Bonds By Category

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:

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:

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.