WIS Stat Ann §§ 851 to 882

Various

Wyoming

No

WS 1977 §§ 2-1-101 to 2-18-106

1977


How does the wording in the bond form impact the cost of a probate bond?

The bond form is a tri-party agreement which defines the rights and obligations of the court (obligee), surety company (obligor) and fiduciary (principal). While many bond forms use similar language, each bond form can be customized by the court requiring the specific bond and may contain provisions that increase potential costs for the surety company, which will ultimately be passed on to the fiduciary via higher bond premiums, stricter underwriting or collateral. The primary text to consider in a probate bond surrounds (1) aggregate limits, (2) cancellation provisions and (3) forfeiture clauses.

Aggregate Limits Bond forms always specify the penal sum defined as the maximum amount of financial damages any single party can recover from the bond related to a single claim occurrence. Most bond forms also contain a clause which limits the amount of financial damages from all parties and all claims to a specific amount (“aggregate limit”), usually the same amount as the penal sum. For example, a $15,000 administrator bond with an aggregate limit of $15,000 will pay out no more than $15,000, regardless of the number of damaged parties or claim occurrences. Probate bonds without an aggregate limit will be more expensive than a bond with similar coverage containing an aggregate limit.

Cancellation Provisions
Most bonds contain a provision allowing for the surety company to cancel the bond (“Cancellation Provision”).Cancellation provisions allow the surety company to cancel the bond for any reason, but most often due to the applicant failing to pay premiums due, claim payouts, or material changes in the applicant’s credit score. Probate bonds are non-cancellable and require a release from the requiring court in order for the estate to be closed with the surety company issuing the bond. Guardianship bonds can have especially long terms as the bond is required to be in force until the minor reaches the age of majority (18 in most states) or until the ward passes away. 

Forfeiture Clause
Surety bond claims are paid by surety companies to damaged parties to reimburse that party for the financial loss incurred up to the bond penalty amount. Certain bonds contain a clause which requires the surety company to pay the full bond penalty to the damaged party, regardless of the actual damages incurred (“Forfeiture Clause”). Probate bonds with forfeiture clauses will be more expensive than a bond with similar coverage that does not contain the clause.