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California probate bonds, also known as fiduciary bonds, are surety bonds that California probate courts require from people being appointed to serve in a fiduciary role. A fiduciary is a person authorized by a probate court to manage another person�s assets and make decisions on behalf of that person.
Being entrusted with fiduciary responsibilities is a serious matter. By ordering fiduciaries to purchase a probate bond, the court is ensuring that those responsibilities are carried out in accordance with all applicable laws and ethical standards.
A probate bond is a fiduciary�s guarantee to act in a completely lawful and ethical manner in exercising control over the assets he or she was appointed to manage. The bond ensures that funds will be available to compensate any party who suffers a financial loss as a result of the fiduciary�s noncompliance with the terms of that guarantee.
Any California probate judge can require a probate bond to be purchased by someone named as executor or administrator of a deceased person�s estate, guardian of a minor, conservator of an incapacitated adult, or trustee. In each case, the probate bond provides protection for specific individuals.
For example, a probate bond purchased by an executor protects the interests of beneficiaries by ensuring that assets are distributed in accordance with the deceased�s will, or, in the absence of a will, in accordance with California law. A probate bond purchased by a guardian or conservator provides protection against the misappropriation of assets under that individual�s control.
There are three parties to a California probate surety bond agreement:
If the fiduciary violates the terms of the surety bond agreement, the injured party (or the probate court acting on behalf of the injured party) can file a claim against the probate bond and be compensated for a financial loss resulting from that violation.
The surety may attempt to negotiate a settlement, but if no agreement is reached, the surety will pay the claim and then seek reimbursement from the principal. This advance payment prevents potential delays in compensating the claimant and gives the principal some time to gather the funds to cover the claim amount, which sometimes requires the principal to liquidate personal assets.
The cost of a probate bond is a small percentage of the value of the assets under the fiduciary�s management and control, including the value of any real estate. You�ll need to provide the surety with court papers documenting those assets. The surety will set the premium rate that will be applied to the total asset value based on the fiduciary�s personal credit score and financial stability.
Request a convenient online quote today, or call to speak with one of our surety bond professionals about the California probate bond you need.
