What is an Estate Bond?
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What is an Estate Bond?
An estate bond is a monetary amount rendered in order to ensure that estate proceedings are processed both legally as well as honestly. Some states require the executor of an estate to post an estate bond when the estate holder dies, as part of the distribution process.
The estate bond may be mentioned in the person’s will; in fact, including considerations for estate bonds is an essential part of estate planning. Estate bonds are usually purchased as a surety bond from an agency that deals specifically with those types of monetary transactions. The executor or representative of the estate may need to submit an application for the bond amount, and can sometimes be subjected to a credit check.
Estate bonds are also called “executor bonds”, “fiduciary bonds”, or “probate bonds”.
Is an Estate Bond Always Required?
Including an estate bond is not always automatically required. You may wish to check with a lawyer to determine if estate bonds are required in your particular state or local jurisdiction. In some states, the probate court will require the estate administrator to secure a probate bond, especially for larger estates.
Also, an estate holder may specifically request for a bond to be involved in the distribution process for their assets upon their death. A bond will often help ensure the legitimacy of the process, and can provide peace of mind for the beneficiaries. In that case, the executor needs to ensure that the requests regarding the bond amounts are included as part of the process.
On the other hand, the estate holder may specifically state that they do not wish the executor to obtain an estate bond, as they can sometimes be costly, and can take a while to obtain. On the whole, estate bonds help to prevent instances of fraud, coercion, and embezzlement in connection with estate assets.
What if an Estate Bond Isn’t Posted?
If an estate bond is required, but isn’t posted correctly, it can delay the entire process for distributing the assets. Beneficiaries may not receive the distributions that they’re entitled to at the desired time. This can complicate the matter and open up the proceeding to various legal issues such as a will challenge.
Thus, it is highly recommended to follow estate bond requirements if these are considered in your area.
Do I Need a Lawyer for Help With an Estate Bond?
Estate bonds are an important aspect of estate planning. It may be in your best interests to consult with a qualified estates lawyer if you need legal advice regarding an estate bond. Your lawyer can inform you of the estate laws in your area, and can help make sure that you’re following all of the legal requirements for a valid estate plan. Also, if you encounter any difficulties or legal issues with your estate assets, your lawyer can represent you in court during a formal civil lawsuit.
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Last Modified: 01-04-2013 02:46 PM PST
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