Texas Court Bonds: Your Guide to Surety Bonds in Texas

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What Are Texas Court Bonds?

Texas court bonds are broadly categorized as appeal bonds or probate bonds.

Appeal Bonds

A losing defendant in a civil case may be required to purchase an appeal bond when filing an appeal challenging the court�s decision. There are several different types of appeal bonds, such as attachment bonds and replevin bonds, but they�re all intended to protect real property or funds awarded in a judgment that is under appeal. An appeal bond essentially �freezes� the situation until a decision is rendered by the appellate court, staying the execution of a judgment awarding damages to the plaintiff.

Appeal bonds typically are fully collateralized to ensure the eventual payment of damages or the return of seized property to the defendant in the same condition it was in before being seized.

Probate Bonds

Probate bonds may be court-ordered when a person is appointed to serve in a fiduciary capacity to manage assets belonging to someone else. The bonding requirement applies to the following:

• The executor of a deceased person�s estate (unless the will specifically states and/or all beneficiaries agree that no bond is required)
• The administrator appointed to manage the disposition of an estate when the decedent dies intestate (without leaving a will)
• The conservator named to manage the assets and finances of a minor or of a person who has been found incapable of managing their own financial affairs
• The guardian appointed to make decisions about the welfare of a minor or person deemed to be incapacitated
• The trustee chosen to manage the assets of a company or individual during bankruptcy

Probate bonds guarantee that the bonded individual (known as the �principal�) will abide by all legal requirements in carrying out their fiduciary duties. They also guarantee that funds will be available to compensate anyone suffering a financial loss due to the principal�s unlawful or unethical actions.

Understanding Texas Surety Bonds: Your Comprehensive Guide

You�ll be notified by the relevant court of any appeal bond or probate bond you may be required to obtain in order to file an appeal or serve in any of the fiduciary roles described above.

How Do They Work?

When you purchase a court bond, the surety bond company (the �surety� for short) establishes a line of credit that can be accessed to pay claims up to the required bond amount. Appeal bonds typically must be fully collateralized since most appeals are unsuccessful. In such cases, the surety will use the collateral to pay a valid claim against the bond.

If a bond is not collateralized or the collateral is insufficient to pay a claim plus any additional court costs or fees, the surety will use the principal�s line of credit to make the payment on behalf of the principal, creating a debt that the principal is legally obligated to repay to the surety.

What Do They Cost?

The cost of a Texas court bond is calculated as a small percentage of the required bond amount. If a bond is fully collateralized, there is little risk to the surety, so the cost is very low. For uncollateralized bonds, the surety sets a premium rate based largely on the principal�s personal credit score. The higher the principal�s credit score, the lower the court bond premium rate.

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